Billionaire investor Warren Buffett disclosing a handful of changes on his investment firm Berkshire Hathaway has got small investors asking whether it is a good idea to follow and copy his investments. During an interview on CNBC, Wealth Health LLC, Pat Powell, said it would not be the best of moves for individual investors to follow what the billionaire investor is doing in the market. The Coca-Cola Co (NYSE:KO) has been one of the major investments that has consistently turned out sour for Buffett even though he continues to hold huge stakes.
Recent regulatory filings show that Berkshire Hathaway exited investments in Exxon Mobil Corporation (NYSE:XOM) valued at $3.7 billion in the fourth quarter. Berkshire still maintains huge investments in The Coca-Cola Co (NYSE:KO) with a new addition in Charter Communications, Inc. (NASDAQ:CHTR).
“I think this may not turn out to be his most stellar investments as we look out a few years from now. One is uncertain as to when exactly he sold the energy stocks, but it says fourth-quarter. If he sold in December, he was finding a bottom. It so difficult for a large investor like Warren Buffett to dump billions of dollar worth of stock even of those large companies,” said Mrs. Powell.
Powell believes small investors enjoy an advantage unlike large investors as they can buy and sell small shares whenever they feel like. The ongoing investment strategy employed by Buffett is a bit scaring according to Powell, who affirms small investors should take a cautious approach when trying to copy him
Copying Buffett on investing for the long-term, on the other hand, remains ideal for small investors according to Powell. Buffett has remained a strong believer in The Coca-Cola Co (NYSE:KO) despite the beverage giant turning out to be a huge disappointment in the recent past.
“I think when you look at some of his holdings you might actually take a moment of pause and say what I he really doing. I look at things like The Coca-Cola Co (NYSE:KO), and this is a company that is really struggling to have revenue growth in fact it has been shrinking. [..] I look at a company like that and I think what a great 20th century company that was but is it the right investment for the 21st century,” said Mrs. Powell.
Powell advises retail investors to look at companies that are going to be long term holds for up to 10 years. Buffett has also on more than one occasion advised investors, not to focus their attention so much on buying individual stocks or copying him but instead buy an Index 500 fund.
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