Here's the Greatest Advantage You Hold Over Warren Buffetthttp://www.fool.com/investing/general/2013/09/21/heres-the-biggest-advantage-you-hold-over-warren-b.aspx Steve Symington
September 21, 2013
Earlier this week, Warren Buffett raised some eyebrows by bluntly stating he's had a hard time finding good deals in the stock market of late.
Specifically, says the legendary investor:
Of course, Buffett's right: Stocks were undeniably cheap five years ago as the financial crisis took hold, and ultimately pulled the broader market down by more than 50%. As I pointed out recently, however, Buffett in early 2009 even went so far as to say he enjoyed the decline, as it gave him the opportunity make new investments and increase his existing positions.
But after his seemingly disparaging remarks this week, I suppose it's hard to blame worried investors for wanting to run for the hills.
After all, Buffett's stock-picking prowess has helped him to grow Berkshire Hathaway's (NYSE: BRK-B)(NYSE: BRK-A) book value by an amazing 631,415% since he took over as CEO in 1964. So, as the thinking goes, when arguably the greatest investor of all time is having trouble finding bargains in this market, why should anyone else even try?
You have an ace up your sleeve ...
You see, for all Buffett's knowledge, experience, and investing savvy, remember he explained in a July 5, 1999, Business Week report how small investors like you and I hold one significant advantage over deep-pocketed buyers like himself:
Buffett went on to elaborate:
Buffett was highlighting the fact his investment options are vastly more limited than our own, thanks to a combination of strict bylaws that govern what he can and can't invest in, along with the fact he needs to buy the stocks of much larger companies if he wants his investments to have a material affect on the now $288 billion behemoth that is Berkshire Hathaway.
The best part? At the time Buffett made those comments, here's what the S&P 500 had just done over the previous five years:
Look familiar? It should, because the S&P 500 as it stands has climbed nearly 180% in the nearly five years since hitting its lows in March 2009.
And while the folks at CNBC earlier this week didn't happen to ask Buffett what he'd be doing if he were a small retail investor today, something tells me he wouldn't hesitate to reiterate the aforementioned perks of not having to work with a capital base worth billions upon billions of dollars.
... so use it!
That's why I try to spend some time each month exploring some of my favorite beaten down small-cap stocks -- you know, the ones Buffett wishes he could buy -- to see if their r