Value Investing

(MoneyWatch) 

Warren Buffett

What would Warren Buffett do now?

The short answer is to buy American.

The famed founder of Berkshire Hathaway made his billions by adhering to the philosophy of value investing — buying stocks when they trade at a discount to their intrinsic value. Buffett uses a value-investing approach developed by Columbia University business professor and legendary investor Benjamin Graham, who preached three basic principles: fundamental company analysis; an aversion to permanent loss of capital; and a satisfactory rate of return.

These days, Buffett argues the best way to pursue those principles is to buy shares in American companies. In a New York Times op-ed column, Buffett put forth his belief that the stock market will continue to trend upward over the long term — and that major American companies will set profit records in years to come.

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