[Luutzu] I think you got the facts right, but the argument is fundamentally flawed. Yes ...

Luutzu — 2/17/2016 4:33:39 AM

I think you got the facts right, but the argument is fundamentally flawed.

Yes it is true that it's hard to invest like Buffett - not going to argue that he's just like one of us.

Yes it's true that the floats and free cash from insurance and other businesses he now owns goes a long way.

But Buffett was a successful investor long before all these floats and reputation and stature comes to affect his performance. That is, he started out just like us small people. Even got into Technical Analysis and a long sting looking for just cigar butts too.

So how does an investor invest like Buffett? Do what he and Graham and Fisher have said: look at each investment as a business - everything else will follow.

So the problem would be whether we can analyse a stock as a business or not; whether we have the patient and the ego to think that we know more than the market and see a gem while they see a useless rock; whether the economy and its corporations now and into the future is as bright as it has been for Buffett after WW2 when the great boom really takes off.

Knowing how is one thing; finding opportunity is another. Finding then acting on it is what really does it.

So while we might not be the next Buffett, following his and Grahams and Fisher's principles should work out alright in the end I believe.

[InvestorBlogger] It certainly is hard to invest like Warren Buffett. Why? Because he has found wa...

InvestorBlogger — 10/20/2013 12:07:11 PM

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.

Silicon Investor - How a normal person can invest like Warren Buffett

[Luutzu] I think you got the facts right, but the argument is fundamentally flawed. Yes ...

[InvestorBlogger] It certainly is hard to invest like Warren Buffett. Why? Because he has found wa...