Warren Buffett Way : Manage a portfolio of Businesses

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Warren Buffett believes that diversification in investing is required when investor does not know what it is doing. Investors can measure the economic progress of the business by multiplying the earnings per share by number of share you hold. Maintain a portfolio of companies that in ten years, will produce highest look through earnings calculated as explained above. If you hold portfolio of about ten businesse you would not sell your best businesses, this is similar to working of a CEO who during crucial times sell less performing stocks while keeping best performing companies with him. Avoid purchasing marginal businesses if you have cash reserve. if a company doesnot fit completely or pass after following these four steps then you should not purchase the stock. Just restrict yourself in making few smart investments rather then going and making hundreds of risky investments. HAPPY INVESTMENT!!

Step 1 : Turn off stock market
Step 2 : Don't worry about the economy
Step 3 : Buy a business, not a stock
Step 4 : manage a portfolio of businesses