,
6 tweets,
1 min read
Read on Twitter
The media is wrong. Warren Buffett is not a value investor and he hasn't been for decades. He was in his early years when he was generating his largest returns, because he had a small capital base and he could afford higher turnover in his portfolio. /1
As he's gained more capital, he's understandably shifted his focus to growth-at-a-reasonable-price while emphasizing low turnover (ideally a holding period of forever). This isn't because it's a better option than value investing, it's because he doesn't really have a choice. /2
Managing a capital base of his size using a value investing philosophy with higher turnover would be very difficult, if not impossible. I'm positive I would shift my focus from value stocks to "forever holdings" if I was in his shoes too. /3
But because I'm not, I can embrace the superior investing option known as value investing. Pure value investing emphasizes buying stocks that are very cheap relative to underlying fundamentals and selling them as soon as that relationship breaks down. It's really that simple. /4
There are other things that I believe are important to pay attention to, such as the financial health of the business and the quality of their earnings, but value is the main driver of long-term satisfactory performance. /5
I believe it is the most rewarding form of investing that exists and I believe the small investor would be much better off embracing that philosophy over Warren's current philosophy of "buying wonderful businesses at fair prices." /6
