When he published this book in 1994, it quickly became a phenomenon. In fact, more than 1.2 million copies have been sold to date.
Robert closely studied Warren Buffett’s actions, words, and decisions for a number of years, analysed them and wrote a book which detailed twelve timeless principles that guided Buffett’s investment philosophy through all circumstances and all markets.
One of the most crucial things that Robert discovered and what I want to share with you today is, the simple investment strategy that can help an ordinary investor increase their chance of beating the market.
Read this now: You Asked... So, Here's Our No. 1 Investing Tip
Focus investing simply entails this…
Choose a few stocks that are likely to produce above-average returns over the long haul, concentrate the bulk of your investments in those stocks, and have the fortitude to hold steady during any short-term market fluctuations.
In The Warren Buffett Way, Robert Hagstrom ran an experiment that shows how focus investing works...
He used a database of 1,200 companies with reliable data – such as earnings, revenues, and return on equity.
He then ran a simulation of 3,000 randomly assembled portfolios, forming four groups:
3,000 portfolios with 100 stocks
3,000 portfolios with 50 stocks
3,000 portfolios with 15 stocks (the focus-investing group)