The investor legend as AI illustration (Photo: Freepik, Elements)
Everyone knows the investment legend Warren Buffett. Books, articles and documentation rightly fill its successful investment history. With his company Berkshire Hathaway He has achieved outstanding returns for decades. It is considered one of the most successful investors of all time worldwide. Be Value And his wisdom, such as “buy a company, not a share” or “be greedy when others are anxious, and are afraid when others are greedy”, generations have shaped investors.
But as impressive as the story of Warren Buffett may be: his strategy does not work to the same extent for individual investors. There are significantly more reasons not to act like Warren Buffett and Berkshire Hathaway than there are arguments for it.
Know-how and trust
Warren Buffett has a almost unsurpassed knowledge of companies, markets and business. This know-how is based on decades of experience in all market cycles. There is also a team of first -class analysts, access to exclusive tools and data as well as networks that are not accessible to individual investors.
Even if Buffett emphasizes that macrotrends are not decisive for his investment strategy, he can still classify them better than most others through his knowledge and resources. Individual investors, on the other hand, have to rely on limited sources of information and analyzes.
It may sound plausible to copy Warren Buffett’s investments. But even Buffett has repeatedly made wrong decisions in the past. For investors, it is crucial to develop deep trust and understanding in your own investments. This is the only way to keep calm in turbulent stock market times and, in the event of the declines of the course, to buy happily instead of selling in panic.
For example, Warren Buffett is strong in the financial sector because he sees his core competence here. However, it is rarely the case that private investors understand the banking industry as a warrble buffet can.
The supreme discipline: Value-Investing
Buffett’s famous value investing approach requires more than just recognizing undervalued stocks. This style requires patience, a clear analysis and the ability to keep in the long term, even if the market plays against you. But this is exactly where many individual investors fail. You tend to do so in so -called “Value traps” To get – companies that appear to be favorable, but actually have fundamental problems and keep falling in the course.
In the event of falling courses, many individual investors also lose nerves and sell – or worse – they continue to buy “cheap” shares, which in the end crystallize as a bad buy. Others jump from one hype to the next, which often symbolizes the opposite of Buffett’s principle of durability.
Warren Buffett’s value approach is complex and time-consuming. Individual investors who want to imitate buffets could invest in Berkshire Hathaway instead. In this way, it is invested in the trust of Berkshire instead of understanding the complexity of individual companies.
Market capitalization and volume
Berkshire Hathaway manages a portfolio of hundreds of billions. Buffett is significantly limited in his investment universe. He cannot invest in smaller companies with low market capitalization, since the purchase of the huge sums would move the courses too strongly.
He also has to significantly consider the sale of positions. It is not for nothing that he only sells Apple in homeopathic quantities. Also from other investments such as BYD, he was only able to part with numerous tranches.
As a single investor, there are countless advantages. There are no regulations in the selection of the shares or sector. It is possible to buy attractive minor values, and liquidation is basically possible at any time. The entire range of industries and countries is also available. As a single investor, opportunities can be perceived that are simply not possible and permitted for large investors like Warren Buffett.
Conclusion: your strengths as a single investor
Instead of trying to copy Warren Buffetts complex strategies to acquire cyclical companies such as oil producers or house construction giants, individual investors can invest in small but more promising companies in the long term. Smaller or more unknown companies offer more potential in the long term and do not have to take more risk. Quality, growth and value can be found particularly in low -capitalized companies.
If you still want to benefit from Buffett’s success, you can consider buying Berkshire Hathaway shares as a solution. In this way, buying a share can be benefited from the specialist knowledge of the great Warren Buffett and his team.
Disclaimer:
No investment advice. No call to buy or sell securities.