I have noticed lately that there are more and more people talking about “investing like Warren Buffett” or even “becoming the Oracle of Omaha”. While I believe it’s an excellent thing that people care about investing, I also came to the conclusion it is very difficult to implement an investment strategy that is equal to Warren Buffett’s. Why is it so difficult to invest like Warren Buffett?
Buffett is the child of an other time – and other factors
Firstly, I am quite sure that nobody of us can have the same thinking, especially not when creativity, opinions and own assessments are involved. Moreover, these opinions and evaluations depend largely on your socialisation, circumstances of life and many more factors. So applied to Warren Buffett, he grew up in a bygone age under totally different conditions, he made his first investments in a bygone age, he worked with people we all will never work with.
In my view there is no possibility to replicate his success in the exact same way – apart from buying Berkshire Hathaway stocks (depending on what the future brings for his business…and mine ;-)). So “investing like Warren Buffett” is more of a desire than a real option. I am deeply convinced that the next superinvestor will be different from Warren Buffett in many ways. He will be a product of an other time, other circumstances and will have, at least to some degree, a new formula for his success.
Additionally the Warren Buffett of today is not the Warren Buffett of the 1950s – and that is the reason he is so effective. You need to adapt, because Darwin’s laws are also relevant in finance. You can see that by the way on how his views evolved on airlines and IBM.
Still, Warren Buffett is the role model for the future
What does this mean for a private investor? Can you invest like Warren Buffett? Rather than trying to run after the Buffett formula, I think everybody should attempt to develop his own individual approach. So do I say, it makes sense to stop listening to Warren Buffett? No, absolutely not. His thoughts are of incredible value and they can influence your own strategy in a positive way. But whatever he says or doesn’t, it does not free you from using your own unique brain.