Beyond the lower price, the big advantage of the Class B shares for investors is that they can give them to people without triggering the gift tax, which kicks in for gifts above $ 14,000 each year.
With any investment pool, the larger you get, the harder it is to produce outstanding results. Berkshire Hathaway is no different and Buffett addressed this issue in his shareholder letter:
As for Berkshire, our size precludes a brilliant result: Prospective returns fall as assets increase. Nonetheless, Berkshire ' s collection of good businesses, along with the company ' s impregnable financial strength and owner-oriented culture, should deliver decent results. We won ' t be satisfied with less.
The Warren Buffett way For the adventurous( or foolish), you can try your hand at investing in stocks like the master of value investing himself.
You don ' t have to go it alone. Plenty of stock screeners, such as those from the American Association of Individual Investors, Morningstar and ValueWalk, strive to identify stocks of companies with positive free cash flows, good returns on capital and strong competitive advantages( what Buffett calls " moats " as in a castle with a moat). Automated investing service Motif lets you buy a basket of Buffett-like stocks for less than $ 10 per trade.
To be sure, it is extremely difficult to generate a record anything close to what Buffett has done just by stock-picking. Public companies represent only a part of Berkshire Hathaway ' s portfolio holdings, while the rest come from private deals ordinary investors can ' t access.
Where most investors lose their way in following in Buffett ' s legendary footsteps is consistency. Even Buffett stumbles from time to time.
" The problem that most people would have investing like Buffett is the time frame. Many of his investments can take years to pan out, and the average investor doesn ' t have that sort of patience," said George Gagliardi, a CFP and founder of Coromandel Wealth Management in Lexington, Massachusetts.
" Remember the derogatory comments about Buffett during the Internet stock boom years? He went from a pariah in 1998 to a genius in 2003," Gagliardi said.
The key to Buffett ' s stock-picking success has been his ability to buy when others are fearful.
" Many companies, of course, will fall behind, and some will fail. Winnowing of that sort is a product of market dynamism. Moreover, the years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks. No one can tell you when these traumas will occur – not me, not Charlie [ Munger ], not economists, not the media," Buffett writes in his 2016 letter.
" During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy."