Legendary investor Warren Buffett doesn’t understand why more investors don’t imitate his value investing style.
“It's not about high IQ,” he recently told MBA students from the Richard Ivey School of Business, marketfolly.com reports.
“It just seems not to resonate with some people, and talking about it or showing them the performance/results won't help. They just don't feel good about it.”
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Buffett’s strategy at Berkshire Hathaway is to find established, well-run companies that are undervalued in the market place and hold on to them as long as possible.
Given his decades of outperforming the market, it does seem strange that more investors don’t mimic Buffett. Berkshire shares soared to almost a four-year high this past week.
“I am also puzzled by why value investing hasn't caught on,” Buffett said.
“I mean, what other type of investing is there? You want something other than value? But the thing is people just don't want to believe. They elect things that are emotionally satisfying.”
The people who don’t believe are looking for instant riches, Buffet noted. But “people who want to get rich quickly will not get rich at all.”
Ironically, Berkshire recently scored a 24 percent profit buying Intel stock and then selling it within a year.
That trade reflects an “old and more traditional” style of value investing that involves selling shares when they hit a specific target, Tom Russo of Gardner Russo & Gardner, told Bloomberg.
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