The Lemon Fool

Hello you very amazing and wonderful people that make up this forum. I sincerely hope you are doing well and keeping positive.

I was reading an article recently that mentioned that Warren Buffett can spend about 15 minutes before making a decision on whether to buy a stock. However i know he has years of experience and by doing due diligence for many years, he will know exactly what makes a good investment. I kindly wondered please when analysing a stock or company, how many hours generally does it take you to research a company before coming to a buying decision please? Whether thats reading sections of their annual accounts, doing research on competition for instance. If you kindly had any advice on this i would be forever grateful and thankful.

Sending you lots of good wishes as always and i very much hope you achieve all your financial goals through investing. Wishing you lots of good luck and take care.

"robertbanking" or...

(Just thinking aloud. Please ignore me...)


Later: OK. I'm convinced, robert.

Hope the Hypoglycaemia is under control.

robertbanking wrote:I was reading an article recently that mentioned that Warren Buffett can spend about 15 minutes before making a decision on whether to buy a stock.

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I suspect you're referring to Warren Buffet's intrinsic value calculation which compares the predicted long term return on a particular stock against the risk free return of a 10 year treasury. If, after making assumptions about future book value and dividend growth, the current sp is calculated to be lower than the sp which would match the return on the 10 year treasury, it may be worthy of investment, but it should be considered an initial screener to identify stocks worthy of a deeper dive. Warren Buffet is a buy and hold investor not a trader so it's unlikely that he would make long term investment decisions based on just 15 minutes of research.

Did not do him much good when he bought into Tesco at just the wrong time a few years back. Incidentally I read that he recently bought into Diageo. I hope that is not an omen.

Dod

Even Buffett gets it wrong plenty of the time, the diff is that he picks enough winners and holds them long enough for them to do the business and lifts the whole portfolio. Take out his 5 best performing stocks and his long term returns will look a lot more mediocre.

Personally it is rare that I will immediately invest in an individual company that hasn't been on my radar for a little while, I will tend to build up my position with regular new money purchases over months or even years. It's never a case of "oh, here's company X, let's go and do 5 hrs of research and then buy or don't buy it." It's more a case of "I'm familiar with this company and what it does, and how the stock has behaved in the past, what it's story is... the price is getting more and more interesting, let's refocus and try to construct a bad/normal/good outcome distribution from this point forward and see if the risk/reward makes sense."

Analysts spend lots of time researching but it doesn't seem to make them good investors.

Buffet is unusual that he has massive scale to back up his decision and often gets inside information on a company he might buy.

Most investors just buy a few shares not the whole company.

So for mere mortals it's better to be lucky or have a long time horizon to compound.

Dod101 wrote:Did not do him much good when he bought into Tesco at just the wrong time a few years back. Incidentally I read that he recently bought into Diageo. I hope that is not an omen.

Dod

His record in foreign stocks is decidedly mediocre. I believe he held GSK for some years, too. Saw sense to dump them which in hindsight was a good move.
Its always interesting watching the he Berkshire portfolio and the difference between what he says and what he actually does. If you just believe his rhetoric you's think that he just accumulates stocks and holds them for 10+ years, but the turnover in the portfolio is considerable, and he is as guilty as anyone of holding stock for just a few months then dumping it.

vand wrote:

Dod101 wrote:Did not do him much good when he bought into Tesco at just the wrong time a few years back. Incidentally I read that he recently bought into Diageo. I hope that is not an omen.

Dod

His record in foreign stocks is decidedly mediocre. I believe he held GSK for some years, too. Saw sense to dump them which in hindsight was a good move.
Its always interesting watching the he Berkshire portfolio and the difference between what he says and what he actually does. If you just believe his rhetoric you's think that he just accumulates stocks and holds them for 10+ years, but the turnover in the portfolio is considerable, and he is as guilty as anyone of holding stock for just a few months then dumping it.

You might be talking about Smith, "the UK's Buffet", so they say.

Home address - not the UK.