Billionaire Warren Buffett Guarantees He Could Bank 50% Per Year With $1,000,000 Portfolio – Here’s His Playbook

Billionaire Warren Buffett’s early method for making money in markets is resurfacing, along with a guarantee that he could earn massive returns if he had to start over.

In an interview with Bloomberg, the longtime Berkshire Hathaway CEO said he massively outperformed the Dow back in 1950 – promising that if he had to, he could do it again.

“The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers.

But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”

When asked about his guarantee in a question-and-answer session, Buffett said his trick to outperforming markets with a small portfolio is relentless determination to do deep research and find an edge.

“I went through the Moody’s Transportation Manual a couple of times. That was 1,500 pages.

And I found all kinds of interesting things when I was 20 or 21. And I don’t imagine there’s anybody here that knows about the Green Bay and Western Railroad Company. But there were hundreds and hundreds of railroad companies. And I liked to read about every one of them…

So to answer your question, I don’t know what the equivalent of Moody’s manuals or anything would be now. But I would try and know everything about everything small. And I would find something.

And with a million dollars you could earn 50% a year. But you have to be in love with the subject. You can’t just be in love with the money, you’ve really got to just find it.

You know, people find other things in other fields because they just love looking for them. A biologist looks for something because they want to find something. And that’s built into that…

It’s best when you find out what your brain is really suited for, and then you just pound the hell out of it from that point. And that’s what I would be doing if I had a small amount of money and I wanted to make 50% a year, but I also wanted to just play the game. And you can’t do it if you don’t find the game of interest, whether it’s bridge or chess – or in this case finding securities that are undervalued.”

Buffett says that after he grew Berkshire Hathaway into a behemoth, that strategy had to change.

“The universe I can’t play in [i.e., small companies] has become more attractive than the universe I can play in [that of large companies].

I have to look for elephants. It may be that the elephants are not as attractive as the mosquitoes. But that is the universe I must live in.”

 

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