Understanding a business before you invest is one of Buffett’s famous pieces of advice, and Winfrey took it to heart.
Oprah Winfrey made a name for herself by giving advice to millions of people through her media empire. Recently, she borrowed a lesson from Warren Buffett’s playbook, and it paid off.
Winfrey spent $43 million on Weight Watchers stock in October 2015, and since then, the price has soared from $7 a share to $101. That added $427 million to Winfrey’s $4 billion fortune. She reportedly tried the diet company’s new food plan herself and then backed the business with her personal brand by joining the board.
Understanding a business before you invest is one of Buffett’s famous pieces of advice. The Berkshire Hathaway founder says he must comprehend how a company makes money and the main drivers that impact the industry in less than 10 minutes. If not, he doesn’t invest. While the so-called Oracle From Omaha mostly takes his own advice–he shies away from investing in tech company stocks, for instance–he has stakes in Apple and IBM. He also famously indicated that he missed out on investing in Amazon.
Even so, sticking to your knitting is a good idea. Buffett argues people can’t predict the future with 100 percent accuracy and should therefore avoid situations that rely on a precise forecast. Winfrey took that advice to heart by putting her money into something she used and grasped.
By Emily Canal| INC