- To know a small cap stock in detail and its business environment, you’ll have to invest more of your time than anyone else.
- Investing while following the 20-punch card rule is extremely difficult, even Buffett didn’t follow it.
In a 1999 Businessweek interview, Warren Buffett said the following:
“If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”
Most investors invest peanuts, Buffett’s measure for $1 million, so they should all be able to make 50% a year. As in life you mostly get what you ask for, why not ask for 50% yearly returns? You might get it.
In this article, we’ll discuss what Buffett meant when he said that, as well as a few strategies you could implement to reach 50% returns. More →