What type of stock options?

First,Buffett stressed that the safety stock, very concerned about the well being with the fundamentals and financial status, business value and long term advantages that are closely related, so spend interest to business investment and also the prospects for sustainable competitive advantage, such as companies with strong brand benefits , thereby decreasing investment risk. Only the strong economic momentum was worth investing in high quality companies, high quality doesn't need to shot the stock.

Second,stressed select to invest in the stock cost will be the main motive. The lower the cost, the higher the annual compounded rate of return greater costs, lower annual compounded rate of return.

Third,The emphasis on centralized investment, invest in their own familiar territory or business. In actual investment, as well scattered, frequently yield unsatisfactory. Good prospects for the investments, and sustainable, thus greatly decreasing the risk of concentrated investment, long-term lucrative.
Fourth: consumer monopoly enterprises possess a higher investment worth. Companies with powerful brands such as Coca-Cola, Procter & Gamble, Green Arrow, Kraft and more.

Thus, Buffett invests primarily in customer monopoly enterprises. Mainly from the profits of such enterprises intangible assets, like a strong brand, which does not depend on the land, plant and equipment and other capital investments. He will consider the following questions by identifying such companies, if any, identifiable consumer monopoly, like a powerful brand or key services; making huge profits and show a strong upward trend; debt less; even heavier debt, but if a customer Monopoly enterprises for the acquisition of another cancellation fee monopoly enterprises, investment danger will be negligible, because it is easy to spend liabilities in the short term; cash flow with the more abundant; always maintain a high return on equity; to maintain the current operating costs are not will be significantly increased; have sufficient retained earnings for investment in new projects; able to adjust costs to adapt to inflation.

Therefore, he will invest within the following types of companies: the products are consumables, with the brand appeal; communications business providing advertising services; to provide the consumers or other companies continue to demand the services companies and so on. Moreover, when these companies were facing economic recession or when the shares fell, which provided an opportunity for investors, because the strong survive and the weak out with the long term development of these businesses is likely to be better. Referred to these to be possible for you who craved the stock to provide the small secret.