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Creating a Portfolio Like Warren Buffett: A High-Return Investment Strategy by Jeeva Ramaswamy

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CHAPTER 32

No Shortcut Approach

There is no shortcut approach for finding investment success. If you want to replicate at least 25 percent of Warren Buffett’s stock market success, you need to work hard and spend time identifying great companies at bargain prices. After making a purchase, think like a business owner to deal with market volatility and act accordingly.

When he started his partnership, Buffett read Moody’s manual page by page, twice. If you want to find bargain opportunities, you have to work hard; no one is just going to tell you about them. There are always bargain opportunities available to you. If you research 10 companies, you can find one. If you want to have 10 stocks in your portfolio, you need to research around 100 companies every year. In five years, you will know about 500 companies. When you know about 500 companies, you are a stock market guru; you do not need to listen to any market pundits on CNBC.

Here are the tasks you need to complete to improve your investment success.

1. Identify the stocks

2. Research the stocks

3. Calculate intrinsic value

4. Manage the portfolio

5. Monitor the company’s portfolio

6. Make sell decisions

Identify the Stocks

Chapter 25, Where to Search for Stock Prospects, gives you the details about where you can look to identify the stock characteristics such as Value Line, magicformulainvesting.com, the Wall Street Journal, and noted points like insider purchases, daily stock pops and drops, and magazine reading lists. ...

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