While Warren Buffett is often looked to for advice, and he does have a lot of knowledge to share, doing exactly what Buffett does is not always the answer— or even an option. Buffett shares great general knowledge, but as a billionaire his actions are just going to be different than yours. Keep that in mind while you are investing! You can follow Buffett’s advice while not doing exactly what he is, and to help put you at ease, here are 5 reasons you may not be able to invest like Buffett.
1) You have different goals than him.
Most new investors are thinking long term, like a retirement fund. At this point, I’d say Buffett is far past that. Now, Berkshire has to focus on something that will please shareholders quickly, but also be beneficial for the company in the long run. Berkshire’s investment methods are pretty complicated, and you won’t be running the same thought process when thinking about what stock to purchase.
2) He’s an American man, through and through.
Now, there is absolutely nothing wrong with betting on American companies, but Buffett pretty much ignores any company overseas, regardless of potential. That’s not to say he’s never made a purchase overseas— Buffett has some presence in Europe, namely holdings in insurance companies— which brings me to my next point.
3) There isn’t a lot of variety.
While Berkshire Hathaway is rather large and covers a range of industries, most of the company is made up by big names. Half of Berkshire’s value comes from Coca-Cola, Wells Fargo, Kraft, and IBM.
In Berkshire’s portfolio, about 40% is made up of consumer staple companies and an additional 30% is focused on financial companies. It’s not very diverse, which has worked out quite successfully for Berkshire, but you may want to add some more variety!
4) There is a serious lack of technology.
Plus, there isn’t a lot of technology in Berkshire’s portfolio— something you might have a knack for. The basis behind Buffett’s thought process is that he doesn’t want to invest in something he doesn’t understand, something outside his circle of competence, but don’t let that hinder you! Technology is a huge industry that has been one the rise for decades now, and there is a lot of potential there.
5) You just can’t!
Unless you’re a billionaire already, at some point you’ll probably run into something that Buffett could do that you simply cannot. You won’t be able to purchase in huge quantities, or take as many risks probably.
Not to mention, Buffett has access to things like preferred stalk that us normal folk don’t. Pair that with his insane amount of money, and you’ll realize it’s not possible to do exactly what he does. And, while that may be the case, you can definitely follow his simple advice and make sure you’re on the right track!