Magazine article The Spectator

Why I'll Never Be Warren Buffet

Magazine article The Spectator

Why I'll Never Be Warren Buffet

Article excerpt

I ought to be a natural Warren Buffett.

I've never had any difficulty doing the opposite of what everyone else is doing.

If there ever was anyone capable of being 'fearful when everyone else is greedy and greedy when everyone else is fearful', it's me. Why, then, is Warren Buffett worth tens of billions and I'm scratching to break even after years of investing?

It isn't that I haven't been on the lookout for what Buffett calls 'moments of maximum pessimism'. I have. I've been buying into them strongly. It's just that there have been so many moments of maximum pessimism that I've used up all the cash I put aside for investing this year.

So when it comes to the big one -- the one economic historians will eventually identify as the real moment of maximum pessimism -- I will have no money left. But Buffett will no doubt scoop up the shares I should have been buying, and make another fortune at the expense of suckers like me.

At the moment I feel less like Warren Buffett than like Little Miss Muffet. Here's how it all went wrong. It started well. Like Buffett himself, I eschewed the promise of instant fortunes from the dotcom boom.

The valuations of those companies are ridiculous, I told myself. Then I looked on with some pleasure as they went belly-up, taking fortunes and reputations with them: not least when the afflicted were those who had ribbed Buffett for ignoring technology stocks.

As markets sank, I set to creating my personal Berkshire Hathaway. Like Buffett, who started with the earnings from his paper round, I wasn't going to bet the family home. I was going to stick to my annual ISA allowance and a similar sum to be paid into my self-invested pension.

I wasn't going to borrow and buy a dozen buy-to-let flats up north. I wasn't going to invest in anything I didn't understand.

I was going to look out for companies which made real profits, rather than just a good spiel about making profits in the future. Moreover, I wanted companies which were going to share those profits with shareholders. So the likes of Ryanair, whose boss Michael O'Leary tried to make a virtue of not shelling a bean to his shareholders, could stuff it.

At last I thought the moment of maximum pessimism was staring us all in the face: 9/11. Unfortunately, however, I didn't have the stomach of Jo Moore -- the spin doctor who famously called it 'a good day to bury bad news'. In fact, it wasn't until February 2002 that I finally got round to putting my money down, by which time the market was well engaged in a suckers' rally. …

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