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Berkshire Coverage

Want to Be Like Buffett? These Stocks Can Help

Although these three firms might be too small for Berkshire, they have great competitive advantages, and our analysts think they're cheap, too.

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It's a common refrain among stock investors that they want to be more like Warren Buffett. This shouldn't come as a huge surprise given Buffett's gleaming long-term record and folksy charm. But it is much easier said than done to follow Buffett's advice in buying companies with strong competitive advantages at a discount and holding them for extremely long periods of time. It takes strong nerves to fight the natural human urge to want to trade more frequently or buy into the latest craze.

So it might seem like a safe bet just to copy everything Buffett does. However, this doesn't buy a ticket to success. Buffett himself has said many times that he expects his investment returns going forward to pale in comparison with his past success. The sheer size of his portfolio means he isn't able to take advantage of smaller opportunities and must instead focus on mega deals such as buying Burlington Northern Santa Fe or Lubrizol. Investing in or buying a small company just doesn't have a major impact on  Berkshire Hathaway's (BRK.A) (BRK.B) earnings power.

Jeremy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.