I ought to be a natural Warren Buffett. I’ve never had any difficulty doing the opposite of what everyone else is doing. If there ever was anyone capable of being ‘fearful when everyone else is greedy and greedy when everyone else is fearful’, it’s me. Why, then, is Warren Buffett worth tens of billions and I’m scratching to break even after years of investing?
It isn’t that I haven’t been on the lookout for what Buffett calls ‘moments of maximum pessimism’. I have. I’ve been buying into them strongly. It’s just that there have been so many moments of maximum pessimism that I’ve used up all the cash I put aside for investing this year. So when it comes to the big one — the one economic historians will eventually identify as the real moment of maximum pessimism — I will have no money left. But Buffett will no doubt scoop up the shares I should have been buying, and make another fortune at the expense of suckers like me.
At the moment I feel less like Warren Buffett than like Little Miss Muffet. Here’s how it all went wrong. It started well. Like Buffett himself, I eschewed the promise of instant fortunes from the dotcom boom. The valuations of those companies are ridiculous, I told myself. Then I looked on with some pleasure as they went belly-up, taking fortunes and reputations with them: not least when the afflicted were those who had ribbed Buffett for ignoring technology stocks.
As markets sank, I set to creating my personal Berkshire Hathaway. Like Buffett, who started with the earnings from his paper round, I wasn’t going to bet the family home. I was going to stick to my annual ISA allowance and a similar sum to be paid into my self-invested pension.
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