Warren Buffet: You Can Turn $40 into $10,800,000

“With a wonderful business, you can figure out what will happen; you can’t figure out when it will happen. You don’t want to focus on when, you want to focus on what. If you’re right about what, you don’t have to worry about when” - Warren Buffet.

As the third richest person in the world, Buffet knows how to turn $40 into $10 million in a lifetime - you have to invest as you are investing in a piece of business.

An example is his own investment in Coca-Cola. If you have purchased a stock of Coca-Cola in 1919 for $40 (around $540 today), you would have made nearly $10 million today because of dividends, reinvestment of the dividends and stocks-splits. Of course, now it is easy to say that it was a good investment, however, back in 1919 not so much. After The First World War sugar prices were extreme, but The Second World War resulted in rationing.

The idea is that if you are in right business, there is no right time for buying a stock. You have to invest in the business that is:

- Easy to understand

- Has a strong management team

- Has a long-term orientation

- Pays investors for their assumption of risk (dividends)