If I Could Only Buy One Buffett Pick, This Would Be It: VRSK

When Warren Buffett left college in 1951, he had $9,800. After 62 years of investment success, his net worth is now estimated at $53.5 billion. His wealth has increased by an average of 28.4% a year at a time when the price of the S&P 500 provided a total return of 7.1% a year.

In his career, Buffett has done well in both bull and bear markets by picking great stocks. Individual investors can turn to the annual report of Berkshire Hathaway (NYSE: BRK-A) to see exactly what Buffett is doing. Those reports include folksy wisdom from Buffett and a list of the stocks he owns. Buying and selling after Buffett initially reveals his positions would have beaten the S&P 500, according to a study done by two finance professors.

One problem with this approach is that Buffett owns a large number of stocks. In his most recent report, he noted large positions in 41 different companies and it would require a large amount of capital to own that many stocks. Another problem is that Buffett sometimes gets deals that are not available to individual traders. For example, when Buffett bought shares in Goldman Sachs (NYSE: GS) during the financial crisis, he received preferred shares with a 10% dividend yield that were not publicly traded.

There is also the question of whether the Oracle of Omaha is losing his touch after an incredible career of more than 60 years. Berkshire has underperformed the S&P 500 in three of the last four years.  (more)

Please bookmark us