Data source: Calculations by author.
Follow Buffett’s example and lessons
It’s unlikely that any of us can beat Buffett’s long-term record, but if we start now, we may outperform him in the coming decade or two. A promising approach to take to do so is to follow his example — and the many lessons he’s freely shared with the public, in his annual letters to shareholders and in interviews.
Some of Buffett’s investing principles include staying within your circle of competence, thinking for yourself instead of following the crowd, and buying great companies at good (or better) prices, aiming to hold for many years, if not many decades. Putting such advice into practice means that we shouldn’t buy into biotechnology companies if we know nothing about biotechnology, that we shouldn’t buy stocks at any price just because we love the companies, and that we shouldn’t trade frequently, out of impatience or fickleness.
Invest with Buffett
Finally, another good strategy for those interested in following Warren Buffett and getting investing results like his is to simply let him (and his investing lieutenants) invest for you — by becoming a Berkshire Hathaway shareholder. Doing so means you’ll have a stake in his business, which encompasses scores of businesses that it owns outright (such as GEICO, Dairy Queen International, Benjamin Moore, and the entire BNSF railroad) along with large stock positions in companies such as Bank of America, Coca-Cola, and Apple. Berkshire isn’t likely to average 20% annual growth any more, but it is likely to keep growing over time, due to the many solid businesses it owns.
