Stock Investment is like Real Estate Investment

Warren Buffett has written concepts of investing in real estate, which were adapted from the principle of “buying good businesses in suitable prices”, where he uses throughout his whole life to invest in companies. Please see his articles below:

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Warren Buffett has written concepts of investing in real estate, which were adapted from the principle of “buying good businesses in suitable prices”, where he uses throughout his whole life to invest in companies. Please see his articles below:

From here, what is would like to further emphasize are:

Those who understand the concept of Passive Income will understand Buffet’s investment concepts very well. For those of you who are still not quite sure, I encourage you to read Rich Dad, Poor Dad for a better understanding.

When you are investing, try to buy assets based on the cash flow (or something similar to cash flow) that the asset can generate, not on the capital gain you may make through selling at a higher price in the future.

Great assets should increase in value with time, and it’s cash flow (or something similar to cash flow) should also increase respectively in a rate greater than the inflation rate.

In all your investments, try to choose assets that at least break even within ten years, and can generate Passive Income for the rest of your life. If we can repeat this, our wealth will constantly increase in e future.

Remember that a 100% profit that is quickly gained is actually a lot less than the Passive Income you can gain for the rest of your life. Therefore, if you have the chance to invest in a great asset that generates a an increasing Passive Income greater than the inflation rate every year, try to hold onto it. You can then collect the Passive Income to buy more great assets.

In relation to Jitta, this excerpt helps reinforce users’ confidence in Jitta because if you have studied our concept at http://library.jitta.com/en/basic you will find that:

The Jitta Score is used to measure the quality of the company, helping us evaluate its capability in increasing its cash flow every year.

The Jitta Line is calculated from the concept that if we were to invest in all the companies, which price would allow us to break even within 10 years.

Therefore, investing in companies with a high Jitta Score in a price level that does not exceed the Jitta Line, will ensure that we are investing in a quality asset with a suitable price, and will break even for us within ten years, plus will also generate Passive Income that increases with the inflation rate as a bonus.

In addition, we don’t even have to do anything after investing, giving us the extra time to find other investment prospects, or pursue other interests in life without worrying too much about our investments, all of which align with Buffet’s investment principles in both stocks and real estate.

Author: Jitta

Jitta simplifies financial analysis for value investors and financial advisors alike. Our stock-analysis platform offers actionable advice to help them make better investment decisions and generate higher returns based on a simple principle: “Buy a wonderful company at a fair price.” And we do that by creating Jitta Ranking, our proprietary algorithm that ranks stocks based on their profit potential. Returns generated by Jitta Ranking since 2009 has outpaced that produced by the S&P500 index by a large margin. Jitta’s technology processes information like a human mind, assessing complicated data and digesting it into an easy-to-use and intuitive format. Its key features include Jitta Score, an indicator of a wonderful company; Jitta Line, an indicator of a company's fair price; financial statements-made-simple Jitta FactSheet; Jitta Playlist, an intelligent screener and backtest system in one; and Jitta Portfolio, a smarter investment-tracking mechanism.

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