And
where does all that leave the rest of us? Well,
perhaps not as bad off as one might think. For starters,
Buffett's straightforward methods for evaluating
companies are easy enough to ape—if not in
one's head, then with the help of a computer. "You
just press a button," mathematics professor
John Price explains of software [called Conscious
Investor] he designed to mimic Buffett's criteria
for sizing up companies, such as a high return on
equity, low levels of debt, and a strong probability
of earning at least 10 percent pretax returns. Price
readily admits that there are some things his program
can't do, like sizing up company management or persuading
a gun-shy investor to pull the trigger the day after
the market crashes. "But it gives you an extra
degree of confidence," he says, "to keep
you on the path and stop yourself from getting drawn
into the behavioral stuff."
|
|