Warren Buffett: Do the Research
Warren Buffett is widely considered to be the most successful investor in history. Not only is he one of the richest men in the world, but he also has had the financial ear of numerous presidents and world leaders. When Buffett talks, world markets move based on his words.
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." —Warren Buffett3
Buffett is also known as being a prolific teacher. His annual letter to investors in his company, Berkshire Hathaway, is used in college finance classes in the largest and most prestigious universities.
Buffett gives two key pieces of advice when evaluating a company: First, look at the quality of the company, then at the price. Looking at the quality of a company requires that you read financial statements, listen to conference calls, and vet management. Then, only after you have confidence in the quality of the company, should the price be evaluated.
If a company isn't a quality company, don't buy it just because the price is low. Bargain-bin companies often produce bargain-bin results.
