Secrets of Warren Buffett's Investing Strategy - Stock Market Passive In...

Lesson 2-Fundamental Investment

             A Fundamental Investment is a an investment that will give ROI in the long run,is much more safe but does require you to have some capital in order to invest.The first to give a definition on this subject was Benjamin Graham who thought his best student Warren Buffett in : The Inteligent Investor

that in order to establish the value of an investment(in order to make a fundamental investment) you need
to look at the following factors:

• what is the business ROI and does it have low DEBT?
• look for good companies that are undervalued
• what is the company's defense system on the market an is it sustainable over a 5-10 years?
• only invest in businesses you understand and are predictable to you
• do you trust the people that manage that company?

Lesson 1-Return of Investment(ROI)

      The first and most important indicator of any  investment or business for that matter  is the ROI(Return of Investment)-which is considered to be of the upmost importance when deciding if the cost of investment is worth while,for it evaluates the efficiency of the investment and it will help you determine how long it will take to reach break-even .

The result is usually multiplied by 100 so it will result  in (%) and is a the most used  indicator to evaluate all types of investments long,medium or short term.