Stock Market Investing Lessons from Mary Buffett

True wealth in the stock market is knowing and deciding which companies to invest in. Many people have turned to Warren Buffett, the "Godfather" of stock market investing, a man who has created billions of dollars with his company, Berkshire Hathaway. There are many stock market buffs who have taken classes specifically to learn Buffet's strategies and there are dozens of books out on the market that share some of these strategies.

In the book, Buffettology, written by Mary Buffett, I learned many lessons about how to determine which business is the right business to invest in. Mary Buffett is a former daughter-in-law of Warren Buffett who shares what she learned from the guru himself.

In Chapter 17 Mary Buffett explains where to look for these businesses to invest in. She explains the three types of businesses that produce excellent results:

1. Businesses that have brand-name appeal and make products that wear out fast or are used up quickly. Examples of this would include companies that sell food, household products like cleaners, or beauty and hygiene products like toothbrushes or razors. I think it makes sense to invest in companies that offer products that wear out or are used up fast. Items such as shampoo, toilet paper, and toothpaste come to mind. That means people are constantly paying money for these items and the companies that provide them will always see money coming in.

2. Communications businesses that provide a repetitive service which companies must use to persuade the public to buy their products. Advertising in media is a must for companies to attract the masses. Buffett saw an opportunity to invest in these communications businesses like major TV networks and newspapers.

3. Businesses that provide repetitive consumer services that people and business are consistently in need of. Services such as professional dry cleaning, maid service, or lawn care would fall under this category. In this sector Warren Buffett has invested in credit card companies such as American Express and Discover. These are the types of companies that are always going to be around no matter what's going on and they don't require substantial money or energy to upgrade or develop their services, thus providing a high rate of return on equity.

After reading this, I've seriously considered investing in a business such as the Hershey Company (NYSE:HSY). Almost everyone loves chocolate, right? I hardly think that chocolate is ever going to go away and the company has been around for over 100 years. It's pretty much a no-brainer.

Also, I'm doing research on several media companies to invest in. It's true that communications businesses will always be around as long as there are advertisers around willing to pay for advertising.

Investing in the stock market and deciding which companies to invest in is indeed an art form. Who better to learn from than Warren Buffett? There are many more lessons to learn in the book, Buffettology. I highly recommend it!