Bank of America Corp (BAC), Goldman Sachs Group, Inc. (GS), American Express Company (AXP): 10 Reasons Buffett Is Buffett (and I’m Not)

Aside from various arbitrage positions he has profited from throughout his career, one of Buffett’s earliest departures from Graham’s approach involved an investment in American Express Company (NYSE:AXP). As Lowenstein explains: “American Express Company (NYSE:AXP) did not have a margin of safety in the Ben Graham sense of the word, and it is unthinkable that Graham would have invested in it. … But Buffett saw a type of asset that eluded Graham: the franchise value of American Express Company (NYSE:AXP)’s name.”

This same approach went on to inform Buffett’s stakes in both The Coca-Cola Company (NYSE:KO) and Wells Fargo & Co (NYSE:WFC) and is now commonly associated with his concept of a competitive moat. As he said in his 1989 letter to shareholders, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

The bottom line

It goes without saying that some of the things on this list, and particularly the combination, are unique and immutable to Warren Buffett. But at the same time, many of them can also be learned and mimicked by others to improve their own investment returns. As his longtime business partner Charlie Munger has said, “I do not think that tens of thousands of people can perform as well. But hundreds of thousands can perform quite well — materially better — than they otherwise would.”

The article 10 Reasons Buffett Is Buffett (and I’m Not) originally appeared on Fool.com and is written by John Maxfield.

John Maxfield owns shares of Bank of America. The Motley Fool recommends American Express, Bank of America, Berkshire Hathaway, Coca-Cola, Goldman Sachs, and Wells Fargo. The Motley Fool owns shares of Bank of America, Berkshire Hathaway, and Wells Fargo.

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