WWRR Vol.2.015

12/5/2018 Why You Would Not Have Invested With Warren Buffett — Behavioral Value Investor
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Before becoming Chairman and CEO of Berkshire Hathaway,
Warren Buffett built an amazing track record compounding
capital in a small partnership in the 1950s and 1960s.
Chances are you would not have invested with him: his
partnership did not appear conventional and he did not
invest conventionally.
Warren Buffet t ’s Part nership Did Not
Appear Convent ional
The Buffett Partnership did not have these typical aspects:
• He did not have a large staff. As a matter of fact, for
many years it was just him, and even in the
partnership’s later years he was still the only
investment decision-maker. Contrast that with today’s
“hedge-fund master of the universe” starter package of
two analysts, a CFO, and an executive assistant in the
high-rent business district.
• He did not offer high-touch personal service or spend
time and money on extensive entertaining of his clients
as is common among today’s financial advisors.
• His partnership’s fee structure, which was based on a
percentage of profits above a certain rate of return,
was different from most others at the time.
• He did not have a well-known brand, advertise widely
or do many of the other marketing-related things that
most of his competitors did.
• He was young, in his 30s, compared to his competitors
with gray hair that exuded experience.
Warren Buffet t Did Not Invest
Convent ionally
• Buffett invested in a small number of well-researched
investments, in contrast with the conventional wisdom
of wide diversification.
https://behavioralvalueinvestor.com/blog/2018/11/26/why-you-would-not-have-invested-with-warren-buffett 2/5