It's Easier To Be Warren Buffett Now Than It Ever Was
That means he goes through companies with a fine-toothed comb before he decides to make a big investment in them. It's like detective work, and the investor (may or may not) see things under a company's hood that they want to change, or believe the market is under valuing.
The thing is, it may take years for investors to see results. It's more passive.
Bill Nygren, manager of Oakmark Fund spoke at the Morningstar Investment Conference and explained why, these days, that's working in a value investors' favor.
Since many investors are so impatient, active fund managers (your traders etc.) are leaving some of the stocks that value investors love on the table.
“One of the things that has changed is the time horizon of investors,” Nygren said. “Investors might be smarter than 20 or 30 years ago, but they are focused on such a different time period than what we are looking for. I’ve seen sell-side reports [where they argue,] ‘It might take more than two quarters for the good news to start coming out.’” He chuckles.
“[Ours is] 5 to 7 years. [So] there’s actually less competition for cheap stocks today than when I started in the business,” he said. “Indexing, the percentage of momentum investors, very short term events — I think is higher than ever. [It] makes it easier for a long-term value investor to do well.”
So if you ever wanted to learn how to be the oracle, now is the time.