How come Warren Buffett is such a fantastic investor?
To answer that question we first need to look into what Warren Buffett has actually done.
He studied at Columbia University under the legendary Benjamin Graham where he learned the fundamentals of value investing.
What a value investor does is that he or she is looking for securities which prices are below its intrinsic worth.
What matters is the price. Buffett knows that if he can buy a well-run company for pennies on the dollar, sooner or later the market will appreciate its error and see the price of the security rise.
That is value investing and that was exactly what he did in the early days of his investing career.
For instance he bought a 5% stake in in American Express in the mid-1960’s for $13 million dollars.
There are of course a few metrics that he looks at when investing in a company:
Good luck with your investments. If you want to look at value metrics of small-cap stocks you can look here.