Most people know how Warren Buffett invests his money, yet they are not as rich as he is. Why is this?

A more appropriate answer would be patience, research and dedication is the key. Warren Buffett, popularly known as ‘the Oracle of Omaha’, is one among the top famous investor in this world. He started his investment journey with just US$100 when he was just 11. He among the top 10 richest people on this planet with an estimated wealth of $ 84 billion. He manages his wealth as well as of his client through a company called Berkshire Hathaway where he is the CEO and biggest shareholder. Warren Buffett is the disciple of Benjamin Graham and has learned a lot.

Warren Buffett's investment philosophy is based on a simple approach with common sense but does not mean they are always easy to follow. He never cared about the prices of the stocks and always looked for underpriced stocks. He has his conceptual model to select a stock or business where he evaluates how much a stock should be worth. He is not a firm believer in the demand and supply concept and assumes that the market will correct and find true value or real value of the undervalued quality stocks will in the end. He only invests in the quality businesses, which he understands and invests for a long time because he understands the power of exponential growth or power of compounding. Even during the 2008 crisis when everyone was panicked and the market was in chaos, he never made a second thought to sell those selling his investments. He later explained this in a statement, “Why would I have sold my stocks that were small participation in wonderful businesses? He believes that money can never grow until it is reinvested.

Besides, He liked to remain invested instead of spending and thus how he multiplied his income. For a compound factor to work, this is a critical part. He investigates thoroughly and likes to read the company s annual reports when he invests in a business. He looks at how the organization has evolved and what its MOAT. Once he makes purchases a company or shares in a company, he is not going to sell. He understands what he wants to do, and what he does is extremely well.

The letters from Warren to shareholders in the annual reports of Berkshire Hathaway are among the best company literature and is a bible for many investors.

Some of his famous investment philosophy is the following:

The company’s fundamentals always look for businesses that have relevance, not just today, but in the future also like 10–20 years later. Tech companies are unpredictable hence do not fall under this criterion. 

 Undervalued companies. If a particular company has good fundamentals but the price does not reflect its real value, Warren Buffett does not hesitate to buy and keep the stock.

Index Fund Invest in an Index fund, as they mirror the performance of one of the financial market indices. 

Business Model- Warren Buffett's golden rule is that in those companies you can recognize and relate you should invest. Buffett has always invested in businesses and sectors in which he believes. Stick to what you know when economic conditions are unpredictable. 

Long term plans when making investments always look at long-term plans.Buffett's says it “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years."

Investment in yourself- An investment in yourself is the best investment. Always make a habit of learning and be ready to spend time on your personal development regardless of your age and position. 

Learn from mistakes make sure that you learn from your mistakes and keep a record of the mistakes you have made so that you do not repeat the mistake.

Over-diversification is not good- hold between 5 and 10 stocks at a time, this helps to maximize returns while minimizing your risk. You will lose your focus tend to lose capital in the long term 

Stay away from debt- Buffett does not like using credit cards. He simply says it just does not make sense. At those rates, you will end your entire life borrowing money and be better off. He has also warned not to invest using borrowed money.

Value investing is not for everyone and may not suit everyone’s investment style. He has his developed method of choosing a business or a stock. It is difficult to find high-quality stocks, which are undervalued. Every company has a different business model, sectors, economy, etc. in a real market sense, where globalization is at its peak for instance Markets seem to be efficient, and information moves quickly. Many factors work and it does not guarantee a successful investing and it has multiple explanations for it and healthy long-term records of accomplishment. A broader view is required while making investment decisions. Not everyone believes that the market is overvalued. Value stocks trade at a lower price, but not all bargain stocks generate good value in the future. Value investing is a long approach of searching companies, investigating a company’s fundamentals so that when the opportunity arises you can grab those opportunities hence patience is required. It is a controversial theory as Charlie Munger pointed out, all investing is value investing. Thus, it makes an investor's job hard to identify.