Needless to say, many investors are the admirers of Warren Buffet, who is one the current greatest investor in the world. Well, we might know how Buffet picks stock. He picks what he likes and understand. According to Buffet, he likes to to have drink contained with caffeine, and that's why he chose to buy 7% of Coca-Cola shares at 1988, up to USD1.02 billions.
Up to February 2007, Coca-Cola bringing more than 20% annual return for Warren Buffet. That's what Buffet described Coca-Cola as an irresistible, low risk, long-term holding company. He also likes the simple business model from the company, with high ROE of over 30%.
By looking at similar stock in Malaysia, it seems like only BAT and Nestle are meeting the requirements. They have created a wide moat that most of the consumers need them daily, with steadily growing market share and revenue, as well as simple business model. So if you are invested and holding these 2 companies' shares since 10 years back, are you getting around 20% annual return?
Well, we are not Warren Buffet, and of course we are not the same. But the concept seems work on a small pool of stocks. So which companies are having similar characteristics now? If there is, are you willing to dump your money to that company, wait for 10 years to see and enjoy the average of 20% annual return?
Not surprising that many people are reluctant to do so. All they want is to buy a stock today, and get 20% on tomorrow or the maximum deadline is next month.
Happy Investing, folks.
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