There are two things for which legendary investor Benjamin Graham is known. The first is his groundbreaking approach to investing based on finding companies selling well below their intrinsic value to maximize upside potential while minimizing downside risk. That approach, known as value investing, has endured for more than eight decades, spawning hundreds of mutual funds and exchange-traded funds (ETFs) that incorporate Graham’s fundamental principles in their investment objectives. The second, which has expanded Graham’s notoriety among more recent generations of investors, is that Warren Buffett considers him a mentor. Buffett, viewed as the most successful investor in history, often cites Graham’s principles of value investing as his doctrine for successful investing. Buffett has summarized his approach to value investing in just one sentence: “Buy wonderful businesses at a fair price with the intention of holding them forever.”

Just one look at Buffett’s investment portfolio confirms his adherence to this approach. His biggest holdings consist of large established companies with iconic brands such as the American Express Company (NYSE: AXP), the Coca Cola Company (NYSE: KO), Wal-Mart Stores Inc. (NYSE: WMT), Wells Fargo & Company (NYSE: WFC) and International Business Machines Corp. (NYSE: IBM). Aspiring investors, who can only hope to achieve the type of returns Buffett has over several decades, can only wonder whether they should consider his portfolio a model for their own portfolio strategies. On the contrary, there are several reasons why Buffett’s investment strategy couldn’t work for average investors, even if they were to buy shares in every company in his portfolio.

1. Buffett Buys Companies, Not Shares

Most average investors buy shares by the hundreds, while Buffett buys them by the billions. However, it is not just the size of the stake Buffett buys that matters. Rather, it is the process by which he decides to buy, hold or sell any stock that is difficult to replicate. Buffett’s decisions involve variables most investors never consider, and he can utilize complex financial instruments and tax opportunities to minimize rise and increase returns. Because many of his share purchases are so large, Buffett’s portfolio is highly concentrated among a relatively small number of stocks.

2. Buffet Can Buy Whole Companies

With more than $60 billion sitting in cash, Buffett can buy up whole companies, just as he did in 2015 with the purchase of Precision Castparts Corp. Financial experts insist he paid a premium for the stock, but at $32.3 billion, Buffett’s analysis told him it was “wonderful business at a fair price,” and he felt he could work with the management. The biggest reason why an amateur investor couldn’t even hope to achieve Buffett’s level of annual returns is that a large portion of his portfolio consists of companies he purchased outright, such as GEICO Insurance Company, Dairy Queen and the Burlington Northern and Santa Fe Railway (BNSF). Purchasing whole companies in this way buys him the time to work with management to improve the bottom line.

3. Buffett’s Top Stocks Are No Longer Cheap

Many of Buffett’s top holdings are no longer selling at or near their intrinsic values, which means he would probably not purchase them in 2016. But this does not mean he will not continue to hold them. Buffett believes the right holding period for a good stock is “forever.” However, applying Graham’s value investing principles to these companies, the downside risk may not be as limited as it once was because the holdings' valuations may have grown beyond their intrinsic values. There may not be as much value left in the stock for investors trying to mimic Buffett’s current portfolio.

4. Do as Buffett Says, Not as He Does

Anyone who has followed Buffett knows he does not offer stock tips, nor does he advocate emulating his portfolio. He may speak about how great a company that he just bought is, but what he wants investors to hear are the fundamental reasons behind his decision. When he talks about buying stocks at a fair price and being ready to hold them for at least 10 years, he is advocating the process he uses, not any particular stock. His advice for most investors is to buy a cheap index fund and gradually dollar cost average into it. He has said that the problem with most investors is, “if you try to be just a little smart, spending an hour a week investing, you’re liable to be really dumb.”

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