Warren Buffett, known as the "Oracle of Omaha" and one of the most successful investors in the world, may also be the most studied and emulated investor alive. If imitation is the most sincere form of flattery, Mr. Buffett has a lot to feel good about, as investors around the globe have tried to copy Buffett's investment strategies in an attempt to enjoy even a fraction of the type of wealth attributed to his investing prowess. (This esteemed investor rarely changes his long-term investing strategy, no matter what the market does. Check out Warren Buffett's Bear Market Maneuvers.)

TUTORIAL: Ratio Analysis

Who are the Copycats?
Buffett's investing aptitude and corresponding wealth are attractive and inspirational to a variety of investors. All types of investors, including individual and institutional, attempt to follow Buffett's lead. One website that provides details on the portfolios of the "pros" is www.tickerspy.com. Investors can track the pros' investments, and create either hypothetical or actual investment portfolios of their own that shadow pros like Buffett. This particular website shows that over 5250 members currently are tracking Buffett's portfolio, some of whom have adopted Buffett's portfolio in its entirety while others share only a few holdings.

Copycats Do Well, In Theory …
According to a joint study entitled "Imitation is the Sincerest Form of Flattery: Warren Buffett and Berkshire Hathaway" by Professors Gerald Martin of American University Kogod School of Business and John Puthenpurackal of the University of Nevada, investors could have earned statistically high annual returns if they purchased the same stocks as Buffett. This is despite the delay between the time when Buffett would have made the investments, and the time a copycat investor would have been made privy to the information through regulatory filings.

The 2008 study contends that over the past three decades, buying the same stocks as Buffett would have delivered returns that were nearly double those of the Standard & Poor's (S&P) Index. The study concludes that "an investor who mimicked the investments from 1976 to 2006 after they were publicly disclosed in regulatory filings would experience statistically and economically significant positive abnormal returns…" This should be good news for copycats who could expect to do quite well shadowing Buffet's investment decisions, even with a delay. (They don't call him "The Oracle" for nothing. Learn how Buffett comes up with his winning picks. See Think Like Warren Buffett.)

… And Sometimes in Reality
Despite the study's findings that investors can achieve higher-than-average returns by following in Buffett's investing footsteps, the reality is that many investors, whether individual or institutional, do not have the financial ability to risk the amount of money that would be required to own all of Buffett's holdings, even in small position sizes. Without spreading the risk through a well-diversified portfolio such as Buffett's, and instead cherry-picking a few of the stocks, any expectancy for particular returns would be lost.

It should be noted that Buffett believes in avoiding over-diversification – or putting all of one's eggs in too many baskets – which can be just as detrimental as too little diversification. In addition, Buffett's strategy involves buy-and-hold investing. Some of his positions were opened decades ago. Buffett first purchased American Express, for example, in 1964, and has continued to add to his position over the years. The investment today has an unrealized gain of nearly $4 billion.

Not all investors can hold positions for such an extended time, either because they simply started investing too late, or they take a big enough loss that they close the position. (Buffett's "Rip van Winkle" approach has served him well. Read on to learn more. Check out Warren Buffett's Best Buys.)

This in no way implies that copycat investors do not or cannot do well when making the same or similar investments as Warren Buffet, or by simply following some of his strategies, regardless of the chosen stock positions. Even if an investor chooses an entirely different portfolio, he or she could benefit by adhering to Buffett's techniques, including the right amount of analysis, Buffett's well-known decree to invest in what you know, or his tactic to "be fearful when others are greedy and greedy when others are fearful."

TUTORIAL: Behavioral Finance

The Bottom Line
If you go to amazon.com and search for "Warren Buffett," no less than 50 books appear either written by Buffett, or with his name in the title. These writings examine Buffett's strategies, business acumen, investment habits, quotations, wit and wisdom. Buffet and his investing techniques are constantly in the spotlight and are studied, judged, praised, evaluated and, of course, copied.

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