One pro to emulate with this type of investment strategy is Warren E. Buffett, chairman of Berkshire Hathaway. In the company’s 2004 annual report, Buffett lists his acquisition criteria--among them, $75 million or more in pretax profits, consistent earnings power, good return on equity with a light debt load, management in place and “simple” (not too technological) businesses.
- Andrew T. Gillies
- Andrew T. Gillies is Director of Communications at the Center for Audit Quality, an affiliate of the American Institute of CPAs, in Washington, DC. Based in Washington since 2002, he has also worked in editorial and communications roles at the Investment Company Institute, the World Bank, Forbes, and Vault.com. His policy-themed writing has focused on aerospace and defense, energy and environment, transportation, and financial services.
Wednesday, January 18, 2006
Buy Like Buffett
Here’s an investing mind-set to adopt: think like a corporate acquirer. In other words, even if you’re only picking up a few shares, pretend you're buying the entire company. Such discipline forces you to contemplate important fundamental and conceptual items before pulling the trigger on a trade.