Warren Buffett billionaire has achieved a kind of success as an investor that most of us can dream of.

But his journey as an investor included several simple stages. The first one is familiar to many of us because it is a common place to start. But it was the second stage, as he froze this initial approach in favor of a different approach, Warren Buffett believes that he would turn his performance as an investor.

Value -based investment

Buffett started as known as “value investor”. In other words, he tried to find shares that were sold at less than their current value.

This is a very common way for new investors and many people use it.

For example, why do I have a share between me Logistics Development Group? The main reason is the apparent value offered. The value of the pure net assets last month was 26.1p. The current stock price is More than 40 % less From that.

I hope the company’s investments will grow, as in the Finsbury Food Group group, over time. But even based on the current evaluation, the shares of the Logistics Development Group appear as a good value for me.

The moment of Buffett Litterolb

But the value of the investment can be compared to the cigar.

how? Warren Buffett puts it in this way: “I call this “The back of the cigar” for investment. It may not serve the back of a cigarette in the street, which contains only one blow in that in a lot of smoke, but “purchase of the deal” will make this blow all the profit“

Given that this approach made him money, what caused Pavit to move from that stage of his career to another?

His partner Charlie Monage registered at the lesson, as Monger was ready to pay more for a sweet manufacturer with a more than Buffett more than Buffett at first.

Monger believed that if it was a promising commercial company enough in the long run, then paying more for that will not end here nor in the big plan for things. So prove with See.

Pavite also reflected, “It is better to buy a wonderful company at a fair price from a fair company at a wonderful price“.

How do I use this approach to investment

Warren Buffett’s approach affected me.

For example, when I recently invested I think (LSE: AHT), I am surprised by the price on Adel when I see it as a great company – but not exactly the screaming deal.

Currently, the rate of price to profits is 17 years. This may rise if profits decrease, for example because the weak American economy leads to a lower demand in the United States to employ construction equipment.

But I see him as a great work. It has a business model and acquires a large size over time. This makes her an attractive initial choice for her big customer base and also allows her to serve customers across many different construction sites simultaneously.

Ashtead has taken a kind of long -term approach that Warren Buffett loves himself, carrying out a series of strategic plans to help raise her performance to the next level. This work is still under implementation, something that I hope will help raise the Ashtead share price over time.