It's wrong to say that investors' only choice is to buy Berkshire Hathaway
Becoming a knowledgeable value investor is probably your best bet at achieving market-beating performance. After all, what's the likelihood that Buffett's successor can replicate his past genius, especially given Berkshire's current heft and the associated size penalty? And as my dueling partner Buz Livingston pointed out, with their annual expense ratios and other friction costs, the chances of finding great mutual funds are slim indeed.
I'll grant Buz that Berkshire under Buffett has been like Secretariat in 1973. Yet with the Buffett era approaching its twilight, there's a risk that this great thoroughbred may instead wind up the next Barbaro. Indeed, Buffett's own call for his successor mentioned the risk quite clearly: "A single, big mistake could wipe out a long string of successes. We therefore need someone genetically programmed to recognize and avoid serious risks, including those never before encountered."
Were Berkshire's shares clearly trading at the screaming bargain level that Buffett himself prefers in prospective purchases, I might be singing a different tune. Indeed, Buffett and/or his handpicked successor may well be the only two on my list of professional investors I'd trust with my own money. Until I have the chance to scoop up Berkshire's shares at the inexpensive level that Buz himself admits he missed, I'll happily adopt Buffett's value strategy on my own, instead.
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Fool contributor and Inside Value team member Chuck Saletta would be honored to have the opportunity to be considered for the chance to succeed the greatest investor of our era. At the time of publication, Chuck owned no Berkshire Hathaway shares, but did hold portions of several of the same companies that Berkshire partially owns. You can see his ownership positions here. The Fool has a disclosure policy.