Let me start by quoting two of my favorite investing gurus:
"I have come to the realization that I will never own shares in Berkshire."
-- Longtime Fool Rick Munarriz, last Friday
"You may have something better to do with your money than buy Berkshire. [...] Anyone who expects us to come close to replicating the past should sell their stock. It's not gonna happen."
-- Longtime investing genius Warren Buffett, last Saturday
Great minds do think alike, right? The point is, Berkshire Hathaway
Speaking at this year's shareholders' meeting on Saturday, Buffett said that he "would be very happy if we earned 10%, pre-tax" on recent investments like Berkshire's portion of the Wrigley
Buffett made his fortune -- and Berkshire's -- through big bets on small companies, before they hit the big time. If you know what you're doing in the small-cap arena, the risk-and-reward equation can far outstrip anything you'll see in grown-up businesses like Kraft or Burlington Northern. But Berkshire itself has grown far too big to reap any great rewards from the small-stock strategy anymore.
Any investment big enough to move Berkshire's needle is also big enough to rule out open-market buys of small-cap stocks. If Buffett wanted a $500 million holding in chip designer Sigma Designs
If the top investors at Berkshire, like Buffett and Charlie Munger, had all the time in the world, they could still put in the legwork to invest in dozens or hundreds of the best Lilliputians on the market, but investment research in the Buffett mold takes time. When somebody invents a time machine or instant cloning devices, you might see that kind of strategy, but until then, Berkshire is unlikely to even invest in the makers of those gadgets.
But you can still get rich from the investing strategy Buffett outgrew. Even if you have a hefty $100,000 to invest in a single stock, that would be less than 0.2% of Sigma's market cap, or less than 0.1% of tiny-cap fiber-optics expert Infinera
Both Infinera and Sigma Designs are official Motley Fool Rule Breakers recommendations. That newsletter service has lots of promising ideas that are too small-time for Berkshire to bother with but just right for an individual investor. Grab a free 30-day trial pass right now to see the market-beaters you've been missing and that Buffett can't touch.
Sigma Designs and Infinera are Motley Fool Rule Breakers recommendations. Kraft Foods is a current Motley Fool Income Investor recommendation, and Wrigley is a former recommendation. Berkshire is a Motley Fool Stock Advisor and Motley Fool Inside Value selection. The Fool owns stock in Infinera and Berkshire. Try any of our Foolish newsletter services free for 30 days.
Fool contributor Anders Bylund holds no position in any of the companies discussed here, and he probably won't ever own Berkshire, either. You can check out Anders' holdings if you like, and Foolish disclosure is an equal-opportunity policy.