What Buffett looks for in an investment

[MorningStar]

Great Investors: Warren Buffett

by Morningstar, Inc.

The Warren Buffett style of investing teaches that stock-picking isn't rocket science. Buffett, arguably one of the greatest and most revered stock-pickers of all time, says investors shouldn't complicate things by seeking out complicated companies. Stick with what you understand, says Buffett, and choose investments with which you are most comfortable.

Here's what Buffett looks for in an investment.

Easy to understand businesses

Buffett has kept his esteemed investment company, Berkshire Hathaway (BRK.B/NYSE), away from fast-growing, high-returning technology stocks such as Microsoft (MSFT/NYSE). Buffett admits that he just doesn't understand technology well, so he's content to let others make money there. And before investing in a business, he would prefer to determine what the company will look like 10 years in the future, but technology changes too fast to look that far ahead with any confidence.

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