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Warren Buffett Investment Index | Investing Like Warren Buffett

If one were to invest $1900 with Warren Buffett 44 years ago when one was 25 years of age, at age 69 that amount would now stand at $7,053,000 - compounding at an annual rate of 20.3%. Although most of this outstanding performance are outside of his investment in stocks (instead through the core business of Berkshire Hathaway insurance business), it would be safe to say that he applies the same standards on stock picking. Instead of putting money with anyone whose long term track record is unproven, why not follow the foot steps of our legendary investment Oracle.

After going through the 2008 Annual Report of Berkshire Hathaway, we have selected all the stocks in Warren Buffett’s portfolio which have fallen below Buffett’s purchase price(and excluded stocks trading above what Buffett paid for). We then replicated Buffett’s portfolio with our virtual $40,000 in The Inflationist Challenge, buying each stock in equal proportion to the total portfolio value. We call this the Warren Buffett Investment Index (WBI), designed to track the performance of Buffett’s picks and to leverage on his investment talent. We have no doubt this basket of stocks will outperform the index over time - and since we paid less than what Buffett did, we should outperform Buffett himself! (zero analysis time and effort on our part, but maximal upside) Continue…

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