Like Coca-Cola Company (NYSE:KO), the Wells Fargo investment has treated Berkshire quite well.
Can you still invest like Buffett? Sure. Skip the fancy stuff. Buy great companies that are well managed and built for the long run.
Be intellectually flexible
One of the investing world’s biggest shocks of 2011 was Warren Buffett sinking $10 billion into IBM. Even as pundit jaws banged on the floor, Buffett revealed that it was a company whose annual report had literally been part of his reading list for five decades. As he put it:
I have been reading [IBM’s] annual report for more than 50 years, but it wasn’t until a Saturday in March last year that my thinking crystallized. As Thoreau said, “It’s not what you look at that matters, it’s what you see.”
The investment was such a surprise to everyone not named Warren Buffett because “Buffett doesn’t do technology.” Buffett has hinted in that direction (“we just stick with what we understand”), but the fact that he’s been reading IBM’s annual report for 50 years suggests that he keeps an open mind about what he’s willing to invest in.
Can you still invest like Buffett? Sure. Read a lot, don’t invest in what you don’t understand, but keep an open mind. And if something does click — even if it’s a company that was previously in the “too hard” pile — be willing to reconsider.
So… can you?
You’re not going to get double-digit, preferred-stock deals from Goldman Sachs. Nor are you going to find yourself on the right end of a savvily negotiated buyout that gives you a “heads I win, tails you lose” outcome. It’s also highly unlikely that you’re investing free money via insurance-company float (another big Berkshire benefit).
So you can’t do everything Buffett does.
But you can find great companies. You can look for conservative, shareholder-friendly management teams. And you can buy those companies and sit on them for decades. Sound easy? It’s not. But it’s definitely possible.
The article Yes, You Can Still Invest Like Warren Buffett originally appeared on Fool.com and is written by Matt Koppenheffer.
Matt Koppenheffer owns shares of Berkshire Hathaway. The Motley Fool recommends American Express, Berkshire Hathaway, Coca-Cola, Goldman Sachs, H.J. Heinz Company, and Wells Fargo. The Motley Fool owns shares of Berkshire Hathaway, General Electric, International Business (NYSE:IBM) Machines, and Wells Fargo.
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