Warren Buffett's Berkshire Hathaway bought 75 million more Apple shares in the first quarter of 2018. Nicholas KAMM / AFP
Warren Buffett's Berkshire Hathaway bought 75 million more Apple shares in the first quarter of 2018. Nicholas KAMM / AFP

Get rich and retire early by investing like Warren Buffett



Every investor dreams of being the next Warren Buffett, the self-made US billionaire who bought his first stock age 11 and is now worth more than $93.4 billion, according to Bloomberg.

Mr Buffett is the most famous investor in the world and the third-richest person on the planet, but he is admired for more than his money.

The so-called “Oracle of Omaha” is renowned for his folksy words of wisdom, which have made him a cult figure to many. The 87-year-old is also a generous philanthropist, giving away more than $27bn in the past decade.

His investment vehicle Berkshire Hathaway has grown at an annual rate of just over 20 per cent since 1964, more than double the average annual return of 9.7 per cent on the S&P 500 index of top US stocks.

If you had invested $10,000 in the company in 1964 you would now be worth more than $240 million, multimedia financial-services company The Motley Fool calculates.

Mr Buffett may have started young but don't despair, he made 99 per cent of his wealth after his 50th birthday. The following 10 gems could help make you richer, and potentially save you a lot of money as well.

1 Rule No 1: never lose money. Rule No 2: never forget rule No 1

Steven Downey, a chartered financial analyst candidate at Holborn Assets in Dubai, says this is key to Mr Buffett’s down-to-earth approach. “Everyone dreams of doubling their money overnight but most successful investors built their wealth over a long time through shrewd investing and minimising large losses.”

Early losses can easily derail your long-term plans, Mr Downey says. “Losing, say, Dh10,000 hurts far more than earning Dh10,000 feels good, and this can make it hard to stick to your investment plan.”

Big losses are also hard to recover. “If your portfolio falls 50 per cent, you have to generate a 100 per cent return simply to get back where you were. If you lose 80 per cent, that rises to 400 per cent.”

You cannot do much about a stock market crash aside from be patient and wait for share prices to recover, but you can avoid taking undue risks, say, by going all in on one company or cryptocurrency, Mr Downey says. “Invest for the long term, stay diversified, manage risk and do not get greedy.”

And never forget it.

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2 If you buy things you don’t need, you will soon sell things you need

Mr Buffett is renowned for his modest and frugal living. Despite his vast wealth, he still lives in the same five-bedroom home he bought in Omaha, Nebraska in 1956, for $31,500. 

Mr Downey says there is a lesson here for UAE expatriates, who can get carried away with their tax-free salaries. “It is easy to be seduced into a lavish and debt-laden lifestyle, as you go all out for that new Mercedes or Rolex watch. By all means enjoy yourself but also develop a budget, build a financial cushion in case something goes wrong and invest every month for your long-term future.”

If you live for today and slap the cost on a credit card, tomorrow could be tough.“You may get torn to pieces by the interest, and find yourself in deep debt and unbearable stress. That is not a winning strategy.”

3 Risk comes from not knowing what you're doing

Too many investors pick up a ragbag of stocks and funds that took their fancy at some time or another, without really knowing why.

Others fall prey to commission-hungry independent financial advisers who prey on expatriates, selling expensive and inflexible 25-year offshore investment bonds that swallow most of their money. Those are the type of mistakes you make when you don't know what you are doing.

Steve Cronin, the founder of non-profit UAE investment community Wise, says amateur investors should keep it simple by investing in an exchange traded funds (ETFs).

ETFs passively track a vast spread of global indices with rock bottom charges. Over the longer run they will beat three quarters of active fund managers, and you will hand over far less in fees.

Mr Cronin suggests starting with a global fund such as the Vanguard FTSE All-World UCITS ETF. “This gives you huge diversification with nearly 3,000 stocks across 47 countries, for an annual fee of just 0.25 per cent a year.”

Shares will always carry a degree of risk, but this way you know what you are doing.

Be fearful when others are greedy and greedy only when others are fearful

This is the most famous Buffett quote of all and with good reason, says Tuan Phan, a board member of Common Sense Personal Finance and Investing, a non-profit community of UAE investment enthusiasts. "Greed and fear are the two dominant investor emotions. If left unchecked, they tempt us to do things that may damage our long-term wealth."

Too many investors follow the herd, buying stocks when everybody else is buying, selling when everybody sells.

Mr Phan says a good example is the market crash during the financial crisis. “Those who panicked and sold banked massive losses while those greedily buying stocks at depressed prices can now look forward to an early retirement.”

Keep your emotions in check. Avoid getting over excited on the way up, or too panic-stricken on the way down.

5 Our favourite holding period is forever

There is a big difference between speculation and investing, Mr Phan says. “Investing involves buying an asset for a share of future profits, speculating involves buying an asset in hope of selling it for a higher price to someone else.”

Wealth is generated from compound growth and interest over time, rather than trying to time the market, he adds. “You want to be holding a productive asset such as a dividend stock for as long as you possibly can.”

Mr Phan says most ordinary investors lack the time, knowledge or skill to successfully pick individual stocks and shares as Mr Buffett does. “For them a globally diversified ETF is the best option. Buy and hold for years, preferably decades, reinvest your dividends, avoid panic selling if markets crash and finally, retire early.”

In investing, it is not necessary to do extraordinary things to get extraordinary results

Devesh Mamtani, the head of investments and advisory (financial markets) at Century Financial Brokers in Dubai, says investing should be as boring as watching paint dry, so avoid chasing the latest fad. “It isn’t easy, especially today, when you hear stories of speculators tripling their money on the latest cryptocurrency.”

Investing in a portfolio of low-cost ETFs may be boring but should prove far more rewarding in the longer run.

Buying a hot stock tip from a friend or colleague is exciting, until your money goes down the drain. “Whenever you get tempted ask yourself this: ‘Is your colleague smarter that Warren Buffett?’ That should give you the answer.”

7 Only when the tide goes out do you discover who's been swimming naked

There are times when making money from investing seems like the easiest thing in the world, for example, during the dot.com bubble of the late 1990s, or the property boom before the financial crisis.

Mr Mamtani says even poor quality assets can make money at these times. “It takes a downturn to distinguish between the good and the lucky.”

It is the same with your portfolio. “Almost anybody can make money in a bull market, it is only when the market turns that you see its true resilience.”

You need to ensure your investments are properly balanced, Mr Mamtani says. "Are you willing to live with lower returns to reduce volatility? Could you manage your debts if your income drops? These are the questions you should ask when the tide is still rising, afterwards it may be too late."

8 Beware the investment activity that produces applause, the great moves are usually greeted by yawns

Investors need to ignore everyday swings in stock markets and other assets, and the media hubbub surrounding them, says Gordon Robertson, the director of the Me Group of businesses in Dubai. “Also tune out financial advisers hyping the latest hot investment product or mutual fund. It is all short-term noise.”

Instead of buying the best performing asset class, such as shares, bonds, cash and property, Mr Robertson suggests buying them all in equal portions.

“Then once a year, reinvest the profits from your best performers into the weakest, to return your portfolio to its original balance. ETFs let you do this cheaply.”

Markets are cyclical, and last year’s winners often become this year’s losers, and vice versa.

Mr Robertson’s figures show that somebody who invested $100,000 in 1996 and repeatedly reinvested their gains in last year’s best performing asset would have just $229,183 after 20 years. “If they had rebalanced their portfolio by investing in the weakest they would have $376,000 instead.”

This approach may induce yawns at first, the applause comes much later.

9 Forecasts may tell you a great deal about the forecaster, they tell you nothing about the future

Nobody can predict the future, not even Mr Buffett.

Tom Anderson, a chartered wealth manager at Killik & Co, who has clients in Dubai, says Mr Buffett prefers “value investing”, which involves examining the intrinsic value of a company by poring over its financial documents and statements, rather than making a big calls on market movements.

Then he buys and holds, ideally forever. It is time in the market that counts, rather than timing the market.

That way you can forget what the forecasters are saying, and let the future take care of itself.

10 Remember that the stock market is a manic depressive

Mr Anderson says if anything, Mr Buffett is being kind, as the stock market is punishingly bi-polar. “It can demonstrate the depths of despair and unbounded optimism in a single trading session, driven by panic and greed.”

Mr Buffett likes companies that have delivered a positive return on equity for many years, have relatively low debt, strong profit margins, unique products and, ideally, shares temporarily trading at a discount. 

“This enables him to shield his investors from the mood swings of the wider market.”

Stock markets may be manic in the short run, but in the longer run history shows they beat almost every other asset class. That is what made Mr Buffett so rich.

Company%20Profile
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Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

SERIE A FIXTURES

Saturday (UAE kick-off times)

Atalanta v Juventus (6pm)

AC Milan v Napoli (9pm)

Torino v Inter Milan (11.45pm)

Sunday

Bologna v Parma (3.30pm)

Sassuolo v Lazio (6pm)

Roma v Brescia (6pm)

Verona v Fiorentina (6pm)

Sampdoria v Udinese (9pm)

Lecce v Cagliari (11.45pm)

Monday

SPAL v Genoa (11.45pm)

A%20QUIET%20PLACE
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Saturday's results

West Ham 2-3 Tottenham
Arsenal 2-2 Southampton
Bournemouth 1-2 Wolves
Brighton 0-2 Leicester City
Crystal Palace 1-2 Liverpool
Everton 0-2 Norwich City
Watford 0-3 Burnley

Manchester City v Chelsea, 9.30pm 

The specs

Engine: Dual 180kW and 300kW front and rear motors

Power: 480kW

Torque: 850Nm

Transmission: Single-speed automatic

Price: From Dh359,900 ($98,000)

On sale: Now

When Umm Kulthum performed in Abu Dhabi

  

 

 

 

Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.

 
The specs
 
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)

'Unrivaled: Why America Will Remain the World’s Sole Superpower'
Michael Beckley, Cornell Press

Tottenham's 10 biggest transfers (according to transfermarkt.com):

1). Moussa Sissokho - Newcastle United - £30 million (Dh143m): Flop

2). Roberto Soldado - Valencia -  £25m: Flop

3). Erik Lamela - Roma -  £25m: Jury still out

4). Son Heung-min - Bayer Leverkusen -  £25m: Success

5). Darren Bent - Charlton Athletic -  £21m: Flop

6). Vincent Janssen - AZ Alkmaar -  £18m: Flop

7). David Bentley - Blackburn Rovers -  £18m: Flop

8). Luka Modric - Dynamo Zagreb -  £17m: Success

9). Paulinho - Corinthians -  £16m: Flop

10). Mousa Dembele - Fulham -  £16m: Success

Jigra
Director: Vasan Bala
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Rated: 3.5/5
Call of Duty: Black Ops 6

Developer: Treyarch, Raven Software
Publisher:  Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5

Smart words at Make Smart Cool

Make Smart Cool is not your usual festival. Dubbed “edutainment” by organisers Najahi Events, Make Smart Cool aims to inspire its youthful target audience through a mix of interactive presentation by social media influencers and a concert finale featuring Example with DJ Wire. Here are some of the speakers sharing their inspiration and experiences on the night.
Prince Ea
With his social media videos accumulating more half a billion views, the American motivational speaker is hot on the college circuit in the US, with talks that focus on the many ways to generate passion and motivation when it comes to learning.
Khalid Al Ameri
The Emirati columnist and presenter is much loved by local youth, with writings and presentations about education, entrepreneurship and family balance. His lectures on career and personal development are sought after by the education and business sector.
Ben Ouattara
Born to an Ivorian father and German mother, the Dubai-based fitness instructor and motivational speaker is all about conquering fears and insecurities. His talk focuses on the need to gain emotional and physical fitness when facing life’s challenges. As well managing his film production company, Ouattara is one of the official ambassadors of Dubai Expo2020.

The specs: 2019 Jeep Wrangler

Price, base: Dh132,000

Engine: 3.6-litre V6

Gearbox: Eight-speed automatic

Power: 285hp @ 6,400rpm

Torque: 347Nm @ 4,100rpm

Fuel economy, combined: 9.6L to 10.3L / 100km

The specs

Engine: 1.5-litre turbo

Power: 181hp

Torque: 230Nm

Transmission: 6-speed automatic

Starting price: Dh79,000

On sale: Now

The low down

Producers: Uniglobe Entertainment & Vision Films

Director: Namrata Singh Gujral

Cast: Rajkummar Rao, Nargis Fakhri, Bo Derek, Candy Clark

Rating: 2/5

Community Shield info

Where, when and at what time Wembley Stadium in London on Sunday at 5pm (UAE time)

Arsenal line up (3-4-2-1) Petr Cech; Rob Holding, Per Mertesacker, Nacho Monreal; Hector Bellerin, Mohamed Elneny, Granit Xhaka, Alex Oxlade-Chamberlain; Alex Iwobi, Danny Welbeck; Alexandre Lacazette

Arsenal manager Arsene Wenger

Chelsea line up (3-4-2-1) Thibaut Courtois; Cesar Azpilicueta, David Luiz, Gary Cahill; Victor Moses, Cesc Fabregas, N'Golo Kante, Marcos Alonso; Willian, Pedro; Michy Batshuayi

Chelsea manager Antonio Conte

Referee Bobby Madley

Tree of Hell

Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla

Director: Raed Zeno

Rating: 4/5

The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Power: 268bhp / 536bhp
Torque: 343Nm / 686Nm
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
On sale: Later this year
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Nepotism is the name of the game

Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad. 

Sly%20Cooper%20and%20the%20Thievius%20Raccoonus
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SPECS

Engine: Two-litre four-cylinder turbo
Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
On sale: Now

The specs

Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)

COMPANY%20PROFILE
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Prop idols

Girls full-contact rugby may be in its infancy in the Middle East, but there are already a number of role models for players to look up to.

Sophie Shams (Dubai Exiles mini, England sevens international)

An Emirati student who is blazing a trail in rugby. She first learnt the game at Dubai Exiles and captained her JESS Primary school team. After going to study geophysics at university in the UK, she scored a sensational try in a cup final at Twickenham. She has played for England sevens, and is now contracted to top Premiership club Saracens.

----

Seren Gough-Walters (Sharjah Wanderers mini, Wales rugby league international)

Few players anywhere will have taken a more circuitous route to playing rugby on Sky Sports. Gough-Walters was born in Al Wasl Hospital in Dubai, raised in Sharjah, did not take up rugby seriously till she was 15, has a master’s in global governance and ethics, and once worked as an immigration officer at the British Embassy in Abu Dhabi. In the summer of 2021 she played for Wales against England in rugby league, in a match that was broadcast live on TV.

----

Erin King (Dubai Hurricanes mini, Ireland sevens international)

Aged five, Australia-born King went to Dubai Hurricanes training at The Sevens with her brothers. She immediately struck up a deep affection for rugby. She returned to the city at the end of last year to play at the Dubai Rugby Sevens in the colours of Ireland in the Women’s World Series tournament on Pitch 1.

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

War

Director: Siddharth Anand

Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor

Rating: Two out of five stars 

COMPANY%20PROFILE
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