Just call me Warren Buffett The 2nd in stock picking.
Because when it comes to investing, Warren Buffett's the freakin' man! Why start from scratch analyzing and trying to pick the very best stocks out there when I know absolutely *nothing* about the industry?Don't get me wrong, I'll still be doing my best to learn and see why, exactly, he picks what he picks, but when it comes down to it I trust his opinions over anyone else's out there - obviously including my own ;) After all, it was Buffett himself who said he doesn't invest in anything he's not familiar with! And since I'm not familiar yet, I shall copy him :) haha...
Actually, I should say I'll be copying his stock choices minus some financial ones that have been causing him trouble lately. I wish I could remember which personal finance mag I got this idea from [got it: May,09 ed. SmartMoney - "Buffett, Half Off" by Jack Hough], but either way it's genius. Especially while everything's so freaking LOW! We'll never be able to compete w/ Warren in getting the absolute *best* rates of going stocks, but while things are 1/2 off right now we can get damn close. In fact, I'd venture to say that now is the only time we can beat him if we pick up the same ones he did last year when they were much higher!
Okay, so now that you know what i'm up to over here, WHICH stocks do I plan on getting? Well, I've already picked up 3 of the 6 recommended by that same pf mag that I can't recall, and all 6 are owned by his Berkshire Hathaway company. In an effort to keep things simple for me, and not go TOO overboard, I've decided to invest $500 in each stock over time:
So far so good! Another way to "be like him" would be to just invest in one of his Berkshire funds, but considering one goes for $92,000+, and the other for $3,000+, I figured this is the better way to go ;) Again, mainly because how cheap they are at the moment.
And if you missed it, these new friends of mine will be living in my Brokerage Roth IRA. I'll continue to max out my 401(k) every year with a handful of diversified mutual funds and all, but this is my "play account". Even IF it's a bit excessive - I'd much rather spend my extra money investing & learning a bit over material stuff I don't need at all.
I don't recommend this game plan for everyone, but for me it's on like Donkey Kong!
Labels: investing, retirement, stock market, Warren Buffett
posted by J. Money at
12:47 PM
14 Comments:
I love that Burlington Northern Santa Fe. I was going to get it, but I didn't!
I'm with you... who needs more clothes and things you won't really use when you can get an education (sometimes from the school of hard knocks, which is worthwhile, too) doing some hands-on investing of your own money?
GGGREEEAT Post. I am always looking for sound investing advise.
I recently opened a brokerage Roth IRA as well as a general investing account. I am slowly learning and doing research, so I think you should def do more posts like this!
Niki
BRK A. has returned -.38% over the last 5 yrs though and just 21% over the last 10 yrs.
BRK B. even worse over 5 yrs and 23% over 10 yrs. But I'm sure the dividends paid out by these companies increase those returns, but still nothing too spectacular.
I think it was Smart Money magazine (May 2009) because I remember reading the same article and thinking that was a genius idea!
Hmm, I like the idea of following someone elses financial advice. Never really considered that as an option. Although, I am not a big fan of investing in individual stocks, I don't think I would mind throwing some spare investment change in to some stocks that mirrored Warren Buffet.
So far, my Mac & Cheese investment is treating me well, so I'm pleased to see it on your list as well.
@444 - Oh yeah, i've been reading about Burlington Northern for over a year now and so it was one of my top choices out of that list of 6 to get first ;) And yup, actually gonna try out my own picks as well here and there, but it certainly won't be any major parts of my portfolio. I've got GE & SIRI on the radar, which is awesome because they are completely opposite from each other.
@Niki - You got it girl, i shall continue throwing out some more of these posts in the future :)
@Denis M - 21% and 23% isn't spectacular? wow, you have to tell me what YOU'RE getting then! I wanna join! haha...if you take out all those financial stocks from Berkshire though, i bet those percentages go Wayyyyy higher. Which is why i like this idea of copying him w/out them. Although, Wells Fargo is supposed to be looking good - have to research it.
@Kerri Holden - YES! you were right. at home now and just found that issue - May, 2009 of SmartMoney by Jack Hough - "Buffett, Half Off" (although this online version is edited a bit). Thank you so much, it was driving my crazy ;)
@Punch Debt In The Face - I never really considered it either 'till I saw that article. Makes total sense though! And even better that it's not gotten me MORE excited about investing again and learning a new area of it (individual stocks vs mutual funds).
@Megan - SCORE! Can always bank on that mac n cheese.
Riding the windtail of someone ingenious. Perfect! I think you will definitely hit your goal of becoming a millionaire with ease, because you are persistant, willing to learn, and following suit of some great, great people.
In case you didn't notice, Buffet had a terrible 2008. He is no genius - he just has so much net worth that he can take risks that the rest of us cannot. Find yourself a nice index fund or two and just skip the "I'm smarter than the market" step.
@ ToughMoney...exactly...Buffet was as mortal as the average stockpicker in 2008, his "vision" wasn't showcased.
@ J.Money- 21% & 23% is good..but...thats over TEN YEARS.... IF I (24 yrs old) had invested using his picks the last 5 YEARS....I'd be in the red...BEFORE of all the fees you pay & taxes....not nice at all. Sure you can take out the financial holdings of his fund but those who trust him can't.
I'm not completely bashing him because obviously he is immensely successful but he does make mistakes that cost people lots of money. It just doesn't hurt his pocketbook as much as it would you or me.
At this rate you will be quitting your job in no time! I like how you are investing in moderation, its a good strategy in case things go bad. It is also good to acknowledge how Buffet did in 2008 like MR TML said. I echo his sentiments in finding yourself a nice index fund! We..... urrrr I mean Vanguard offers some great ones!
haha, well it's pretty obvious he knows what he's doing more than any of us. sure he's not perfect and will lose money, just like 99% of the rest of the world did in '08 (index funds included) but again it's a matter of trusting HIS stock picks over MY stock picks. there's just no comparison in that regard.
ToughMoney - I agree index funds are a safe & reliable way to go, but this new exercise of mine isn't to be safe or to be "smarter than the market" - it's to have fun playing with individual stocks using discretionary money. I leave the indexes & mutual funds for my retirement portfolio.
Aww yeahhh! big ups Vanguard ;)
Just make sure you also don't copy your diet after his stock picks:)!
BNI out of your six would be my favorite.
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