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Warren Buffett's 20 Ticket Punch Card

A Stock Market Strategy for Better Investing Results


Warren Buffett has often said, "I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches - representing all the investments that you got to make in a lifetime. And once you'd punched through the card, you couldn't make any more investments at all. Under those rules, you'd really think carefully about what you did, and you'd be forced to load up on what you'd really thought about. So you'd do so much better."

Why? Too often investors throw money around like scattering seed, saying to themselves, "I'll throw a little here and little there to see what happens." Instead, Buffett advocates a policy of finding the best and richest soil, planting substantial amount of seed in it, and protecting it. This policy may sound simple, and it is. It also can be life changing. Lou Simpson, one of the best investors in the world and head of GEICO's equity portfolio, once said that this particular Buffett strategy helped him enormously in his record of crushing the market over several decades.

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