How to REALLY Trade Like Warren Buffett

Many investors are disciples of Berkshire Hathaway’s Warren Buffett. Buffett learned his craft from his mentor, Benjamin Graham, author of the legendary tomes "Security Analysis" and "Intelligent Investor". Graham stated the following in 1976, shortly before his death [to the Journal of Finance]:

"I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when [the bible of fundamental stock analysis, Graham and Dodd's Security Analysis] was first published; but the situation has changed. I doubt whether such extensive efforts will generate sufficiently superior selections to justify their cost."

Would the student be able to prove the teacher wrong? Buffet's Chairman’s Letter [2005] in the Berkshire Hathaway annual report indicates that the per-share book value of Berkshire Hathaway has increased at an average annual rate of 21.5% since 1965. Compared to an average of 10.3% for the S&P 500 total return including dividends, the outperformance is striking.