Is Warren Buffet's Investment Strategy Really Best For The Retail Investor?
Ok, ok, I know this sounds like sacrilege to the value investor, but just hear me out. It's no secret that Buffet's core strategy is value investing. He also touts he is more than willing to wait 5 years to harvest his investments.
What I often wonder, is how well would Buffet's strategy work if he had a much smaller base of assets to manage? The sheer size of Buffet's holdings means he cannot quickly enter and exit a position without greatly effecting its share price. The size of his portfolio also limits Berkshire to taking positions in very large companies.
As a fellow value investor, I believe the retail investor should follow Buffet's investing principles, but not shadow Berkshire Hathaway's investments. The retail value investor or small cap investment manager should be able to perform significantly better. Either one of them can theoretically enter and exit one value investment after the other at a faster rate, with a greater number of investment opportunities (Berkshire cannot meaningfully invest in a mid-cap or small-cap company) with out worrying about liquidity.
So while Buffet is in a class of his own... we should be able to do better. Comments??? *Smile*