Friday, November 16, 2007

Study Produces Useful Information For People Who Are Idiots (BRK.A)

From DealBreaker:

A new study by Gerald Martin of American University and John Puthenpurackal of (wait for it) the University of Nevada, called “Imitation is the Sincerest Form of Flattery," has found that if you buy the same stocks as Warren Buffett, you will make a lot of money....MORE

Here's the Bloomberg story (I liked DealBreaker's headline better):

Buying What Buffett Buys on Filings Doubles S&P 500
nvestors would have earned an annual return of 24.6 percent by buying the same stocks as Buffett after he disclosed his holdings in regulatory filings, sometimes four months later, according to a soon-to-be-released study by Gerald Martin of American University in Washington and John Puthenpurackal of the University of Nevada, Las Vegas. The S&P 500 rose 12.8 percent a year in the same period.

``A monkey would have beaten the pants off the S&P 500 by following Warren's buying and selling,'' said Mohnish Pabrai, who manages $600 million at Pabrai Investment Funds in Irvine, California. Pabrai and a friend paid $650,100 this year in an annual charity auction to lunch with the 77-year-old Buffett....MORE