Reblog: How to Build a Warren Buffett Portfolio


Warren Buffett is recognized as the greatest investor of all-time because of his discipline and conservative approach to investing.

Instead of focusing on the short term, Warren Buffett focuses on the long term.He also has a low appetite for risk, buying companies that active traders would find boring beyond all belief.

Buffett once described his investment style as, “I’m 85% Benjamin Graham.” (Benjamin Graham is known as the godfather of value investing. His book, The Intelligent Investor, is respected as a classic on Wall Street.)

Just look at Warren Buffett’s company Berkshire Hathaway’s (BRKA) stock price appreciation over the past 20 years. And yes, you are reading that correctly, the stock currently trades for over $260,000… per share.

Berkshire currently holds a market cap of approximately $430 billion, making Warren Buffett the third richest person on the planet.

Continue Reading


Reblog: The Stock Market Is Only As Smart As the Investors Who Comprise It


A Buy and Hold friend of mine recently posted the following words to the discussion thread for one of my blog entries: “You’re confusing high valuations (a fact, historically speaking) with overvaluations (a judgement that the market is wrong, in effect that you’re smarter than Wall Street).

I like the comment because it concisely and clearly reveals the primary difference between Buy and Hold believers and Valuation-Informed Indexers. It is absolutely correct to say that I believe that the market is wrong. That’s the entire idea of Valuation-Informed Indexing. We can know when the market is getting things wrong and how off the mark the market is and we should put that knowledge to good use by adjusting our stock allocations accordingly.

My Buy and Hold friend dismisses out of hand the possibility that the market has gotten things wrong. His comment suggests that the market is comprised largely of Wall Street experts who possess more knowledge about the value of stocks than I possess. So I should just give up this effort to outsmart the market.

Continue Reading