I don't see how I can make money with Buffet's philosophy?

Question

According to him, I should buy and hold for the long term like forever. In addition, I should have my dividends retained by the company to reinvest it, meaning no dividends for me. So if I were to buy Berkshires Hathaway expensive stocks which offer no dividends and suppose to hold onto it forever and not sell, how will I eat?

Answer 1

Go buy the book "Invest Like a Shark"

Excellent book that explains why you cannot invest like Warren Buffet.

Answer 2

That's a good question!! First of all, you only invest money you can afford to lose, and/or that you don't need for several years.

You don't have to reinvest your dividends, and not all brokers offer that option, But you should reinvest the dividends to get the "magic" of compounding interest. If you buy Berkshire Hathaway shares, then you let him keep the money to reinvest for you.

With the Buffet method, you're investing for your retirement or for your children. Unless you have a lot of money to invest, you probably won't be reaping the rewards for many years. The stock market is not the place to make a quick buck, especially using Buffet's method.

Answer 3

I'm not big on buffets investing ideas either. Remember he is one of the most frugal men on the planet, he just keeps all his money in the markets.

That can make sense the more you have to invest the more you can make.  I just believe you can make huge growth with your money and be a big spender at the same time.

Answer 4

Your right.

Warren Buffet bought stocks, and held them for years, he had more money than the average person and he could average down if the stock dropped.  He started with money, and used his money to for the buy and hold means of investing. This is not a practical investing policy in this modern age.

Buffet never had to compete with this many institutions, hedge funds or computerized trading & investing.

Buffet was and is a contrarian, he shunned stocks that are subject to the most talk among market players.

Follow his investment philosophy is not going to make you rich, and may not help your grandkids.  You tie up your money for years and hope it works out.

The man should be respected for the amount of wealth that he has accumulated, but there's no need to follow his investment philosophy with the idea that you are going to make it also.  Yes the man's an icon, but he's not a god nor should he be treated like one.

If you have a limited amount of capital, it would be foolish for you to buy Berkshire,  You would not get any leverage from the investment, - you'd invest big dollars buy not have many shares, so if the stock took off, you return would not be that great in comparison to the dollar amount invested.

Following Buffet or buying into his company is not going to make you a Buffet.  There are so many more other opportunities and philosphys in the market that would serve you better