Published on January 26th, 2015
Warren Buffett is arguably the greatest investor of the modern era. He has grown his fortune to over $60 billion. Unlike other multi-billionaires, Warren Buffett amassed his wealth through a career full of successful investments, rather than founding one massive corporation. Several resources to better understand Warren Buffett’s investment techniques are included below. All resources mentioned can be obtained free.
Resource 1 – Warren Buffett’s Own Portfolio
The first tool you can use to invest like Warren Buffett is his own portfolio. Warren Buffett (and other investors) are required by law to file their stock holdings each quarter. These stock holding reports are called 13F filings. There are several websites that track Warren Buffett’s portfolio based on his most recent 13F Filing. You can view Warren Buffett’s current portfolio at this link.
Warren Buffett’s Top 7 holdings, which make up about 75% of his portfolio, are listed below:
- Wells Fargo (WFC)
- Coca-Cola (KO)
- IBM (IBM)
- American Express (AXP)
- Wal-Mart (WMT)
- Procter & Gamble (PG)
- ExxonMobil (XOM)
All 7 of Warren Buffett’s Top holdings are dividend growth stocks. Each of them has a long track record of raising their dividend payments year after year. Four of his Top 7 are Dividend Aristocrats; stocks that have increased their dividend payments for 25 or more consecutive years (These 4 are KO, WMT, PG, and XOM). When the richest investor of our time invests his wealth in dividend growth stocks, I take notice. See Warren Buffett’s dividend growth portfolio analyzed at this link.
Resource 2 – Warren Buffett’s Shareholder Letters
Warren Buffett has never written a book. Instead, he has shared his thoughts on investing through his annual letters to shareholders. Warren Buffett ran an investment partnership from 1956 to 1970 before growing Berkshire Hathaway to a $360+ billion dollar corporation. You can download his investment partnership letters from 1957 to 1970 at the link below:
Warren Buffett’s Investment Partnership Letters
Source: Market Folly
Warren Buffett did not publish his shareholder letters from Berkshire Hathaway from 1969 through 1976. Fortunately, they can be found at the link below (with the exception of the 1970 newsletter).
Warren Buffett’s Berkshire Hathaway Letters from 1969 to 1976
Source: Warren Buffett Resource
Finally, you can read all of Warren Buffett’s letters to shareholders from 1977 to the present on the Berkshire Hathaway website. The link is below:
Warren Buffett’s Berkshire Hathaway Letters from 1977 to Present
Source: Berkshire Hathaway Investor Relations
Reading Warren Buffett’s letters to shareholders shows how the greatest investor of our time thinks. His investing style has changed over time as his wealth has grown. Reading through Warren Buffett’s letters to shareholders and investors provides valuable investing insights that cannot be obtained elsewhere.
Resource 3 – Value Line
Value Line is a stock information service that provides 15+ year snapshots of publicly traded stocks. Each one page report shows relevant per share numbers like earnings per share, revenue per share and dividends per share over a 15+ year period. In addition, average P/E ratio by year is calculated and a brief summary of each stock’s operations and prospects is included as well.
Warren Buffett has this to say about Value Line:
“I don’t know of any other system that’s as good… The snapshot it presents is an enormously efficient way for us to garner information about various businesses… I have yet to see a better way, including fooling around on the internet, that gives me the information as quickly.”
Unfortunately, Value Line is expensive. A 1 year subscription costs $598. The good news is, there is a legal work-around to get Value Line for free.
To get Value Line for free, you must access it through your library. Most public libraries in the US have an online subscription to Value Line. The best part is, you don’t have to actually go in to use Value Line. You can log in to Value Line through your library’s online portal from the comfort of your own home. Call your local public library for specific instructions on how to access Value Line remotely, as each will differ slightly.
If you don’t want to go through the trouble of calling your local library, you can get access to Value Line Reports of all 30 corporations in the Dow Jones Industrial Average at this link.
Resource 4 – Annual Reports
“In terms of marketable securities or new offerings, we’ve never bought anything that’s been pitched to us by an investment banker or broker. We read hundreds and hundreds of annual reports every year.”
– Warren Buffett
Reading annual reports is important. It gives you first hand information of how a company is doing and what the strategy management is pursuing. Some businesses have fantastic annual reports that are very interesting and well written. Amazon (AMZN) and Nike (NKE) in particular come to mind as having interesting annual reports.
To find a company’s annual report, you need to find the company’s investor relations center. The quickest way to find a company’s investor relations center is to use a search engine. Do a search for “company name investor relations “. Replace company name with the name of the actual company you are search, and do not use quotation marks. When you find the company’s investor relations center, look for either ‘Annual Reports’ or ‘Financial Reports’ or a similar heading to find where the company keeps its current and historical annual reports. Annual reports are available for free for all corporations listed on the major public exchanges.