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Warren Buffett and Stock Investing

Discussion in 'Lessons from Success/Failure' started by Bryan James, Sep 2, 2018.

  1. Bryan James
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    Bryan James Bronze Contributor Speedway Pass

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    As a manager of stock market portfolios for people, I constantly hear people wanting to invest like Warren Buffett and my response is always the same: Can you afford to? Obviously most (as in 99.9999%) cannot. I try to put into people's heads that WB can afford to lose millions (if not more) and has done so many times. Furthermore, he literally can't invest in certain companies because of his net worth; he's legally stuck with larger-cap blue-stock companies for the most part (depending on how much he invests or how much Berkshire invests). Even furthermore, most people don't understand that in order to invest as successfully as he does, it's not all about the companies he buys into. He always talks about compound interest dividend reinvestment, but like MJ points out (accurately) that tactic only works with extremely large sums of money and when/if it even does work, it takes decades of doing this to see anything resembling a significant return; certainly not fastlane in other words. I'm posting this just in case someone here was looking to get involved in stocks and want to be the next Warren Buffet or whathaveyou.
     
  2. lewj24
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    lewj24 Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Most people can invest just like Warren Buffet. He started at the bottom like everyone else. He is not a mutual fund investor. He's an entrepreneur who came from a family of entrepreneurs.

    He pretty much owns 100% of over 60 huge companies, including Geico, Fruit of The Loom, Dairy Queen, etc. He doesn't just invest in companies, he runs companies.
     
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  3. InspireHD
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    InspireHD Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    MJ talks about the stock market not being your mode of wealth creation. If you’re saving $25 a month for 50 years, you’re doing it wrong. But having the fast lane wealth and then investing to create a money system is what he refers to.

    Anybody can invest like Warren, but too many people think they need to be riding the Facebook, Twitter, and Tesla trains and are approaching the markets completely the wrong way.

    A true investor should be looking for businesses that are undervalued. Anybody can look for businesses that are undervalued and potentially make above average returns. The problem is that people don’t do that. It takes time to research and dig for those companies and potentially sit on your hands for months. Most people feel they need to be in and out of the market every day or fear missing out on big moves by Apple or Amazon.

    Further, if you’re managing other people’s money then you can build a fast lane business around that. Build up that pool of money, manage it for them, take your fee, and you can do really well for yourself. If you produce the returns, you’ll have more than enough money to invest like Warren.
     
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  4. bytecode
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    bytecode Contributor Read Millionaire Fastlane

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    Warren Buffet actually took the Fastlane route before ever really investing heavily. He made his first several million as an employee of Benjamin Graham and through 7 different partnerships. It was only in 1962 that acquired Berkshire Hathaway. He still operated it as a company. In late 60's or early 70's was when he really started to buys stocks using Berkshire Hathaway as a holding company.

    So yeah, most people can invest like him. But unless the go down the Fastlane first, they won't reach the same success.
     
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  5. jazb
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    jazb Silver Contributor Read Millionaire Fastlane Speedway Pass

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    People who ask that need to understand the difference between an active investor and a passive investor.
     
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  6. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Warren is also an activist investor ... which means he buys blocks of stock so he can manipulate the company by having a big shareholder vote or by throwing people on the board.

    Imagine buying 100 shares of Apple and actually thinking you can influence the company direction. You can't. Warren can.

    Regular stock investors have ZERO control (outside of their shareholder vote).

    Big distinction.
     
  7. Jaden Jones
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    Jaden Jones Igloo Builder Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I think people can still invest like Warren used to, which was value investing, but they need to put in the time. It takes research to find companies undervalued, and its not really something someone can do for you. A good self investor can use some of his practices to see 25% returns year over year.
     
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