Why You Can’t Invest Like Warren Buffett

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It would be great if all wealthy people followed a plan such as this. Wealthy people should help people in there own country. Set up either bank accounts, or safe investment accounts that can pay interest monthly. Say they deposit $250,000 at 6%, thats $15,000 a year in interest. The principle stays in the account. $1,000,000,000 would give 4000 people this money, $50,000,000,000 is good for 200,000 people, recipients should not be capable of borrowing money on this account. If you think this is a good idea, or some similiar idea, copy and paste it wherever you can to give messages to the wealthy Thank you very much for letting me put my 2 cents in.
ROBZCARZ

ROBZCARZ 3:03PM September 10, 2011

It would be relatively easy for investors to get the deal Buffett got - buy shares in Berkshire Hathaway Inc. Buffett eats his own cooking, something like 99% of his wealth is directly associated with the ownership of shares in Berkshire Hathaway. If you want what he has, you can own it proportionally for the same $12,000.
Incidently, three years ago, near the height of the crisis when the Goldman deal was done, Berkshire B shares were trading around $80. Today they trade for about $70, so investing with Buffett would result in a "loss" of $1,500. So you would have lost 50% more with the same deal Buffett took. Patience is a virtue. Knowing the difference between price and value, it would seem, is the difference between winning and losing. Buffett knows the difference, most of us do not.

David Atwood 5:12PM September 06, 2011

Is it legal what Buffet Does????

Joe Hire of IN 8:10PM September 01, 2011

Buffett losing capital from the shares isnt true.Also,there were warrants.So virtually Buffett lost almost nothing.Please people do your research before you write an article about this great a man.Remember what he said
Rule no.1 Never loose money,rule no.2 never forget rule no.2

Saha 5:18AM August 31, 2011

The author's basic point - that retail investors cant find deals similar to the ones that Buffet is negotiating - is correct.
That said, the article has some omissions or inaccuracies. These preferred stock securities that Buffet has invested in with financial companies (Bank of America, Goldman, and General Electric) are not convertible stock, so they dont participate in the upside in any upside in the share price nor do they have downside with the stock price.
In fact, contrary to the author's assertion, Buffet did not have a capital loss on the Goldman deal - his stock was ultimately redeemed earlier this year by Goldman at a premium to face value, per the terms of the redemption right. Even if Goldman hadnt excercised it's redemption right, it is not correct to assume a loss on the preferred just because the common has declined in value.
Each of the deals did come with some warrant coverage. The warrants are convertible into common and therefore do participate in common stock upside. This is the sweetener in these deals that Buffet was able to extract. (more so than the coupon, which in the case of BofA was less than what some outstanding preferreds of BofA are yielding currently).
The main reason Buffet is able to get these deals is his brand name - it's a vote of confidence for these troubled institutions in a time of turmoil when that endorsement can be quite valuable in forestalling a panic that can turn into a real destruction of business value.

SGC of WA 8:18PM August 30, 2011