Warren Buffett is a living legend. Since he took over as manager of the investment company Berkshire Hathaway in 1965, the company’s shares have grown in value with a yearly average of 20%. With his investment decisions, he managed to accumulate a fortune of 74 billion USD, making him the second wealthiest person on the planet after Bill Gates. At the Annual General Meetings, the 86-year old financial prodigy is welcomed like a popstar by some 40.000 shareholders. These annual shareholders meetings in Buffet’s hometown, Omaha, have been dubbed by the press as the “Woodstock of Capitalism”.
So, the logical step for any investor would be to copy Buffet’s investment decisions and re-construct his success model in a smaller scale for themselves, right?
Sounds enticing, but it is practically impossible. For one, Warren Buffet is not a lone investor, but the owner of Berkshire Hathaway, an intermediary organ without which his refined business model would not have been possible in the first place. Berkshire Hathaway in turn invests surplus profits into participations, an area of finances where American lax regulations leave much freedom to investment companies. Because the sums involved are so immense, they allow for special conditions – which Warren Buffet negotiates for each deal separately. What is even more important, is that most of these holdings are not listed on the stock exchange, but result from targeted acquisitions of medium-sized companies. Often, these profits contribute significantly more to the overall profits than holdings in spectacular giants such as Coca-Cola or Kraft-Heinz.
Ultimately, the thought to copy someone else’s way would never have come across Warren Buffet’s mind. His individuality and his unique financial knowledge are what truly make up his secret to success. Whoever understands the importance and essence of these two factors and sets upon their own way, has already learnt the most important lesson.