Warren Buffett is up 50% in the past 5 years. Here’s how I’m going to copy him

Comparing your profit or loss with your friends can be both good and bad. Sometimes it can get you frustrated, especially if you underperform or miss out on a good buy. Other times it can highlight what is good or bad, or even what can be imitated from others! When it comes to legendary investor Warren Buffett, I think I can copy a lot from him to help improve my overall returns.

Strong long-term performance

When I mention Buffett is up 50% in the last five years, I am referring to his investment vehicle, his company. Berkshire Hathaway. The company includes all its investments in other stocks, so its stock price should reflect the performance of the stocks it owns.

Berkshire Hathaway’s stock has performed well since the start of 2018. Over the past year, the stock price has been average. But considering global stock markets are not doing well in 2022, this is not a bad result!

A mixed portfolio

Although Buffett has owned several stocks over the decades, he has also benefited from increasing holdings in the past few years that have helped improve the performance of staples. This diversification measure is the first point that I have copied him for many years.

In that case, they have been stuck with companies such as Coke and American Express for several decades. These fixed stocks provide them with consistent returns due to stable business operations. Sure, Coca-Cola won’t be a hot growth stock, but it has been a reliable performer despite past recessions.

At the same time, I try and add some interesting stocks that are hot at the moment. This should help me provide a means to solve common benchmarks, such as FTSE 100. Buffett did the same thing, something I note from the purchase Activision Blizzard sharing.

Trying to copy Warren Buffett in value hunting

Over the next five years, I will try to copy Buffett in his moves to pick up undervalued companies. A good example of this was in Q3 last year when the filing showed that they took $4.1bn in stock Taiwan Semiconductor. When I checked to buy at that time, the stock was down about 45% on the previous year.

Clearly, Buffett sees it as a good value buy, based on his calculations. It also comes at a time when the stock market is in a gloomy place. But despite the fall, his long-term view was (and still is) that the company is valuable.

I haven’t bought Taiwan Semiconductor stocks specifically, but I’m trying to follow this approach. It’s not easy because there are many stocks that have fallen since 2022, but not all of them are good buys. In some cases, the fall is corrected. I focus on selecting sectors (for example, health, property and finance) that I believe in, and then filter for specific stocks in those areas.

My goal is to check back in five years and hopefully match Buffett when he returns.