Invest like Warren Buffett

How many people have told you this: “Invest like Warren Buffett”.

Excellent piece of advice, now how I wish it were possible.

Let us get the facts right, WB is NOT the world’s greatest fund manager.

He is not the world’s most charitable person. He is not….there is a whole list of what he is not. So copying him is not only tough but also impossible. He is a hard nosed businessman who very strongly believes in the American capitalistic way and also is convinced that his strategy will work over the next few years.

Remember if you were born in a rich and prosperous nation, had the whole world market open to you, YOU WOULD BELIEVE in capitalism, nothing wrong.

Sadly we are NOW in a far more difficult world. Many of today’s younger people are worried about the bad effects by products which their companies make. WB had/ has no conscience pricks about investing in Tobacco, Goldman Sachs (he keeps criticising the BFSI space nevertheless), Coke (sugar addiction is worse than heroin addiction), Moody (the same people who rated all those junk bonds as AAA), …

NO THIS IS NOT A CRITICISM OF WB, just stating the facts.

Also do remember to invest like Buffet you should be able to buy a business outright, take part in the management, speak up the industry, speak up the markets, speak up the share. Take the company private, sell off the non productive assets, make wholesale changes, speak to the bankers and make funds cheaper, cancel ESOPs, issue Esops, induct a couple of billion as risk capital, subscribe to options, fund a few billion as a loan,….and then take the company public. How much of this do you EVEN understand, forget doing?

Prashant Jain, Naren Sankaran, Balasubramainam, Sunil Singhania,……….none of them can do this. Forget whether they can, they CANNOT, because they are fund managers, not business owners.

The people who can do this are business owners like Deepak Parekh, Dhirubhai Ambani, Vellayan, Tatas, Birlas,…..et al.

So if you have to compare your performance compare yourself to fund managers – you can do all that they can, but not to WB. WB can only be compared to the second set of people – and please compare their performance to WB, it is comparable and in far more difficult circumstances 🙂

And before you compare yourself to the fund managers please do remember they have research teams, analysts, assistant fund managers, …..etc. to help them. You are a lone ranger, so all the best.

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4 Responses to “Invest like Warren Buffett”

  1. Thank you Subra!
    Crystal clear reasons explaining why retail investors are quitting equities in droves and will soon be an endangered species in the stock market.

  2. Rajasekharan N. on March 28th, 2013 at 11:30 am

    However, note that Warren too started humble, didn’t inherit wealth, didn’t have access to any resources, board rooms etc. But how did he tread up? Simple. Reading, rational thinking, and making decisions based on that, and swimming against the herd mentality! I do believe that anyone can repeat it in the US sticking to the principles.

    I do agree that it is doubtful to be repeated in India, the reasons being parallel black money economy, government interference in every business at every level, and corruption to the core. You need to develop a sixth sense, a sense to perceive a lot of associated things beyond financials.

  3. Well said Subra !!!

    You always make me think more and more 🙂

  4. nice info…

    would be happy, if you could help me whether real estate ( land/flat) investment is better or gold???

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