Warren Buffet: If you Don’t Understand it, Don’t Invest in it

Well, the above video is about, Warren Buffet – The Legendary Investor, also known as The Oracle of Omaha.

In the Video Buffet says that, you buy Businesses (Shares) to sell. If you don’t like the Investment, you just sell that Investment few years Later but we buy Businesses to keep. And that’s why I don’t invest in the Businesses those I don’t Understand.

According to the Warren Buffet, He doesn’t understand the Business Models of Google And Microsoft and that’s why he has never invested his money in the Technology Sector. Warren Buffet only invests in those Business whose next 10-20 years of future he can see.

This Sounds simple -- if you don't understand it, you don't invest. But look at Microsoft run by his close friend Bill Gates. He could have made billions off Microsoft, and he didn't do it, because he couldn't see the future of technology 10 years from now. That takes great discipline.

This is really a great piece of Investment advise. And this simple Investment advise can save you from making dangerous Investments and loosing lots of money. Because of Warren’s this basic instinct, he has never invested in the Technology sector even during the late 90s Technology Bubble. And thus, he had never lost money in the 2000 IT Bubble burst.

Of course, Some Investment Experts argue that, Buffet has lost a great Investment Opportunities also. But well, according to the Buffet, He doesn’t invest in the Business that he couldn’t understand. This is as simple.