It's a racing certainty that more people have lost money following the wisdom of the Sage of Omaha than following tips from any number of other so-called gurus. Of course, it's perfectly correct that virtually every pearl of wisdom dripping from the lips of the Chairman of Berkshire Hathaway is worth a thousand utterances from the plethora of mass market media mavens masquerading as psychic predictors of the unforeseeable. Unfortunately there are two sides to every equation and Buffett, hard though he tries, can only be on one of them.
The simplicity of Buffett's approach and his folksie wisdom belie a tough-minded and intensely focused individual whose career has been marked by a single minded determination to make money. Most people don't see this, though, what they see are the incredible gains that can be made by actively trading and draw the obvious, but mad, conclusion that what's good enough for the one person capable of defying the logic of markets is good enough for them. Following Warren Buffett without Warren Buffett's temperament is a one-way ticket to the poorhouse.
Clarity and Consistency
It's impossible to read Buffett's letters to Berkshire shareholders – or anything else he writes – without being struck by the clarity of thought and expression that he brings to a world mainly characterised by confusion and inconsistency. If you read most commentators over a long enough period of time you usually find that their opinions have shifted markedly without any public pronunciations, presumably on the grounds that they figure most people won't notice.
Mainly they don't, although mainly because they don't care.
Buffett's wonderful ability to communicate complex ideas, to explain how the ambiguity and uncertainty of markets can be managed and how to see the dead wood from the living trees is a shining example of how it's possible to talk intelligently about financial matters to people willing to expend a bit of effort to understand. "Effort after meaning" it's called, originating with a character called Frederick Bartlett who believed that memory is an active thing, something you create out of your own efforts to recall: his War of the Ghosts experiment is a story still worth retelling.
Unfortunately what this also means is that what is recalled is not always what the writer would like to be remembered; often the message…
From EVERYthing I've read, diversification starts to lose its benefits rapidly after 10 stocks?
