(Last Updated On: October 1, 2019)

Investment advice, fees & bias

Warren Buffett gives the best advice on investment advisors, fees and bias:

“The question of finding investment advisers is a hard one. Most advisers are far better at generating high fees than they are at generating high returns. In truth, their core competence is salesmanship.”  Warren Buffett 

“Money managers purposely work at manipulating numbers and deceiving investors. They’re selling the fund of fund stuff – it’s really unbelievable, piling on the layers of costs. But if they are good at marketing they don’t need to be good at anything else. The poor guy in the general public is getting a terrible product.”  Warren Buffett 

“Many brokers are far more concerned with how much they gross this month than whether their clients prosper in the long run…… Brokers, using terms such as “  marketability” and “liquidity”, sing the praises of companies with high share turnover. But investors should understand that what is good for the croupier is not good for the customer.” Warren Buffett

“Beware the glib helper who fills your head with fantasies….Mega-rich individuals (feeling that it is their lot in life to get the best) listen to the siren song of a high-fee manager. That advice is often delivered in esoteric gibberish…..Those who cannot fill your pocket will confidently fill your ear.” Warren Buffett

“Sales people like to divide investments into categories. It is a great way to sell investment advice, but not a good way to invest. A typical investment counselor organisation goes out and they bring out their economist and he gives you this big macro picture. And they start working from there on down. Asset allocation recommendations – 65% in stocks, a certain percentage in bonds and cash – is total nonsense. We’re not interested in categories per se. We’re interested in value.”  Warren Buffett

“Diversification is protection against ignorance…. I cannot understand why an investor elects to put money into a business that is his 20th favourite rather than simply adding that money to his top choices – the businesses he understands best and that present the least risk, along with the greatest profit potential.” Warren Buffett

We ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen.  I read the Financial Times every day, but if there is something in the headline, ‘What I think the world will look like next year’ by anybody prominent in world economics, I don’t read the article.  The time spent doing that I could spend looking at businesses.  I’m not interested in soothsaying.  Nobody knows what the economy’s going to look like a year from now or two years from now……. We have never foregone an attractive purchase because of the macro or political environment. In fact, these subjects never come up when we make decisions.” Warren Buffett

Gavin Ross & Co

At Gavin Ross & Co a portfolio of directly owned stocks, real estate investment trusts (REITS), and cash reserves, individually tailored and managed according to your personal requirements, is the best performing, secure, transparent, and least costly way to invest.

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