And that endeavor becomes fascinating when somebody towers above the rest of us in a supreme achievement of creating and sustaining the maximum wealth in his lifetime. If you have not guessed it by now, our introductory feature of Fascinating Finance focuses on the Oracle of Omaha - Warren Buffet, the second richest person in this planet with a staggering amount of $ 32 billion under his belt. These are six characteristics that the world's most successful investor considers before making any investment. Of course, these were not all. An uncanny sense of genius always prevailed in him while stock picking. This made him sometimes break his rules and go by his hunch. And till now, he has been proved right !! His style is not without its critics, many believing he and his style is too cheap. Whether one supports him or not, the proof of the pudding is in the eating thereof - as of the last year he has amassed himself a net worth of over $32 Billion (Forbes 2001).

Snapshots of the investment criteria of Warren Buffet

Has the company performed well consistently?

Warren Buffet always looks at the ROE ( Return On Equity ) to see if a company has consistently performed well (a period of past 5-10 years ) in comparison to other companies within the same industry. ROE is calculated as follows: Net Income/ Shareholder's Equity.

Has the company avoided excess debt?

Buffett prefers to see very small amount of debt that his invested company has so that earnings growth is being generated from shareholders equity.

Are profit margins high? Are they increasing?

A high profit margin indicates that the company is executing its business well, but increasing margins means that management has been extremely successful in increasing efficiency and controlling expenses. Warren believes that to get a good indication of historical profit margins investors should look back at least five years.

How long has the company been public?

Buffett typically only considers companies that have been around for at least 10 years, never underestimating the value of historical performance and a company's track record to demonstrate an ability to increase shareholder earnings.

Do the company's products rely on a commodity?

Buffet refuses to consider companies whose products do not have something that is different from its competitors. In other words, he wanted companies to be unique, so that it always has a good potential to growin the future.

Is the stock selling at a 25% discount to real value?

This criterion of Warren Buffet is a really nutty one, and yet the most stringent.. Buffet believed always in keeping a safe distance from over heated stocks and more so hunted for cheap, good stocks.

Break The Ice