You Would Be A Fool Not To Invest In Berkshire Hathaway

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Warren Buffet
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Berkshire Hathaway stock is legendary. If you thought Berkshire Hathaway shares were expensive 20 years ago, you would be bashing your head against the wall now because it has not just kept up with the overall appreciation of the Dow Jones Industrial Average, but it has actually beaten the index.

Led by legendary investor Warren Buffett, it should not be a surprise. Warren Buffett has an uncanny knack for identifying value. The great thing about Warren Buffett’s stock picks in terms of both public and private companies is that he is able to see value not just today, but 10 to 20 years in the future. Warren Buffett’s investing strategy is buy and hold. He does not play stocks based on momentum and does not get carried away by trends. He does not follow what is hot. Instead, he focuses on the fundamental value a particular company brings to a table. This is why it is a good idea if you have enough resources to veer away from buying mutual funds and buy Berkshire Hathaway stocks instead.

The only down side that I see is that Warren Buffett is not getting any younger. He is very old and his partner, Charlie Munger, is 91 years old. There is always the issue of mortality if you are going to be betting on a Berkshire Hathaway stock. However, considering its past track record and regardless of whether the US economy is up or it is down, Berkshire Hathaway is a solid play. Of course, all of these goes out the window if mortality issues appear.

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  1. As an alternative to Berkshire, here are some actionable investment principles that actually come recommended by Buffett.

    Benjamin Graham – also known as The Dean of Wall Street – was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Warren Buffett once wrote a detailed article explaining how Graham’s record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham’s principles are everlasting. The article is called “The Superinvestors of Graham-and-Doddsville”.

    Buffett describes Graham’s book – The Intelligent Investor – as “by far the best book about investing ever written” (in its preface).

    Graham’s first recommended strategy – for casual investors – was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks – Defensive, Enterprising and NCAV – and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various “special situations”.

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of experience, intuition and talent. Such stocks are not amenable to impartial algorithmic analysis, and require a case-specific approach.

    But Defensive, Enterprising and NCAV stocks can be reliably detected by today’s data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.

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