The Buffett Formula

5 Principles from the World’s Greatest Investor That Can Give You Spectacular Upside Potential AND a Strong Margin of Safety
(The following content is not a personal recommendation to buy any of the following companies as I am not taking your personal financial situation into account.)

What if the secret to becoming a successful investor was right in front of you? What if it wasn’t a secret at all? Rather a set of principles so simple, that the majority of people overlooked them. Instead believing that the secret to success must be much more complicated. 

In the next 3 minutes, I’m going to share with you:

  • The 5 Principles 
  • Some of the results they’ve produced 
  • And how you can start using them for yourself TODAY 

Let’s get to it…  

The 5 Principles

PRINCIPLE #1: Buy companies you understand.

PRINCIPLE #2: Buy companies that have superior competitive advantages and endure over time.

PRINCIPLE #3: Buy companies run by people you can trust and those people are experienced and competent.

PRINCIPLE #4: Make sure you are buying at a fair price or better still a heavily discounted price if you can get it. 

PRINCIPLE #5: Be patient and apply the right temperament.

The above principles have some further detail and instructions that need to be applied, but when you combine all 5 together and understand how the collective formula works, the margin of safety each investment provides and the upside potential is spectacular. 

As an investor I wanted to find a strategy that required the least amount of work, gave me the greatest upside potential with the least amount of stress. 

Buffett has compounded money at a rate of approximately 20% every year for the past 60 years building a net worth of over $150 billion dollars. 

I thought to myself, even if I just achieved 13% to 15% per year, my returns would dwarf those of a managed fund or anyone else I could give my money to. 

So I dedicated myself to watching and reading everything I could about the greatest investor of all time. I watched hundreds of hours of interviews he had given, classes he had taught and investment books he endorsed. 

My aim was to clone what he did. If I was even mildly successful then the likelihood was I’d do extremely well. 

I realised there was a simple underlying formula that was evident in all of his investments.

It wasn’t rocket science. In fact, although he’s arguably the greatest investor of all time, he’s open about his investment strategies, explains to people that his process is extremely simple… and spends most of his day doing very little. 

Here’s an example of just how effective it is:

In April 2020 I funded a new account with $500,000. 

I then went and bought shares in 16 companies. 

Now, 90% of the companies I bought shares in, are what I would class as household names. 

Each one meeting my simple Buffett Formula. 

I then eagerly sat and waited to see what happened. 

By March 2022 my initial $500,000 had grown into $1.2 million.  

That’s an incredible return given we had been living through a pandemic, extremely high inflation, and in early 2022 the Russian invasion of Ukraine (which has caused all sorts of geopolitical tensions and the price of oil soared). 

The bottom line is the portfolio had grown by over 100% because I bought:

  • The right companies 
  • At the right time (when their share prices were trading at sizable discounts) 

I now conservatively estimate that my $1.2 million at 15% per annum will compound over the next 20 years, to $23.6 million.  

And that’s without me adding $1 dollar more to it. 

Buffett’s greatest money spinners have been very simple companies to understand.

  • Coca Cola
  • American Express
  • Dairy Queen
  • See’s Candies
  • Duracell
  • Kraft Heinz
  • Bank of America

And in 2016 he bought Apple (which is now 40% of his entire $330 billion dollar portfolio)

Buffett tripled his money with his investment in Apple inside 6 years.

Buffett has made tens of billions of dollars from making simple assumptions about companies.

He put $600 million into Gillette in the late 80’s and when it was bought by Procter and Gamble in 2004 walked away with over $5 billion. He simply made the assumption that most men use Gillette and they don’t like to change their shaving habits much so he bought the shares at a fair price and then waited. 

He bought 400,000 million shares of Coca Cola in the early 90’s. He just figured that nobody was going to knock off Coke and its scale. And that their reach was going to endure over decades and would steadily increase its profits. Today he earns around $600 million every year in dividends from his investment in Coca Cola. He’s never sold a single share. 

So why doesn’t everyone use the Buffett Formula?

It’s a good question but I believe the answer lies in the fact that it’s too simple. Most people think there must be a better way. For some crazy reason they just can’t bring themselves to clone a strategy that has proven to work for over 60 years. 

The other big reason is that today we live in a world of instant gratification. Everyone wants things done quickly. But when it comes to making money, one of Buffett’s key items in the formula is the need for PATIENCE. 

He preaches the need to focus on WHAT will likely happen over time rather than WHEN. If you use the Buffett formula in the right order, the WHEN will take care of itself. 

A wonderful example of the need for patience was uncovered by a US firm called Fidelity. It ran a study to find out which of its customers made the most money. The top group of people who achieved the highest returns were those who were dead. And the second highest money earners were those investors who had forgotten about their accounts. In both cases the money was left to simply compound over time.

What to do now…

Arguably the most important thing to do is get started. For the power of the principles and compounding to work, you need to be investing. 

So, to help you get started using these principles, I’d like to invite you to attend a free live online training webinar I’m running. During this free training, you’ll discover possibly the easiest, most effective way to begin investing using these principles. 

Simply enter your details below to register for FREE… 

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