Can Warren Buffet's method be distilled into basic steps?
"Warren Buffet isn't using any special sauce. He looks for value and ignores hype, greed, and fear. He buys what he knows and looks for companies that generate cash and/or are available for a discount of their true value. He explains what he looks for in a company and his reasons for buying it. He has said on numerous occasions, ""I look for intrinsic value."" (So there's your formula.) Human nature is often  irrational and investing seems to bring out the fear and greed. I've always been a bit surprised when people ascribe some sort of sixth sense to Warren Buffet's success. He just works hard and doesn't deviate from a sound strategy. ""Be fearful when others are greedy and greedy when others are fearful."" And of course, rule one: ""Don't lose money."" It's not a joke. How many people buy high and sell low because of fear and greed? When the market tanks, buy more. Finally, anyone can invest with Buffet without all the work. Just buy a few shares of BRK.A or BRK.B."
While Warren Buffett is an amazing investor, he does have the benefit of having his working career start around mid-WW2 and ride the baby boomer phenomena afterward.  While there were bear blips in the past decades, there never really was much of a bear market outside the 70s energy crisis and inflation of the early 80s that nevertheless still could be leveraged for gains unlike the Great Depression.  The question really is, will the next generation be so lucky?  Idk, could be but I'm a doubter.  He's right in his criticism (I wouldn't bet my retirment on Bitcoin) but the same critique could apply to the US dollar in parts (which admittedly has the fundamental strength as being accepted for US taxes, but as a consequence also severe drawback in being tied to the economic welfare and trust in the US Government).  In the end, bitcoin and Warren Buffett are at fundamental odds.  Bitcoins is for, among other niches, Currency and Market pessimists (around the world btw and not just US-centric) and Warren Buffet is a product of his time and generally an US-centered optimist. The advice I have is short and sweet. Be an investor, not a speculator. Adopt the philosophy of Warren Buffet which is the 'buy and hold' philosophy. Avoid individual stocks and buy mutual funds or ETFs. Pick something that pays dividends and reinvest those dividends. Don't become a speculator, meaning avoid the 'buy low, sell high' philosophy.  EDIT:For some reason I cannot add a comment, so I am putting my response here.  @jad The 'buy low, sell high' approach makes money for the stock broker, not necessarily you. As we learn in the movie Trading Places, each buy or sell creates a commission for the broker. It is those commission expenses that eat away at your nestegg. Just don't sell. If a security is trading at $10 a share and pays $0.25 a share each quarter then you are getting 10% ROI if you buy that security (and if it continues to pay $0.25 a share each quarter). If the price goes up then the ROI for new buyers will go down, but your ROI will still be the same. You will continue to get 10% for as long as you hold that security. A mutual fund buys the individual stocks for you. The value of the fund is only calculated at the end of the day. An ETF is like a mutual fund but the value of the ETF is calculated moment by moment. By extending your logic both BNSF and GEICO would be nearly thhe same companies as both have majority ownership of warren buffet. How companies act IS defined by the theater of competition and regulation. Sears ca and US are two very different companies with no operational overlap (other than sears brand name) Have you read is letter? He's saying thanks to the government for basically saving the economy. Warren Buffet was from day 1 a strong supporter of the bailout program.   I'm sorry for my ignorance but what ''output'' are you talking about? As I understand you don't just want to establish a basic income but want to change the whole monetary system? And you can't even explain it? "There is actually a recent paper that attempted to decompose Buffett's outperformance. I've quoted the abstract below: ""Berkshire Hathaway has realized a Sharpe ratio of 0.76, higher than any other stock or mutual fund with a history of more than 30 years, and Berkshire has a significant alpha to traditional risk factors. However, we find that the alpha becomes insignificant when controlling for exposures to Betting-Against-Beta and Quality-Minus-Junk factors. Further, we estimate that Buffett’s leverage is about 1.6-to-1 on average. Buffett’s returns appear to be neither luck nor magic, but, rather, reward for the use of leverage combined with a focus on cheap, safe, quality stocks. Decomposing Berkshires’ portfolio into ownership in publicly traded stocks versus wholly-owned private companies, we find that the former performs the best, suggesting that Buffett’s returns are more due to stock selection than to his effect on management. These results have broad implications for market efficiency and the implementability of academic factors.""" I could be wrong, but I doubt that Bernie started out with any intention of defrauding anyone, really.  I suspect it began the first time he hit a quarter when his returns were lower than everyone else's, or at least not as high as he'd promised his investors they'd be, so he fudged the numbers and lied to get past the moment, thinking he'd just make up for it the next quarter.  Only that never happened, and so the lie carried forward and maybe grew as things didn't improve as he expected. It only turned into a ponzi because he wasn't as successful at investing as he was telling his investors he was, and telling the truth would have meant the probability that he would have lost most of his clients as they went elsewhere.  Bernie couldn't admit the truth, so he had to keep up the fiction by actually paying out returns that didn't exist, which required constantly finding new money to cover what he was paying out.  The source of that money turned out to be new investors who were lured in by people already investing with Bernie who told them how great he was as a financial wizard, and they had the checks to prove it. I think this got so far out of hand, and it gradually dragged more and more people in because such things turn into black holes, swallowing up everything that gets close. Had the 2008 financial crisis not hit then Bernie might still be at it.  The rapid downturns in the markets hit many of Bernie's investors with margin calls in other investments they held, so they requested redemptions from him to cover their calls, expecting that all of the money he'd convinced to leave with him really existed.  When he realized he couldn't meet the flood of redemptions, that was when he 'fessed up and the bubble burst. Could he have succeeded by simple investing in Berkshire?  Probably.  But then how many people say that in hindsight about them or Amazon or Google, or any number of other stocks that turned out similarly? (grin)  Taking people's money and parking it all in one stock doesn't make you a genius, and that's how Bernie wanted to be viewed.  To accomplish that, he needed to find the opportunities nobody else saw and be the one to get there first.  Unfortunately his personal crystal ball was wrong, and rather than taking his lumps by admitting it to his investors, his pride and ego led him down a path of deception that I'm sure he had every intention of making right if he could.  The problem was, that moment never came. Keep in mind one thing:  The $64 billion figure everyone cites isn't money that really existed in the first place.  That number is what Bernie claimed his fund was worth, and it is not the amount he actually defrauded people out of.  His actual cash intake was probably somewhere in the $20 billion range over that time.  Everything else beyond that was nothing more than the fictionalized returns he was claiming to get for his clients.  It's what they thought they had in the bank with him, rather than what was really there. There are strategies based on yields. Dogs of the Dow being a specific example while Miller Howard has a few studies around dividends that may be of use if you additional material. Selling off a portion of the holding can run into problems as how could one hold 10 shares, selling a non-zero whole number every year for over 20 years if the stock doesn't ever pay a dividend in additional shares or cash? "The most important thing is to start.  Don't waste months and years trying to figure out the ""optimal"" strategy or trying to read all the best books before you start.  Pick a solid, simple choice, like investing in your company sponsored 401(k), and do it today.   This I Will Teach You To Be Rich post on barriers has some good insight on this."