There’s a cottage industry online devoted to convincing investors that if they possess the same information and stock ideas as the wealthiest managers, they too can someday join their ranks. Which is obviously bullshit given the delayed nature of said information, the unstoppable madness of investor behavior, the circumstances of each wealthy player’s initial success and on and on.
Personally, I find myself a lot more interested in the methodology and thinking behind the investment theses of the best and brightest managers rather than the picks themselves. This information allows me to challenge my own thinking and to understand why large pools of money are moving the way that they are. I devour 13F filings dutifully each quarter just like everyone else, even if I’m gleaning insights that are different from some other guy who is reading the same thing.
But no matter how one uses this stuff, it’s out there – and in ever larger quantities. And no investor’s moves attract more interest (and, therefore, productization) than those of Warren Buffett. The mere mention of his name is almost a guaranteed click, the fact that he’s made a move you may not have heard renders the possibility of your subscribing in this or that alert system that much more likely. Let’s be honest, if you were made to believe that Buffett’s secret new investment idea was hidden somewhere in your house, you’d probably pry up the floorboards in search of it. That’s just how it is.
My friend David Merkel, a value investor who’s studied the Ways of the Warren his entire career, has a list of reasons why Buffett, while admirable, is not a realistic role model for ordinary investors. It’s in two parts, I’ve linked to both of them below…