There are many books published about the super investor Warren Buffett. I have read most of them. In one of the books the daily activities of Buffett are detailed. And they give you a good idea about his setup.
Essentially what Buffett does everyday morning is go to his office, pick up a Cherry Coke, picks up the newspaper and opens the list of stocks which had made 52 week low. He goes through the list to find stocks that have made 52 week low for the first time. Then for each of those stocks he looks in to data in S&P book , Value Line survey and other sources to see if it meets his value criteria. He calculates intrinsic value for each of those stocks.
He is looking for most value for least price. Rarely he finds what he is looking for. If he finds something of interest then he calls Charlie Munger and asks him to have a look at it. The day he finds a good idea he goes out and treats himself to Dairy Queen ice cream.
He has been doing the same thing for 60 years. And he beats the pants of guys who have analyst and Bloomberg machines and multiple monitors and quants and so on.
What is the secret . He has a setup and he focuses on it.
Setup selection is the key. The day you understand that 90% of your problems will be over.
See my earlier post on setup selection
1 comment:
Totally agree !!
Nicely put :)
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