Here’s another frugal thing about BRKB — when you buy it you are essentially getting Warren Buffet as your financial advisor for free. It’s a stock so there is no admin fee like there would be for a mutual fund. And he, Munger and their team of people are still absolutely brilliant about finding value that grows.

I’m a proud owner of 2 shares of BRKB — as soon as I can I’m buying share no. 3.

It is not easy to execute, investing in individual stocks requires much more work than most people are willing to put in on a daily basis. If you will not or cannot put in an hour or two every single day you might as well not bother.

I have found that examining stocks in areas where I already have expertise makes the process much easier. For example, I bought Amgen many years ago because I noticed their products being administered to a certain type of patient. With my knowledge base as a nurse I determined what I thought the potential demand was. The numbers were astronomical and so it proved out. My (now ex)husband and his idiot broker poo poohed the idea. Going with your own specialized knowledge gives you a head start on the rest of the world.

You get uncompensated non-systematic risk when buying individual stocks. Why can’t the pros do it at least as well as you, thus driving the stock to a fair market value?

Berkshire is not too big. They are compensating by making larger bets. They have much more capital and can now hunt for elephants rather than chickens. Now they often buy entire companies rather than fractional shares. Yes everyone has access to simple screeners these days but that will never put you in a league with Buffett. Buffett has the experience and intelligence to pick up on hidden values and hidden dangers….which a stock screener cannot detect. Screeners should never be used to tell you what to buy and sell. They are merely idea generators. Buffett does not merely buy cheap stocks. Buffett values many intangiables than cannot be digested by numerical stock screens. Regarding Berkshire’s size….let me just suggest that it has been said for years that Exxon Mobil was too large to grow, yet they have continued to grow and produce record profits that are just off the charts. Also…Buffett will most likely retire and enact a succession plan long before his passing, so his demise should have little effect on the company…at least in the long run. Buffett has built Berkshire for the long haul. Many of these companies in their portfolio will continue to be cash machines long into the future….companies such as Geico, Dairy Queen, Fruit of the Loom, NetJets, Benjamin Moore Paints, Iscar, Coca-Cola, American Express, Mid American Energy, Nebraska Furniture Mart, General Re, The Pampered Chef, The Washington Post, Wells Fargo, etc etc. In 2007, Berkshire stock had it’s biggest gain in years and trounced the S&P 500. Buffetts task at succession will be to find someone who can allocate Berkshire’s excess capital at high returns. There are certainly some players out there that are up to the task. Buffett is as good at evaluating people as he is at evaluating businesses. He will find the right person to act as Berkshire’s chief investment officer when the time comes.

One of my wife’s co-workers used to by TVs and computers at Costco, and return them in a year to get an upgrade. He was taking advantage of Costco’s return policy. Recently, Costco changed their policy on these items – returns must be made in 90 days. In my mind this is steeling too.

To me drinking only water at a coffee shop (or restaurant) is not steeling. Sitting at a table all day, drinking water reading the paper, while paying customers are waiting for a seat may not be steeling, but it is rude. Abusing the system for excessive gain that costs businesses real money is steeling – from paying customers that will be forced to absorb these costs.

I would suggest reading William O’Neal’s books. Yes, the cover artwork seems cheesy and “scammy”, but the CANSLIM philosophy is something to definitely learn about if you are interested in individual stocks, as you say you are.

Some day when I have spare savings it would be fun to read this and subscribe to the Fool’s hidden gems newsletter to play the game little, but even if you’re betting on the best growth companies some of them will just have bad luck. Even assuming you’ll get the best may be a stretch. I’ll admit the possibility that a portfolio of investments in small growth companies could give you a good return, but getting the right portfolio is probably much harder than it sounds.

The last part of the book sounds suspicious too; it might have a little value as a way to demonstrate the important points in growth companies, but anyone can see which companies did well in the past. Trying to promote a strategy by saying you know which companies have done well in the past might be a sign that the only thing going for it is obvious and useless facts.

I would also look at the things he finds successful companies have in common with caution. What’s the success rate if you look at all companies with those attributes – including the ones that imploded years ago and were quickly forgotten?

I didn’t see anything in the review that explained how he made money following his own analysis and advise. He follows a bunch of sectors, but there’s no scorecard to let you know how he’s doing. So he is essentially acting like a Monday morning quarterback.

Based on his bio for ThinkEquity partners, he’s more of a teller on how to get rich than a doer at getting rich (in that he’s not necessarily getting rich by “Finding the Next Starbucks”). While there’s really nothing wrong with that, it does mean you need to look at his recommendations more as a guide based on past performance, rather than a method the author actually used to gain his wealth.

Investing in individual stocks is risky as compared to mutual funds as they are well diversified and the fund manager plays with the companies to invest in on a regular basis. But the returns are pathetic as compared to individual stocks.

My approach: Find a high growth sector e.g. energy , power, infrastructure etc. you would see daily reports of sectoral growths in magazines and newspaper. Make sure you understand that sector well. Now find the various companies operating in that particular sector or any IPO of such company.

Then find an undervalued company in that sector and then buy it. its 99% work/research and 1% trading. And you have a winner at your disposal.

@ The Financial Philosopher, I would say it’s not efficient because you lose control of your money where it’s invested, I not talking about funds here but the companies that you wanted to invest.

To be brief, the attempt of “beating the market” is futile, especially with large-cap stocks. “Finding the next Starbucks” implies digging into small-cap stocks, which is a more prudent pursuit but requires a great deal of time and energy. I suggest leveraging the wisdom of others by looking at a mutual fund company, such as Royce Funds, that specializes in small-cap stocks.

Why not let someone else find the next Starbucks and enjoy your life at the same time. Now that’s’ efficient!

Like you, I don’t have much money or inclination to invest in single stocks. However, I think it’s a great idea to familiarize yourself with investment concepts so when we are blessed with cash we know what to do with it.

As for the book, it sounds like the growth version of “Rule #1″ by Phil Town, which focuses more on Value Investing. Especially with the emphasis on homework, management, and product (Town calls it a “moat.”)