Buffett in a Box: No, No, No, No.

The guys at AQR, quants all of them, are a lot smarter than I am. So I’m glad this white paper of theirs about cloning Warren Buffett’s stock picking abilities is not necessarily becoming a fund or anything.  Because it screams Gimmick and doesn’t seem to be the sort of thing they’d want to really start marketing with a straight face.

Keep in mind:

a) Buffett’s best ideas and biggest winners have been in the insurance industry and corporations he’s bought outright, not in his common stock portfolio.

b) Buffett can already be bought at a zero percent management fee via shares of Berkshire A or B on the New York Stock Exchange.

But whatever, here’s Rachel Ensign writing at the WSJ:

Is it possible to copy Warren Buffett’s investment strategy and package it in a mutual fund?

The folks at AQR Capital Management LLC, a firm that runs 16 mutual funds, recently published a paper saying they had created a systematic process that picks stocks like Warren Buffett. The paper says that the process outperformed the returns of Mr. Buffett’s Berkshire Hathaway Inc. BRKB -0.13% (with the benefit of hindsight) from 1976 to 2011. The Greenwich, Conn., firm declined to comment on whether it plans to roll out a mutual fund based on its Buffett simulator.

In Britain, meanwhile, an investment company has created a fund that it says follows Mr. Buffett’s investing principles. The one-year-old fund’s manager, Keith Ashworth-Lord, is trying to figure Mr. Buffett out. “I’m the apprentice and he’s the sorcerer,” Mr. Ashworth-Lord says.

Don’t buy into a fund like this or attempt to start your own. Unless this sort of thing is a hobby of yours.

The British guy is hilarious.


Mind Games: Finance Pros Keep Trying To Get Inside Warren Buffett’s Head (WSJ)

hat tip Brendan Conway

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