Which Buffett Should You Copy?
The current approach of Berkshire Hathaway and Warren Buffett differs from his early days. Should that impact which advice you adhere to?
I came across an article on Substack this week discussing the different types of Warren Buffett's that have existed since he started his investing journey. Almost everyone I speak with talks about buying quality compounders and never selling. Pre Berkshire Buffet who was running the partnership would have laughed at many of these principles today as he bought businesses of questionable quality using price as the main determinant of investment merits and would sell stocks when the price warranted.
The reason I think this is important is one Buffett (the Buffett of today) should be more of a model for preserving/maintaining wealth already obtained, whereas partnership buffet is the way you actually create wealth that is worth maintaining if you know what you are doing. Buying quality compounders is an incredibly competitive game because of buffets success that has so many looking for these kinds of names and also, the only reason buffet owns these businesses is because the scale of his enterprise mandates it.
My point here is that before blindly doing what Buffet does or doesn't do, perhaps taking a step back and understanding why he might be operating the way he does will prove more useful to you investment goals. By no means do I think everyone should invest like partnership Buffett because most people do not know how to buy and own individual stocks the right way. Either they do not know what they are looking for or they emotionally can not deal with the turbulence of owning individual stocks.
Either way, assessing your own competence and skill set is vitally important to your investment journey and should individual stocks be more of a hobby for you than an enterprise used to build wealth then be honest about that and ensure the money you are investing is not going to make or break your retirement goals.
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