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Strategies & Market Trends : How a normal person can invest like Warren Buffett

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From: InvestorBlogger10/20/2013 12:07:11 PM
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It certainly is hard to invest like Warren Buffett. Why? Because he has found ways to gain leverage in his investing that you and I cannot, as retail investors, attain.

1. His investing always uses 'free cash'. One of the aspects of this free or float is that the money is available for use that has been 'earned' but not spent. Insurance type businesses offer this advantage, as do a number of other business types. For most retail investors, salary & contributions are most definitely not free money. They are not even float, because this money likely has to be paid out soon.

2. Leverage: he has leveraged his negotiation skills to get additional margin of safety via preferred shares, advantageous pricing, and substantial dividends. While margin of safety is a method of thinking we can apply, we wouldn't come close to his ability.

3. Attracting Talent: he is absolutely able to find, attract and reward some really talented individuals. These people help him to manage his businesses, because that's what they are to him, not investments. He's not planning to sell these stocks tomorrow or the day after. And he will spend hours scanning reports from everywhere. Again, this is not something most retail investors have the luxury of doing.

That's not to say we can't learn a few things from Buffett's style of investing, but we can't expect to emulate him entirely.
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