“Warren Buffett is dangerous”.
Yes you heard right….Warren Buffett
is dangerous. After a decade researching and working with
investors who are successfully applying Buffett-like methods,
we have concluded that Warren Buffett is dangerous.
Let us explain.
We believe that Buffett is indeed a danger…
but only to the self-servicing section of investment industry.
The endangered list specifically includes:
Fund managers who have consistently failed
to deliver even average market returns;
Analysts who have mislead investors into
seeing value where none exists;
Greedy corporate management who have hidden
behind smoke and mirrors and the financial illiteracy
of their investors;
Financial media and tipsters who continue
to con investors into believing that sensible investing
is a “high-risk”, “stress-filled”
Of course, much of the investment industry
consists of conscientious individuals with a deep desire
to serve their clients. But so often their efforts have
been overshadowed by those who have put their own interests
first. And also by the industry itself that tries to promote
an elitist mystique.
Warren Buffett was the first to unequivocally
call out loud that “the Emperor has no clothes”.
In doing so, he pierced the “fog of lies” that
still surrounds investing.
Buffett, with his common-sense, no nonsense,
DIY candour, has opened up investing to those “mere
mortals” who are willing to think differently from
the crowd. Buffett has repeatedly stated that his simple
willingness to “think independently” is the
key to investment success.
In a talk at Columbia University in 1984,
Buffett discussed the influence of his mentor, Ben Graham
on himself and other phenomenally successful investors such
as Walter Schloss, Tom Knapp, Ed Anderson (founder of Tweedy
Brown Partners), Bill Ruane (Sequoia Fund), Stan Perlmeter
and Charlie Munger.
While each of these investors had been hugely
successful, there was virtually no duplication in their
The single thing that each had in common was
that they understood the difference between price and value.
They all looked for discrepancies between the two, but found
them in very different places.
Each investor thought independently and therefore
they did not need to hold the same stocks in order to achieve
great success. In fact, it is highly likely that if they
had attempted to imitate each other they would have failed
simply because they would have lacked the courage of their
Mindless imitation is often promoted as the
easy way to wealth, but financial freedom is the price that
investors pay for it!
The single biggest challenge facing the average
investor then is turning off the “noise” of
so-called “investment” experts and to start
trusting their own judgement.
And this is what makes Buffett so dangerous...he
is encouraging investors to do the unthinkable…to
break free of their chains…to learn the rules of the
game and play it to win….to think for themselves….to
shout out “the Emperor has no clothes”.
Investors are not just realising that this
investing stuff is easier than the pundits would have them
believe…they’re discovering that all this talk
about investing being “risky” is nothing more
than a lot of hot air!
What’s more, they’re also realising
that there is another wonderful side benefit that the average
investor has probably never banked on.
Conscious Investors (www.conscious-investor.com)
know that investing doesn’t just have to be profitable.
Believe it or not, investing can be about profit, passion
AND purpose. There is something inherently wonderful about
associating with companies that you admire and whose products
and services you enjoy.
This is why we have called our approach “Conscious
Investing”. It is all about forming a positive association
between the investor and the company being invested in.
What’s more, by investing in companies
that you understand and have some familiarity with, then
you become your own best judge of that company’s management.
You’ll notice changes such as the merchandise losing
its desirability or management feathering its own nest with
fancy offices long before they have any impact on the financial
statements. You’ll know when it is time to get out
well before any self-serving announcements by Wall Street.
In this brave new world of conscious investors…not
only will investors “try it at home”….many
of their best investment ideas may actually start at home.
An investors’ most profitable idea could in fact come
from something as simple and relaxing as a night in front
of the box! They may just see a product that they relate
too, and decide to find out who makes it and whether the
company stacks up as a potential investment. Does it have
a high return on equity, not too much debt, products and
services that stand out from their competitors, high returns
and a competent management with a long track record in the
Following this approach, people find investment
ideas everywhere they look (we certainly do). They’ll
stand out at when they furnish their homes…when they
buy that leisure cruiser they’ve had their eye on…when
they select a service provider for their business…and
so on. Investment opportunities and ideas are literally
all around. People just need to know what to look for. It
really is that simple and anyone who tries to say differently
– don’t listen (we don’t)!
Put frankly, when people realise just how
simple investing really can be they will also realise that
the entire investment industry is based upon one big con.
But it’s a con that investors are finally waking up
too (thanks in large measure to Warren Buffett). That con
says “investing is too risky” and “too
stressful” for the ordinary person to succeed.
The simple unavoidable truth is that people
are NEVER going to ever become successful investors (let
alone close to achieving sort of returns enjoyed by the
world’s best investor) unless they get started investing
using their own decision making!
Conscious Investing is a company that provides
tools and training to investors who want to become more
self-reliant in the marketplace. We put quality, unbiased
information in the reach of every investor, affordably.
As part of this we follow a Buffett-like strategy
(or as closely as is humanly possible).
What does this specifically mean? It means
that we teach the following general investment strategies:
First and foremost it is vital to view
shares as businesses.
Investors need to look at the products
and services of the company. Do they stand out from
those of their competitors? How confident are you that
they will continue to stand out?
Look for companies with management that
treats shareholders as partners. Management must also
have the ability to use equity and assets of the company
wisely with a high return on equity and not too much
Each business must offer clear growth
potential - not necessarily in the next six or twelve
months, but certainly over five and ten years.
Focus on a small number of businesses.
Only invest in businesses that you understand—and
that you either use or can recommend their products
Don’t waste effort on trying to
guess which way the market may move - or whether it
is at a high or a low.
Do not invest in a company unless we
are prepared to hold it for at least 5 years.
In making investment decisions, it is
important to use a “margin of safety’ in
Do not speculate on companies that may
become good businesses. Look for companies that are
already profitable. And while Conscious Investing draws
inspiration from Warren Buffett (to whom we owe a huge
debt of gratitude) we also offer investors a range of
proprietary tools that we believe will allow them to
outperform the market over time.
As you know, Buffett is not in the business
of teaching investors how to do what he does. While Buffett
is very generous with sharing his general principles it
is in the specifics (and in crunching the numbers in particular)
that he remains silent. And you can’t blame him; after
all, capital allocation is a competitive business and ideas
are valuable and subject to appropriation.
Our proprietary calculations which are not
only proven to work, they are simple to understand. Here
is a summary of some of the more significant calculations
and the benefits that they offer our clients through Conscious
STAEGR® – we use earnings and
sales stability calculations to allow us to forecast
earnings on quality companies with five times the accuracy
When valuing companies we do not rely
upon discounted cash flow (CDF) methodologies in our
investment approach as these are unstable and use impossible
inputs such as estimating cashflows and discount rates
out to infinity.
Instead of misleading DCF methods we
use proprietary calculations that allow us to answer
the question that is fundamental to all investments—what
return can I expect and with what degree of confidence?
We also use proprietary calculations
that allow us to calculate the target price for purchasing
quality companies at prices necessary to achieve superior
returns, not just in terms of vague statement as being
undervalued. Volatility turns from being something to
fear to something that enables quality companies to
be bought for profitable prices with confidence.
The Conscious Investor approach to investing
ensures successful investing as measured by financial returns.
But it also makes investing an enjoyable everyday activity.
Of course in the end the proof of the pudding
is in the eating. The proof of the Conscious Investor methods
is demonstrated by back testing using the roll back feature
of the software. It is also in the steady stream of testimonials
from investors of all levels of experience from professionals
to complete novices.
Typical is the recent comment by a subscriber
He wrote: "I have read through the material
three times and am so excited. I finally feel like I have
some confidence. I'm not nearly intimidated by financial
gobbledygook as I once was. My financial advisor suggested
some stocks for me and I did my research and replied back
that I didn't agree because the historical growth was too
unstable and their stability was below what I would consider
reasonable. It made me feel more in control.”
Other testimonials can be seen by clicking
In total, just as you do, we believe that
Warren Buffett is dangerous – but only to the self-serving
sector of the professional investment community.
Based on years of experience, thorough analytical
and common-sense testing and the testimonials of our subscribers
we believe that Conscious Investor builds on the ideas of
Warren Buffett and other investment greats to provide investors
of today with a sound, comprehensive approach to investing.
An approach that will give them the opportunity to create
financial security for themselves, their families and, for
the professionals, their clients. And, moreover, doing this
in a way that brings more peace of mind and enjoyment, rather
than the usual stress and compulsion.
John Price & Margaret Baldock
Conscious Investing P/L
To help you keep up with timely investment
news and information and with additions to the website,
you are invited to subscribe
to our Free Newsletter. Or view the Free Videos describing Conscious Investor.
Conscious Investing provides general advice
and information, not individually targeted personalised
advice. Advice from Conscious Investing does not take into
account any investor’s particular investment objectives,
financial situation and personal needs. Investors should
assess for themselves whether the advice is appropriate
to their individual investment objectives, financial situation
and particular needs before making any investment decision
on the basis of such general advice. Investors can make
their own assessment of the advice or seek the assistance
of a professional adviser.
Investing entails some degree of risk. Investors
should inform themselves of the risks involved before engaging
in any investment.
Conscious Investing endeavours to ensure accuracy
and reliability of the information provided but does not
accept any liability whatsoever, whether in tort or contract
or otherwise, for any loss or damage arising from the use
of Conscious Investing data and systems. Past performance
is not necessarily indicative of future results. Information
and advice provided here is not an offer to buy or sell
the full Disclaimer.