An Indian Civilizational Perspective

Even Buffett Copy Cats would have prospered in the last 30 years!

It is amazing how the Mutual Fund managers and others in the investment world dont even care about the one guy who has had the best track record in investing over the last 30 years. Well, one would say you need his intelligence to do what he did – right? Hmm Not quite if this study is to be believed. The study has taken “Reverse Engineering” – the Indian word for innovation – to a new level!

The study just considered the same stocks that Buffett bought, often months after the original had announced it. Just plain copy-catting! And to heck with the Efficient Market Hypothesis – which Buffett in any case doesn’t care two hoots about in his investing philosophy.

The result: 24.6% returns over the last 30 years! Such is the genius of this little Omahan investor who hits big!

Buying whatever billionaire Warren Buffett bought, often months after his share purchases, delivered twice the return of the Standard & Poor’s 500 Index during the past three decades.

Investors would have earned an annual return of 24.6 percent by buying the same stocks as Buffett after he disclosed his holdings in regulatory filings, sometimes four months later, according to a soon-to-be-released study by Gerald Martin of American University in Washington and John Puthenpurackal of the University of Nevada, Las Vegas. The S&P 500 rose 12.8 percent a year in the same period.

“A monkey would have beaten the pants off the S&P 500 by following Warren’s buying and selling,” said Mohnish Pabrai, who manages $600 million at Pabrai Investment Funds in Irvine, California. Pabrai and a friend paid $650,100 this year in an annual charity auction to lunch with the 77-year-old Buffett.

Source

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