Who doesn’t want to invest like Warren Buffett? It’s easier than you think. You just have to follow these 7 easy steps:
1) Talk all sorts of smack about hedge funds but first spend the initial 10 years of your career running a hedge fund that charges 25% performance fees on top of 6% gains.
2) Amass enough capital (by charging massive fees) to buy multiple entire companies. Do it in a distressed debt/activist strategy, but later on spin it off as “value investing”.
3) Use your insurance arm (from the company you bought in a distressed debt play) as a massive cash flow machine in which you’re essentially a leveraged covered call option writing operation.
4) Tell the world that they should just buy index funds and then spend most of your time building a portfolio around individual equities.
5) Tell the world that fixed income is dangerous while maintaining billion dollar positions in bonds.
6) Constantly refer to derivatives as “time bombs” while maintaining billion dollar derivative positions.
7) Obtain a red phone to the US Treasury department so you can help them arrange a rescue plan that starts by rescuing your operation when it looks like the economy is collapsing.
See, it’s easy. Now go get started. You’re welcome.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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