There are so many people imitating the investment style of Warren Buffett.
Well, his method is great and his skill is also great. That is the fact.
But, in his interview with Fortune Magazine, he said that his method (that is the combination of Graham and Fisher) only works for huge amount of capital.
For investors with small capital, it is always better to stick into pure value investing as taught by Benjamin Graham.
But as he said in one of his annual letter, many will achieve better with low cost index fund, like Vanguard.
Especially since investing is hard, needs focus and dedication, just like mathematics, engineering, linguistic, computational theory or just about anything else.
Indeed, there is no easy path to make money in Wall Street or elsewhere.
Speaking about Graham method, many people think it relates with net-net only while Graham and Newman Corporation operated on various different areas:
- Arbitrage, that is the simultaneously purchase and sale of two related securities,
- Special situation like merger and acquisition,
- And of course net-net that is purchasing securities below their working capital (or book value for that matter),
Graham wrote about these various different operations in The Intelligent Investor.
And yes, Graham, more or less, wrote that investing is a business thus it must be thought and run so.
If we do not want to do investing as a serious full-time business, just stick to Vanguard.
Above, I mentioned several references, but I do forget the exact interview and the annual letter.
I will supply both of them later.