Value Investors Tribe

Author: Robert G. Hangstrom

In the part 1 and part 2 of this book insights we understood the key temperamental difference which separates the superinvestors from the common investor as well as some of the checklist items necessary for focus investing. In this article we’d explore some of the warning signs and “must haves” to practice focus investing listed in Warren Buffett Portfolio by Robert Hagstrom.

• Stocks are Businesses- Until you’re absolutely ready to have this mindset shift wherein you naturally equate stocks with businesses, the focus investing is most likely not for you. It is a must have criteria to pursue stocks as part ownership of businesses.
• Read Read Read- Patiently and intensively studying the businesses as well as their competitors is another must have criteria. You should be able to answer the questions such as what differentiates your business from the competitors? How will your businesses do in advent of a rough period?
• Time is your friend- Warren Buffett recommends owing businesses forever in which you decide to invest. However, let’s not kid ourselves, we are no Warren Buffett. However longer the time horizons, better off you are. Robert Hangstrom recommends minimum time period of 5 years for investment.
• Greed is your enemy- Charlie Munger has famously said that three things will ruin you: leverage, lady and liquor. Not sure about the other two but leverage is clearly and most detrimental to your portfolio. It is recommended to not have any kinds of leverage while practicing focus investing.
• Temperament is your strength- Not identifying stocks, not doing complex modeling, not the countless theories published, not studying charts but temperament is the biggest strength that can help you outperform the rest and practice the focus investing successfully.  

This was the last section summarizing important concepts from Warren Buffett Portfolio. These series of blogs are just to share some of the important concepts from the book, we highly recommend reading the book for some more interesting insights and to sharpen your skills.

Disclaimer: The content in this blog is purely for educational purposes. We do not claim any copyright of the book Warren Buffett Portfolio, all rights reserved by the publisher and the author of the book