Since retiring from his 19-year basketball career in 2011, Shaquille Oâ€™Neal has seen just as much success off the court:
He wasÂ an early investor in GoogleÂ and has since accumulated an impressive portfolio, includingÂ investmentsÂ in Apple, 24 Hour Fitness and nightclubs in Las Vegas. He alsoÂ owns 17 Auntie Anneâ€™s, a Krispy Kreme franchise and a Big Chicken restaurant in Las Vegas.
When it comes to investing, the former NBA star draws inspiration from Amazonâ€™s founder and CEO: â€œI heard Jeff Bezos say one time [that] he makes his investments based on if itâ€™s going to change peopleâ€™s lives,â€Â Oâ€™Neal told the Wall Street JournalÂ in a recent interview. â€œOnce I started doing that strategy, I think I probably quadrupled what Iâ€™m worth.â€
It helps him decide what opportunities to jump on and which ones to pass up. â€œIf something comes across my desk and I donâ€™t believe in it, I donâ€™t even look at it,â€ said Oâ€™Neal, even if it looks excellent on paper. In fact, he rarely focuses on the numbers: â€œWhenever I do business, itâ€™s not about the money.â€
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As heÂ told CNBCâ€™s Bob Pisani last year, â€œI never say, â€˜If I invest in this, five years down the line, we could sell it for this.â€™ Every time Iâ€™ve had that model, itâ€™s always been a failure.â€
Heâ€™s not the only successful investor who sticks with what he knows and trusts. â€œMake sure youâ€™re investing in things that you believe in, as opposed to investing in things that other people believe in,â€ PayPalâ€™s senior vice president of international markets, Rohan Mahadevan,Â tells CNBC Make It. He recommends testing a product or service before investing in it to better understand how the business operates.
Oâ€™Neal also prefers to work with companies he personally enjoys. Of all of his investments, Krispy Kreme is his favorite, he told the WSJ, â€œbecause I like donuts. … Krispy Kreme is a fabulous donut. I was introduced to it in college and have been in love with it ever since.â€
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That said, you donâ€™t necessarily want to invest in something just because you like it. You want to make sure you truly understand the company, too,Â says legendary investor Warren Buffett: â€œWhat an investor needs is the ability to correctly evaluate selected businesses. Note that word â€˜selectedâ€™: You donâ€™t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence.
â€œThe size of that circle is not very important; knowing its boundaries, however, is vital.â€
Simply put, when it comes to investing, Buffett says toÂ stick to what you know. â€œDefining what your game is â€“ where youâ€™re going to have an edge â€“ is enormously important.â€
Once youâ€™ve done that,Â buy and hold, he adds: â€œIf you arenâ€™t willing to own a stock for 10 years, donâ€™t even think about owning it for 10 minutes.â€
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