How to invest like Warren Buffett. Warren Buffet is the second richest man in the word with a estimated fortune of $47billion, he was formerly the most richest man but has reprised his role to Bill Gates. Warren Buffett made most of his wealth on the stock market, he has successfully taken $10,000 and turned it into the fortune he has today. If we can learn to invest like Warren Buffett then we can emulate some of his success. Here are 5 steps to how to invest like Warren Buffett,

STEP 1 - ACCOUNTANT SKILLS

Warren Buffett has exposure to accountancy, he has the ability to look at a companies financial and see whether the share price is undervalued or overvalued, if the investor thinks that the price is undervalued then he will buy large quantities of the stock, if the price falls further he will buy even more. Warren Buffett believes in his analysis and from his track record no one can blame him, most of his followers replicate what the billionaire investor does and make substantial profits.

STEP 2 - VALUE STOCK

Warren Buffet invests in value stock, this is when he sees the company has a great business plan and a even better management structure in place, he also believes in the product, some of Warren Buffets holding include Coca Cola, Gilette and Goldman Sachs which have a strong balance sheet and a great management in place, there will always be a demand for soft drinks, razors and a place to invest money which is why WB invests in these companies aggressively.

STEP 3 - TIME FRAME

There are several periods you can invest in, some people prefer to trade daily where they open and close a position in one day, others keep them open for a week or several week. Warren Buffett looks at the long term picture, he does not concern himself with intra day or week fluctuation, WB keeps his positions open for decades, he knows that ultimately the price will rise as the economy improves. At the moment (recession 2009) he is busy buying up great companies at cheap prices, no doubt he will regaine the top spot within 5 years.

STEP 4 - PATIENCE

Warren Buffet is a very patient man, when he believes in the companies management and the product he is willing to wait a long time for his investments to come to fruition, normally when the investment value is realised by city traders the stock starts to appreciate and this is where WB makes most of his money. WB is astute, he knows when to enter and when to exit, he has a saying "Be greedy when everyone is fearful and be fearful when everyone is greedy".

STEP 5 - RATIONAL DECISION MAKING

Warren Buffett never makes a decision based on his emotion, he is a rational thinking, his decisions are based on facts and figures, he assesses the companies past, how good the management is and how much demand there is for the product, once his strict decision making criteria is fulfilled only then does he go into his trade, WB's analysis is very thorough and that is why he believes in his trades and why they eventually come to fruition.