How Warren Buffett made me poor

Warren Buffett made headlines the other week when he announced to invest $ 5 Billion into Goldman Sachs. Buffet’s company Berkshire Hathaway has also been seen increasing its stock positions in several companies.

Warren Buffett’s theme song right now might probably be “Oops I did it again.” As one investor advisor said, Warren Buffett has been “. . . waiting for this for 10 years” that is that he has been waiting for the stock market to go down to it’s lowest level so that he can buy wonderful companies at dirt cheap prices. By the way, it is a good thing that Warren Buffett, despite his being old has still not lost his hair otherwise he might be needing hairloss treatment which by the way can be found at www.hairlosspreventions.org

I have invested in the stock market since 2005. Since that time I was searching for a system I could follow in stock market investments. I was attending seminars, reading materials, but I still have not seen “The light.”

Finally last April 2008, I bought a book entitled Rule# 1 by Phil Town. The book opened my eyes to “Value investing.” Town quoted heavily from Warren Buffett. I read Rule #1 three times and started to apply it in my stock market investments. Although some people argue that Town’s investment strategy is not strictly Buffett but it is what they call as “momentum investing”, it cannot be denied that the foundation of Town’s strategy definitely belongs to the Graham-Dodesville-Fisher-Buffett school of thought.

Now I’ve decided to learn from the master himself. When I went to Manila last September I bought 5 Warren Buffett books. I’ve noticed that books on Warren Buffett are so scarce, so whenever I see one, I buy it immediately. I saw one in National bookstore, Mango Avenue Cebu so I bought it immediately. So far I have not seen any other books on Warren Buffett here in Cebu. Take note that Warren Buffett did not write a book, however numerous books were written by different authors on his investing styles.

I just finished my 4th Warren Buffett book and I will be consuming my 5th one. So far I have read “How to pick stocks like Warren Buffett” by Timothy Vicks, “The Tao of Warren Buffett” by Mary Buffett and David Clark and “Buffett, the making of an American Capitalist” by Roger Lowenstein. The last one I read was “Even Buffett isn’t perfect” by Vahan Janjigian. Before I will go through another Buffett book, I have decided to take a break on Buffett and read another financial management book. After that, I will be reading the other two Buffett books left. Those are “Essential Buffett – Timeless principles for the new economy” by Roger G. Hagstrom and “The essays of Warren Buffett – Lessons for investors and managers” by Lawrence A. Cunnigham. I plan to buy more books on Warren Buffett in the near future. You can say that I have just become a Warren Buffett fanatic.

I’ve followed his cue and I am buying stocks right now. My favorite Warren Buffet quote is “We must be fearful when everybody is greedy and we must be greedy when everyone else is fearful.” Rightly so! Since everybody is so fearful right now to invest in stocks, then as value investors we must be greedy to buy more and more!

Using his investing strategy, I found out that if I had invested in certain stocks in 1997 and sold them at their highest in 2007 it would yield 20 to 30 % return per annum. How much more if I held on to those stocks for the next 20 to 30 years?

I’ve crunched the numbers and hopefully the stocks I bought will give me a good return when I will retire. Using Warren Buffet’s investing strategies and techniques on investing I may not make me become the “Warren Buffett of the Philippines” but I believe it will make me become more investment savvy and allow me to retire at a young age.

By now, you must be very surprised why this post is entitled “How Warren Buffett made me poor.” Well, reading and following Warren Buffett really made me poor. I am now poor when it comes to financial and investments ignorance because I have become very rich when it comes to financial and investing knowledge :-) (You guess it right, the title is just a strategy to lure you into this post . . . Guerilla blogging hehehehee :-))

I sure hope I had more money to invest; unfortunately, my money for investment is also limited. Just like Warren Buffett, I won’t be giving any stock tips. However I will be posting several articles on value investing and perhaps do some book reviews. So subscribe to my full feeds now, never miss a posts and become poor like me :-)

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4 Responses to How Warren Buffett made me poor

  1. Tim says:

    My first serious advice on extra income was investing on stocks. But back then, I didn’t have the money and the expertise to do it. Then came online freelance and indeed I earned. I am still open to the idea of investing in stocks but maybe when I have earned a lot from blogging :)

  2. zen says:

    pagsure ha na atong new zealand dreeam

  3. SELaplana says:

    i’m still wondering how to invest in stock.

    I want to buy those mentioned books but I am already poor…

  4. zigfred says:

    Sel: Well it’s quite easy, but it takes a while to learn. But once you learn it, it comes easily. My advice is to read Rule number 1 first.

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