Every investor can earn multimillion dollars from the stock market during their lifetime of investing and retire wealthy. This is not a get-rich-quick scheme, but investing intelligently and getting rich slowly and steadily. Warren Buffett learned investing from Ben Graham. Initially he practiced Ben Graham’s teachings. Then his principles evolved and he finally beat his mentor’s investment successes.
When Graham died, he left an estimated $3 million dollars. Today Warren Buffett’s net worth is around $45 billion dollars. Graham once told California investor Charles Brandes, “Warren has done very well.”
Buffett started with Graham’s cigar-butt approach, buying the stocks that are trading for less than net current asset value regardless of the company. He started reading Phil Fisher and was influenced by his partner Charlie Munger. He then slowly started to recognize the successes of growth companies. So, he started buying sustainable, competitive, growing companies with fair prices and holding them for the long term.
In this way Buffett learned investing from his mentor and eventually beat his mentor’s investment success. You can learn from Warren Buffett and replicate his investment success. Buffett started his Partnership fund in 1956 and got money from family and friends — around $100,000. He invested his $100.
From 1956 to 1969, Buffett generated a gross return of 31.6 percent compound annual return, which excludes the general partner allocation. He generated 25.3 percent compound annual net return after expenses and general partner allocation. After Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial), apart from investing in the stock market, he started buying whole companies and leaving the existing managers to run the companies. Buffett allocated the money generated by the companies. Berkshire Hathaway’s book value increased 20.3 percent compounded annual return for 45 years from 1965 to 2009. Achieving such a great return for such a long time made Buffett the most successful investor of the 21st century.
Buffett has shared his investment principles in Berkshire Hathaway’s annual letters, numerous interviews and speeches at different universities. If you have a goal to replicate Buffett’s investment success, you can do it by studying his investment principles and putting them to work for you. His overall investing principle is very simple, but execution of it requires patience and independent thinking.
I am not advising you to go ahead and buy the stocks that Buffett buys. Rather, you can learn Buffett’s investment principles and buy your own stocks and manage your portfolio the same way he manages his. You will be able to replicate his investment successes and find success in the stock market. I am sure you have your doubts, so I am providing the following calculation as an example. Your full-time profession may not allow you to become a fund manager or you may not believe you will be able to build an empire like Berkshire Hathaway, and that is fine. I can understand that. You do not need to be a fund manager or build a wildly successful company. In the following example, you can see how you can invest your own money without outside investors, starting with a modest investment amount of $25,000 at the age of 20 to 25. You have an at least 50 to 60 years of lifetime remaining.
Buffett Partnership generated a 31.6 percent compound annual return for 12 years. You can apply the same return information to your initial investment of $25,000.
Final amount = $25,000 * (1+ 0.316)12 = $0.674 million.
Berkshire Hathaway generated 20.3 percent for 40 years, from 1969 to 2009.
Final amount = $0.674 million* (1+0.203)40 = $1.09 Billion.
I know you many have more doubts about these calculations. You could argue that Buffett is a genius and others cannot generate the same annual compound return like he did. But, in fact, many of Warren Buffett’s followers including me did just that — that’s fine. So a reasonable expectation is, say you are generating just 50 percent of his investment successes in your lifetime, a reasonable and attainable goal.
Here is the calculation, say 15 percent compound annual return for first 12 years:
Final amount = $25,000 * (1+0.15)12 = $0.133 Million
Then 11 percent return like just 50% of Berkshire Hathaway's book value, which increased for the last 40 years:
Final amount = $0.133 million * (1+0.11)40 = $8.64 million
You can argue that the market won’t go up every year. I can understand that, Warren Buffett generated 20% return for last 52 years including many recessionary periods. You can do that too. For your argument I can discount additional 50% from your calculation for recessionary periods, but even then you end up with $4.32 million when you are retiring.
Not everyone has 52 years of life ahead. Depending on your age, you can adjust your final amount. The above mentioned calculation is calculated from just the initial investment of $25,000. What about adding additional capital investment every year and calculating compounded annual return for those investments? You have to end up a multimillionaire. Just be confident that you, too, can make multi-millions of dollars from the stock market, if you invest like Warren Buffett.
You do not need to be a genius to replicate, or at least partially replicate, Buffett’s investment success. You do not need a master’s degree in business administration (MBA) or to even run your own business. You should, at least, have interest in learning Buffett’s investing principles and how to implement those principles. Those factors are explained in “Creating a Portfolio like Warren Buffett: A High Return Investment Strategy.” Believe in yourself, you can do it.
Before reading books about Warren Buffett, I did not know the basics of stock investing. All of my investment knowledge has come from reading books written about Buffett, Berkshire Hathaway’s annual letters, listening numerous interviews of Buffett and the reverse engineering of his investments over many years.
Each time Buffett buys a new stock, I try to find out why he bought that company’s stock at that specific time. Basically, I try to understand his investment reasoning.
After successfully implementing his investing principles into actual trades with my own money, I was very confident that I could handle other people’s money and do the same. I did follow Buffett’s footsteps and started my own investment partnership fund, with the same rules that he used when he started his partnership. I beat Buffett Partnership's returns with a wide margin and got to the top 5 percent of all mutual and hedge fund managers. I am very confident that Warren Buffett’s investment principles will continue to guide me to deliver great returns in the future, too. If you are able to implement Warren Buffett’s investing principles and execute them properly, you can deliver excellent returns for your investment portfolio. As an individual investor, you are in a more advantageous position than Buffett. Here’s why:
1.He manages a $50 billion investment portfolio and he can select only large-cap stocks. He cannot invest in small and mid-cap companies because those investments will not make much difference to his portfolio.
2.You can buy and sell your portfolio holdings faster without affecting the price of the stock; Buffett cannot do that. For example, he owns around 10 percent of Coca-Coca. If he feels that Coca-Cola’s stock price becomes overvalued at the current market price and decides to sell at that price, he will not be able to sell all of his holdings at that price. It is not likely there will be a buyer for such a large amount of stock. He needs to sell slowly, without affecting the price of the stock. If he tries to sell all his holdings in a couple of days, his selling alone will knock down the price of Coca-Cola stock.
In this book, I will explain how to implement Warren Buffett’s investing principles step-by-step, using actual investment examples. All you need is confidence, and to believe that you can replicate Warren Buffett’s investment success. Believe in yourself. You can do it.
When Graham died, he left an estimated $3 million dollars. Today Warren Buffett’s net worth is around $45 billion dollars. Graham once told California investor Charles Brandes, “Warren has done very well.”
Buffett started with Graham’s cigar-butt approach, buying the stocks that are trading for less than net current asset value regardless of the company. He started reading Phil Fisher and was influenced by his partner Charlie Munger. He then slowly started to recognize the successes of growth companies. So, he started buying sustainable, competitive, growing companies with fair prices and holding them for the long term.
In this way Buffett learned investing from his mentor and eventually beat his mentor’s investment success. You can learn from Warren Buffett and replicate his investment success. Buffett started his Partnership fund in 1956 and got money from family and friends — around $100,000. He invested his $100.
From 1956 to 1969, Buffett generated a gross return of 31.6 percent compound annual return, which excludes the general partner allocation. He generated 25.3 percent compound annual net return after expenses and general partner allocation. After Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial), apart from investing in the stock market, he started buying whole companies and leaving the existing managers to run the companies. Buffett allocated the money generated by the companies. Berkshire Hathaway’s book value increased 20.3 percent compounded annual return for 45 years from 1965 to 2009. Achieving such a great return for such a long time made Buffett the most successful investor of the 21st century.
Buffett has shared his investment principles in Berkshire Hathaway’s annual letters, numerous interviews and speeches at different universities. If you have a goal to replicate Buffett’s investment success, you can do it by studying his investment principles and putting them to work for you. His overall investing principle is very simple, but execution of it requires patience and independent thinking.
I am not advising you to go ahead and buy the stocks that Buffett buys. Rather, you can learn Buffett’s investment principles and buy your own stocks and manage your portfolio the same way he manages his. You will be able to replicate his investment successes and find success in the stock market. I am sure you have your doubts, so I am providing the following calculation as an example. Your full-time profession may not allow you to become a fund manager or you may not believe you will be able to build an empire like Berkshire Hathaway, and that is fine. I can understand that. You do not need to be a fund manager or build a wildly successful company. In the following example, you can see how you can invest your own money without outside investors, starting with a modest investment amount of $25,000 at the age of 20 to 25. You have an at least 50 to 60 years of lifetime remaining.
Buffett Partnership generated a 31.6 percent compound annual return for 12 years. You can apply the same return information to your initial investment of $25,000.
Final amount = $25,000 * (1+ 0.316)12 = $0.674 million.
Berkshire Hathaway generated 20.3 percent for 40 years, from 1969 to 2009.
Final amount = $0.674 million* (1+0.203)40 = $1.09 Billion.
I know you many have more doubts about these calculations. You could argue that Buffett is a genius and others cannot generate the same annual compound return like he did. But, in fact, many of Warren Buffett’s followers including me did just that — that’s fine. So a reasonable expectation is, say you are generating just 50 percent of his investment successes in your lifetime, a reasonable and attainable goal.
Here is the calculation, say 15 percent compound annual return for first 12 years:
Final amount = $25,000 * (1+0.15)12 = $0.133 Million
Then 11 percent return like just 50% of Berkshire Hathaway's book value, which increased for the last 40 years:
Final amount = $0.133 million * (1+0.11)40 = $8.64 million
You can argue that the market won’t go up every year. I can understand that, Warren Buffett generated 20% return for last 52 years including many recessionary periods. You can do that too. For your argument I can discount additional 50% from your calculation for recessionary periods, but even then you end up with $4.32 million when you are retiring.
Not everyone has 52 years of life ahead. Depending on your age, you can adjust your final amount. The above mentioned calculation is calculated from just the initial investment of $25,000. What about adding additional capital investment every year and calculating compounded annual return for those investments? You have to end up a multimillionaire. Just be confident that you, too, can make multi-millions of dollars from the stock market, if you invest like Warren Buffett.
You do not need to be a genius to replicate, or at least partially replicate, Buffett’s investment success. You do not need a master’s degree in business administration (MBA) or to even run your own business. You should, at least, have interest in learning Buffett’s investing principles and how to implement those principles. Those factors are explained in “Creating a Portfolio like Warren Buffett: A High Return Investment Strategy.” Believe in yourself, you can do it.
Before reading books about Warren Buffett, I did not know the basics of stock investing. All of my investment knowledge has come from reading books written about Buffett, Berkshire Hathaway’s annual letters, listening numerous interviews of Buffett and the reverse engineering of his investments over many years.
Each time Buffett buys a new stock, I try to find out why he bought that company’s stock at that specific time. Basically, I try to understand his investment reasoning.
After successfully implementing his investing principles into actual trades with my own money, I was very confident that I could handle other people’s money and do the same. I did follow Buffett’s footsteps and started my own investment partnership fund, with the same rules that he used when he started his partnership. I beat Buffett Partnership's returns with a wide margin and got to the top 5 percent of all mutual and hedge fund managers. I am very confident that Warren Buffett’s investment principles will continue to guide me to deliver great returns in the future, too. If you are able to implement Warren Buffett’s investing principles and execute them properly, you can deliver excellent returns for your investment portfolio. As an individual investor, you are in a more advantageous position than Buffett. Here’s why:
1.He manages a $50 billion investment portfolio and he can select only large-cap stocks. He cannot invest in small and mid-cap companies because those investments will not make much difference to his portfolio.
2.You can buy and sell your portfolio holdings faster without affecting the price of the stock; Buffett cannot do that. For example, he owns around 10 percent of Coca-Coca. If he feels that Coca-Cola’s stock price becomes overvalued at the current market price and decides to sell at that price, he will not be able to sell all of his holdings at that price. It is not likely there will be a buyer for such a large amount of stock. He needs to sell slowly, without affecting the price of the stock. If he tries to sell all his holdings in a couple of days, his selling alone will knock down the price of Coca-Cola stock.
In this book, I will explain how to implement Warren Buffett’s investing principles step-by-step, using actual investment examples. All you need is confidence, and to believe that you can replicate Warren Buffett’s investment success. Believe in yourself. You can do it.
