Melanie wrote:[Dod101 wrote:Let him and others do the account studying line by line,
You've lost me on this one, mate. He's not going come over and do my reading, and I'm not copying his portfolio (or anyone's without just buying their fund). Please elaborate.Dod101 wrote:unless of course you think you will be another Warren Buffet.
No! But to be brutally frank, whilst it's clear he's a shrewd/clever/whatever, he started out in the 50s, and has experienced many booms and busts. But in particular, he was around in the golden post WWII American "you've never had it so good" times and it still alive today! And compos mentis!
From the first quote what I meant was simply WB appears to love company accounts. I do not especially but understand enough to get by which is all I think the average reasonably competent investor needs. I think there are many other things to understand. As I said, try to read the market and where it is going. That gives you a context for picking shares. As to the shares themselves, it depends what your aim is. Things like debt ratios, free cash flow and the like are things that any good Finance Director will be watching constantly and if you pick the right company you don't have to do this yourself. I doubt that spending hours studying accounts will make any of us better investors.
So picking up on Mel's recommendation for a book, I concentrate on the 'softer' issues like culture, long termism, a conservative outlook, low debt. I like a family shareholding because that usually is a good indicator of these qualities.. If you find the right management you do not all the research yourself. In any case, most of the companies we are investing in are very well researched so why do it all again?
As for WB, yes he was around in the immediate postwar era but what he has said over the years remains as true today as it was then. I am pretty sure that if he were starting out today he would probably do just as well. And of course you have just said that his experience counts.
You must do what you feel best but I just think that you should get some experience, however dearly bought and that will teach you more than studying company accounts in great detail.
I could go on but that will do,
Dod