Apparently, we know Warren Buffett learned his trade from Benjamin Graham & develop his own investing methodology at the later stage. Many years back, he was the number one to name as the top money manager during his time.
By any measure, trying to beat Buffett represents a very high hurdle. However, Buffett did stumbled badly a couple of times.
Especially the painful years for 2007 and 2008, a lot of people are pessimistic and anticipate the stock market will be even worse than the great depression. But the US stock market turned sharply upward gaining more than 25 percent for the year breaking the previous new high. And Buffett Berkshire Hathaway rose only 2.7 percent during this raging bull market.
But, Buffett approach is to take big bet instead going for wide diversification. And his portfolio is heavily weighted to insurance and financial companies, some publicly owned and some privately owned.
No doubts, at times Buffett stock picking prowess is very successful with the financial media making him a hero & whatever stock he bought, it will definitely rise in prices. Trying to mirror him to take big bet with a focus concentrated portfolio entails more risks.
Nonetheless, we know the past does not indicate the future. But in the 10 years from 2001 to 2010, a portfolio of passively managed value funds averaged annual returns of 11.8 percent, more than twice the 5.4 percent return of Berkshire Hathaway stock.
Even, Buffet he advocate to buy the index funds & able to beat almost 90% of the fund managers seeking active return using the alpha approach.
In fact, some of the fund managers did purchase Index funds for their own personal portfolio instead investing in their own fund.
So, if you wish to beat Buffett over the long term, put your money and own a portfolio of low cost value funds that included global exposure to large cap, mid cap and small cap stocks.
Because, over the long term, it is almost impossible for anyone to consistently beating the indexes. Except for some few exceptional one. In general, majority fail to beat the indexes year after year.