{"id":70317,"date":"2015-03-30T05:03:12","date_gmt":"2015-03-30T09:03:12","guid":{"rendered":"http:\/\/countingpips.com\/?p=70317"},"modified":"2015-03-30T07:25:41","modified_gmt":"2015-03-30T11:25:41","slug":"you-cant-invest-like-warren-buffett","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/03\/you-cant-invest-like-warren-buffett\/","title":{"rendered":"You Can\u2019t Invest Like Warren Buffett"},"content":{"rendered":"
March 30, 2015<\/div>
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By WallStreetDaily.com<\/span><\/a> \"Kraft-Heinz<\/p>\n

By Chris Worthington<\/a>, Editor-in-Chief of Income<\/em><\/p>\n

Warren Buffett has achieved an incredible compounded return of 19.4% per year since taking control of Berkshire Hathaway<\/strong> (BRK.B<\/a>) in 1964.<\/p>\n

So it\u2019s no surprise that most people want to mimic his success.<\/p>\n

Heck, if you do a Google<\/strong> (GOOGL<\/a>) search for \u201chow to invest like Warren Buffett,\u201d you\u2019ll receive about four million<\/em> results.<\/p>\n

But here\u2019s the thing: Each of those links represents a misguided perception that you or I can actually invest like Buffett<\/a>.<\/p>

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And the people who click the links are victims of this delusion.<\/p>\n

As the recent mega deal between H.J. Heinz and Kraft Foods Group<\/strong> (KRFT<\/a>) clearly shows, everyday investors have absolutely no chance of achieving success like Warren Buffett.<\/p>\n

Buffett Enters Another Multi-Billion-Dollar Deal<\/h2>\n

The Kraft-Heinz merger was announced on March 25 and is valued at about $49 billion, according to The Wall Street Journal<\/em>.<\/p>\n

Working with Brazilian private equity firm 3G Capital Partners, Buffett helped orchestrate a deal that will give Heinz shareholders a 51% stake in the new, combined firm. Kraft shareholders will have a 49% stake (in addition to receiving a $16.50-per-share special dividend).<\/p>\n

Previously, Buffett had worked with 3G to acquire Heinz for $23 billion in 2013. And even that smaller deal demonstrated how Buffett profits in ways not accessible to everyday investors. In acquiring Heinz, Buffett received a massive number of special preferred shares (in addition to the common stock) that paid a hefty 9% dividend. Last year alone, Berkshire raked in $720 million from these assets.<\/p>\n

Now, that dividend will go away with the merger. But Berkshire will own roughly a quarter of the new entity, which will be the fifth-largest food company in the entire world and the third largest in North America.<\/p>\n

This is obviously a far cry from buying Dividend Aristocrats and holding them for the long term. It\u2019s a nice idea, but it\u2019s simply not how Buffett makes the vast majority of his money.<\/p>\n\n\n\n
Editor\u2019s Note:<\/strong> Robert Williams just unveiled a brand-new advisory service backed by independent research from Harvard University. Forget the Dividend Aristocrats\u2026 the Newton\u2019s Code Formula has already triggered 44 profit events worth more than $38 billion. Over the next three months, you\u2019ll have eight opportunities to claim your share. There\u2019s only one catch \u2013 you must act immediately<\/a>.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Instead, he\u2019s become a unique conglomerate of activist investor, board member, and private equity dealmaker \u2013 and he wields enormous power as a result.<\/p>\n

Just look at Berkshire\u2019s mountainous cash pile (estimated to be around $65 billion), and you should get an idea of how different Buffett\u2019s investments are from yours and mine.<\/p>\n

Meanwhile, his transition to something more akin to Gordon Gekko (as Deutsche Bank recently pointed out<\/a>) has shone a light on the more ruthless outcomes of Warren Buffett\u2019s deals\u2026<\/p>\n

Not a Man of the People?<\/h2>\n

For many years, Buffett has managed to maintain a \u201cfolksy\u201d image \u2013 both in his speeches and meetings, as well as his widely read (and well-written) letter to shareholders. It makes him seem somehow relatable, despite being one of the richest people on the planet.<\/p>\n

But this once-polished image is beginning to look tarnished.<\/p>\n

Consider Berkshire\u2019s recent deal-making partner, 3G. The firm has a reputation as a ruthless cost-cutter, taking bloated companies and hacking away until it uncovers value for shareholders. Carlos Alberto Sicupira, one of the Brazilians at the head of 3G, has been quoted saying that \u201ccosts are like fingernails: You have to cut them constantly.\u201d<\/p>\n

In 2008, 3G helped orchestrate the Anheuser-Busch-InBev merger. Carlos Brito, CEO of Anheuser-Busch InBev<\/strong> (ABI.BR<\/a>), announced plans to slash $1.5 billion in just over three years, and that number was quickly upped to $2.25 billion.\u00a0Just as the United States was sinking into the Great Recession, thousands of workers lost their jobs. In the city of St. Louis alone, the number of A-B workers fell 15%, according to city government records uncovered by the St. Louis Post-Dispatch<\/em>.<\/p>\n

More recently, 11 of the top 12 managers at Heinz were replaced after 3G and Berkshire acquired the company. And since the deal was completed, 7,000 employees have been dismissed. It\u2019s not surprising, therefore, that many at Kraft are worried about potential layoffs and plant closings.<\/p>\n

Ultimately, Buffett is one of the financial elite. In his deals, shareholders and investment banks \u2013 not everyday people \u2013 are the winners. That\u2019s the real<\/em> secret to Buffett\u2019s track record.<\/p>\n

Still, it\u2019s easy to understand why so many people wish to mimic the most successful investor of the 20th<\/sup> century. Acquiring even a fraction of Buffett\u2019s wealth would secure financial independence for yourself and your family for many generations.<\/p>\n

But the truth is that none of us can invest like Warren Buffett. It\u2019s high time that we accept it.<\/p>\n

Luckily, it\u2019s still possible for the rest of us to invest successfully. It may not be easy, but with the right strategy \u2013 such as Alan Gula\u2019s Shockproof Investor<\/em><\/a>, a truly unique publication complete with a macro approach and a dynamic asset-allocation strategy \u2013 investors can navigate today\u2019s challenging environment and get closer to achieving financial independence.<\/p>\n

Good investing,<\/p>\n

Chris Worthington<\/p>\n

The post You Can\u2019t Invest Like Warren Buffett<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com By Chris Worthington, Editor-in-Chief of Income Warren Buffett has achieved an incredible compounded return of 19.4% per year since taking control of Berkshire Hathaway (BRK.B) in 1964. So it\u2019s no surprise that most people want to mimic his success. Heck, if you do a Google (GOOGL) search for \u201chow to invest like Warren […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-70317","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/70317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=70317"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/70317\/revisions"}],"predecessor-version":[{"id":70333,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/70317\/revisions\/70333"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=70317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=70317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=70317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}