MagicDiligence

Buying a Buffett Portfolio

This is how I like to invest as well. I use the Magic Formula stock screen - the point of the strategy is to find good companies (high return on capital) at low prices (high earnings yield). Then check out the long term moat characteristics to make sure a stock is not a flash in the pan. You definitely have some excellent companies there, but a stock does not have to be owned by Berkshire to have these characteristics. Look at some of the smaller caps as well, even Buffett has said that these offer the greatest gains for the individual investor.

Steve
magicdiligence.com

Don't Try to Fix the Rating-Agency Model: Get Rid of It

And replace them with what? You can't get rid of the existing system without a better replacement. The last thing you want is each individual investment house trying to rate debt on their own. Without the NRSROs, how does yield get determined? You don't want 20 investment banks rating debt - this is a formula for "rating shopping" and will lead to worse results. Look, these guys made some bad calls, no question. The instruments they were rating were fairly new and complex. You learn from mistakes, make adjustments, and move on. That's the solution.

Steve
magicdiligence.com

Don't Try to Fix the Rating-Agency Model: Get Rid of It

And replace them with what? You can't get rid of the existing system without a better replacement. The last thing you want is each individual investment house trying to rate debt on their own. Without the NRSROs, how does yield get determined? You don't want 20 investment banks rating debt - this is a formula for "rating shopping" and will lead to worse results. Look, these guys made some bad calls, no question. The instruments they were rating were fairly new and complex. You learn from mistakes, make adjustments, and move on. That's the solution.

Steve
magicdiligence.com