Friday 23 October 2009

Copying Ideas from Investment Gurus

Copying Ideas from Investment Gurus

People have asked me often for Investment Ideas, Tips, Suggested scrips, Multibaggers, the works.

I've always wondered about the effectiveness of research reports, tips, recommendations, etc.

The reason: Some work and some don't.

The reason for that: The time horizon, risk appetite, etc. is different for different individuals. And may not synchronise with that of the guy who makes the recommendation.

However, I found an interesting titbit in one of the articles that I read - You can indeed make lots of money by simply copying Warren Buffett blindly - well, almost! Provided, of course, you have the same kind of patience that the Oracle does. And the same kind of time horizon.

The information is very much in the public domain, and can be used effectively by almost any and every investor who cares to do so - No risk of insider trading, no great efforts involved in investment research, a typical lazy man's endeavour!

Do take a look at this gem:

 

Source:

Interview with Mohnish Pabrai by dnaindia.com

How much of Warren Buffett's success can be attributed to his investment prowess and how much to the fact that he is Warren Bufett?


Well the thing is you could have invested even after Buffett had invested and you could have made six times the money out of it.

In fact there are a couple of professors in Ohio, who studied any stock that Warren Buffett bought, AND found something amazing:

If you bought on the last day of the month, when it was public that he owned that stock, and you sold it after it was public that he had started selling it, you would have generated north of 20% annual rate of return.

My intuitive guess is that the same kind of "superior returns" must be feasible even by following "Indian Investment Gurus" like Rakesh Jhunjhunwala, for instance.

If any of you have additional data to corroborate or dispute the above hypothesis, do let me know!

Regards,

N


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