"Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that."
-- Warren Buffett
Size is the enemy of returns. Before Warren Buffett made his name building Berkshire Hathaway (NYSE: BRK-B), he built the foundation of his wealth by investing in "special opportunities" -- think misunderstood small- and micro-caps, turnarounds, and spinoffs. These opportunities flew under Wall Street's radar, allowing resourceful investors like Buffett the chance to bag extraordinary returns.
Special opportunities still exist today, but not for Buffett. He's too big.
Unable to nimbly move in and out of small positions, he's stuck plowing his cash into lumbering giants like Posco (NYSE: PKX), ExxonMobil (NYSE: XOM), Wal-Mart (NYSE: WMT), and ConocoPhillips (NYSE: COP).
They're great businesses, to be sure, but they're also covered by legions of Ivy League-trained sell-side analysts at megabanks like Goldman Sachs (NYSE: GS) and even research-heavy shops like Morningstar (Nasdaq: MORN).
This is where you have an incredible advantage over Buffett and other large asset managers -- because you can invest in illiquid special opportunities without disrupting the market. Even better, and despite a 24/7 financial news world, these are the same opportunities that are grossly underfollowed by Wall Street analysts. Lucky us.
Care to chat?
So, that's great. But how can small investors still find truly unique special opportunities in a 24/7 financial news world? How much risk is involved?
To answer your questions about these kinds of special opportunities, today we're offering you the opportunity to chat live with Fool special opportunities expert Tom Jacobs (TMFTomJacobs). From noon ET to 3 p.m. ET today, Tom and his Special Ops team will answer your questions -- in real time. Just click here to join the discussion.
You'll have the virtual podium to ask Tom about stocks, his process for choosing companies and strategies ... and any other questions you have about special opportunities investing.
A few ground rules to guide the discussion:
- Tom and the rest of the Special Ops team are not permitted to provide personalized investment advice.
- The Fool editorial staff will moderate the discussion to make sure it stays on track.
- Tom and his team may own stocks that are being discussed during the live chat. To see the stocks Tom owns, view Tom's profile page.
Tom (TMFTomJacobs) and his team will be responding to your questions in real-time from noon ET to 3 p.m. ET today, so come by!
And if you'd like to learn more about Motley Fool Special Ops, just enter your email address in the box below.
