In April 2012 we published an issue of The View from Burgundy, titled “An Investment Lesson from Warren Buffett,” that examined the Oracle of Omaha’s investment philosophy to see what could be gleaned from his approach. It centred on how to buy like Buffett – to identify quality companies, buy at a discount to their intrinsic worth and hold them for the long term.
Many investors attempt to mimic this philosophy, but do not find themselves to be as successful as the Oracle himself. Our most recent issue of the View, titled “Stoicism and the Art of Portfolio Intervention,” explores why this is. Buffett’s approach may be simple, but sticking to your guns over time requires the discipline of a Stoic to block out the noise from the markets, media and industry experts – a difficult feat and the reason why investors frequently get blown off course along the way. To compound the situation, certain scenarios will arise that may warrant a portfolio intervention – a buy or a sell – and should not be ignored, even within the context of a buy-and-hold Buffett approach. Building on our April 2012 issue, we tackle this equally important aspect of the philosophy: how and when to intervene like Buffett.
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