Anybody who wants to know about Buffett's investment strategies should read 'Buffettology' and 'The New Buffettology' by Mary Buffett. It gives a detailed explanation of his research techniques and what he looks for in companies' financials and fundamentals. These books have been the most clear and precise of any books written on Buffett.
I think Buffet is very, very good at what he does - which to some extent is a matter of the things mentioned here (his ability to sit on the board, etc.) Moreover, Buffet got started in the 1950s-60s. In those days the DJIA was at 500-700 and today it's at 10,000. Buy and hold, dollar-cost average, reinvest dividends etc. worked fantastically well during his lifetime. It's just unclear how well it will work in the future, say for somebody who doesn't have many millions to invest and who plans to retire in 2020. However, most of the alternatives (like Average joe trying to pick stocks or swing trade his IRA) are far worse.
It's no coincidence money supply increased substantially after the second world war. Buffett certainly had some help regarding this. Money supply has not even contracted during the credit crunch. Instead because of bailouts this has more or less stagnated. In the depression the money supply severely contracted. Based on the unnatural expansion of money supply (of USD) I suspect when it finally contracts something major is gonna happen. This will probably not happen until 2030-2050.
Read his quotes. He seldom actually holds forever. Likely he sells from "less excelent" companies to buy "outsanding" companies. He never allows companies that MIGHT turn out to be bad. Sort of a gram of prevention if worth a ton of cure.
There may be something important missing here. Buffet is not your ordinary buy and hold investor. He buys and holds companies and that means he gains at least some control over those companies. That is a far cry from your average buy and hold investor. But there is another even more striking difference between typical mom and pop buy-and-hold investors and Buffet. I have read that Buffet hedges his holdings with options -- typically married puts or collars either on individual issues or on index futures to hedge a portfolio. We know that he is active in the options market, but the details of his specific strategies are not divulged. That is a far, far cry from your average buy and hold investor. I personally do not like index funds, but I agree with Buffet that the typical investor would be better off in them then in most mutual funds or in individual stocks. At least in an index fund, over time, you will stay even with inflation, even if you don't make very much money.
But, it is not going to contract! It is going to expand forever until the entire monetary system collapses on itself, or the Sun burns out, whichever event occurs first.
true whenever people say warren buffett, they should say his "fund" buffett started with 100k of pooled money for a buy and hold investor. Thats was alot akin to being a millionaire back then, before inflation. people just cannot copy him, they dont have the money, or the leverage, or the patience. warren buffet doesnt hedge (as far as i know) he goes super leveraged long by selling puts
It seems to be so.. but if you look closely.. there only seems to be a deterioriation of the situation. No improvement. the first rally was built on housing debt, the second on bailout debt. the next one on xxxx debt???? Sure, it may take 50 years but this IS a house of cards. Might I add I am very happy with the status quo, wouldn't want it otherwise. In the meantime trade and have fun like your life depnded on it!
Actually he enjoys his life that is what really matters. Some folks are into hookers and blow, big show, having a bunch of hanger ons and fake friends, big lifestyle etc.. other people enjoy life differently. I think he is doing well. Anyone who thinks otherwise is a foolish.