I have read a lot. I understand many terms and many concepts. I still have trouble understanding how Buffett makes money though.
So when he first started out he invested his family's 100 grand and it jumped to millions. Okay. I get this. But did he sell it then? Because if he is all about buying and holding, and he never sells, how does he make money? I do not mean in assets. I mean in liquid cash to buy stuff. Say Bob has 20000 shares of Coke; he would be rich in assets. But say Bob wants to buy a house, and he sells his stocks, he will have a lot of cash. But now he won't have the stocks anymore! Yet he wants to reinvest. Does Bob buy stocks of a new company? Or does he buy back Coke shares? So how does it all work? Does Buffett trade options? I mean investors in general. Besides dividends.
Please explain how Buffett made his first few million without Berkshire Hathaway. Did he sell the GEICO stocks and such, or have another method to make money without selling? I mean cash, not assets.
Thanks.
I really get *how* he invested and the stock went up. I don't get how a good portfolio can be used to buy more stocks without selling.
A portfolio can rise 40%. Okay. But now what? Just watch it grow? Use dividends? What does Buffett do? Keep his stocks and trade options? Bonds? ETFs?
So when he first started out he invested his family's 100 grand and it jumped to millions. Okay. I get this. But did he sell it then? Because if he is all about buying and holding, and he never sells, how does he make money? I do not mean in assets. I mean in liquid cash to buy stuff. Say Bob has 20000 shares of Coke; he would be rich in assets. But say Bob wants to buy a house, and he sells his stocks, he will have a lot of cash. But now he won't have the stocks anymore! Yet he wants to reinvest. Does Bob buy stocks of a new company? Or does he buy back Coke shares? So how does it all work? Does Buffett trade options? I mean investors in general. Besides dividends.
Please explain how Buffett made his first few million without Berkshire Hathaway. Did he sell the GEICO stocks and such, or have another method to make money without selling? I mean cash, not assets.
Thanks.
I really get *how* he invested and the stock went up. I don't get how a good portfolio can be used to buy more stocks without selling.
A portfolio can rise 40%. Okay. But now what? Just watch it grow? Use dividends? What does Buffett do? Keep his stocks and trade options? Bonds? ETFs?