Here’s one of the secrets of Warren Buffett’s success and how you can have it too

first_imgHere’s one of the secrets of Warren Buffett’s success and how you can have it too Kevin Godbold | Sunday, 29th December, 2019 Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Kevin Godbold has no position in any share mentioned. The Motley Fool UK owns shares of and has recommended Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short January 2020 $220 calls on Berkshire Hathaway (B shares). Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Simply click below to discover how you can take advantage of this. Image source: Getty Images. See all posts by Kevin Godbold I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.center_img Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! US-based billionaire investor Warren Buffett is well known for buying shares linked to high-quality businesses and then holding them for the long term.In his 2018 report to the shareholders of Berkshire Hathaway – the conglomerate he controls — he refers to his shareholdings as “an assembly of companies that we partly own.”5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…And he owns them because, when equally weighted and averaged, they are earning around 20% annually on their net tangible equity capital, and doing so “without employing excessive levels of debt.” In for the long haulGreat businesses like that are hard to find, so Buffett won’t let the opinions of Wall Street analysts, the actions of the Federal Reserve, political developments, or forecasts by economists shake him out of the stocks. In other words, he ignores everyone and everything except what’s going on in the businesses he part-owns.He tries not to pay too much money for a stock and reckons that “over time, investment performance converges with business performance.” But he also thinks investing in businesses in America gives him a powerful tailwind.Astonishing returns from AmericaBuffett made his first investment in the stock market in 1942. But if he’d been able to put his money in an S&P 500 index tracker fund with no fees back then, and reinvested all the dividends along the way, he reckons he would have seen a gain of around 528,711% by January 2019. That kind of return would have turned a $200 investment into just over $1m.The S&P 500 has achieved an annualised return over the period of 11.8%, and I find it astonishing just how large a sum that can compound into over time. But if a 1% annual fee had been paid to fund managers and others along the way, reducing the annualised return to 10.8%, the final sum would have been around half, at $0.5m or so.Indeed, little differences in the annualised returns we compound make big differences to our eventual pot of money in the long run.How to get involvedMeanwhile, despite his share-picking prowess, Buffett reckons much of his investing success is down to what he calls ‘The American Tailwind’, athough he does acknowledge that other countries have bright prospects as well. And I reckon the UK is one of those dynamic countries worth a closer look.It’s easy to get involved in the stock markets of the world these days by investing in low-cost, passive index tracker funds, such as those following the fortunes of the S&P 500 or the FTSE 250, or many others. And if you choose the accumulation version of the tracker fund, the dividends will automatically be reinvested for you, giving you a shot at compounding the kinds of returns Buffett worked out the S&P 500 delivered over his investing lifetime. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. “This Stock Could Be Like Buying Amazon in 1997” Enter Your Email Addresslast_img