“Bring intensity to the game and start evaluating the business.” Warren Buffett
Warren indeed has a highly concentrated portfolio of stocks and advocates focus investing approach as he devoted his life to investing and spends all his day reading. But he never suggested that you should follow his example unless you are willing to put in the same amount of hard work. Warren claims he sits in his office all day and read five to six hours a day. That’s how knowledge works. It builds up, like compound interest. The keyword here is INTENSITY, which is persistence and grit in my own words. All of you can do it, but I guarantee not many of you will do it. The recipe is simple but not easy to follow. Be honest with yourself, do you enjoy reading 500-700 pages per annual reports for the last 5 years just for 1 company?
Understanding his thought process is easier than putting in the same amount of work.
The 2nd point that I want to bring out is, he only mentioned S&P500 in low costs Vanguard funds, the reason being it is near impossible for 500 companies to go kaput at one time, which leads to some people buying STI30 ETF. Maslow's hammer, popularly phrased as "if all you have is a hammer, everything looks like a nail"
Until next time,