Well the headline has not much to do with the article. It attracts a lot attention though. Does it not?

I was amused when I started getting messages asking me to invest like RJ. In the 1980s I realized that I could not invest like RJ. If both of us did research and zeroed in on say Tata Power (then quoting at say Rs. 100 for a share with a FV of Rs. 100) I would buy say 50 shares, but right then RJ would do a leverage buy and buy 5000 shares. So to make money like RJ, in RJ’s style, you need GUTS like him. He had it even while he was still doing training for CA. I did not. I do not have it even now. I cannot leverage at all.

This article is not about RJ it is more about YOU. Should you seek value or growth? As an Investor is there something to learn from Soros or from Buffett?

On the one side is the ‘Growth’ investor willing to believe any story. A silky-tongued CEO’s painted unicorns & castles in the air (backed by amazing excel sheets), and our reckless investor’s itch to dance the proverbial rainbow. No price is too high, no management too sleazy, no risk too great, no worries for a lack of a track record to deter him from the boundless opportunity he now sees stretched out in front of him. He now inspired by Subramoney’s reading list even reads and re reads Phil Fisher’s Common Stocks and Uncommon Profits. Wow.

Now tell me how many of us have the skill and patience to implement those 15 laws of Phil? Here Morningstar has conveniently put it online http://news.morningstar.com/classroom2/course.asp?docId=145662&page=3&CN=COM. How many of us can read it, understand it, and have enough information to analyze and implement it? Gimme a break.

Meet an investor with a few good picks – multi baggers -and he tells you about how he picked stocks..etc. but it is pure humbug. He is telling you a story based on Survivorship Bias. Simple. All his mistakes – say Oriental Power Cable, ATV Petrochem, Shaan Interval, Patheja Forgings, Crest Animation – have been nicely buried. Ask him about one or 2 of his stocks and put it in excel sheet…and the yield will come to say 16% p.a. – tell him the index did 19% in that period – and he will be ashen. So we really do not know growth. We believe some idiotic merchant banker (idiotic investment banker) who had a target to meet (fill up the room in his bank), so we got invited. We kept it in a demat account for which we had lost the demat instruction slip….and the share grew. Story looks too boring.

So we now say..’I implemented Fisher’. My foot. Remember the day the market plunged 5% you were busy wondering what to sell. Today you read somewhere that ‘Black Monday was just a blip’.

I suspect most investors have never really benefited from their devotion to Buffett. Buffett Bhakts so to say. Ugh, sacrilege..!?

But really, why should they? Buffett’s is an investment genius – he GETs every scrap of information he lays his hands on, and simply waits for his team and his own inscrutable brain to spit out all the right answers. The deals that are available to him, are available ONLY TO HIM. I know one promoter who lent money to his company at a rate 2% higher than the bank. Yes the amount was huge – about Rs. 500 crores, but that deal was available only to him. He told me it is one of the best ways to suck out Rs. 10 crores without raising an eyelid. One of the bankers on the board did not understand what was happening – and he is a real big man. And yet we all seem to think we can emulate him in a few easy steps…all we have to do is read his book.

If you believe ’10 steps to invest like Buffett’ you should also buy a book like “10 steps to lift the Sanjivani mountain and carry it to Sri Lanka’. Even my granddaughter will not believe such stuff.