Warren Buffett's Lessons for Small Investors

Why can't everyone invest like Warren Buffett?

In his Toronto Globe and Mail column, Steadyhand Investment Funds president Tom Bradley says it is "mind blowing .. that so few investment professionals actually apply" the common sense consistently displayed by Buffett and his long-time "sidekick" Charlie Munger. He blames all the short-term pressures facing the pros.

But for individuals, it's a different story. Bradley's translation of Buffett's basic principles serves as a simple how-to guide for small investors:

  • Keep it Simple
  • Stay with your competence
  • Diversification (but not too much)
  • Uncertainty is your friend
  • The power of compounding
  • "Wall Street makes its money on activity. You make your money on inactivity."

Joe Ponzio, who blogs on FWallStreet, has his own version of how to invest like Warren Buffett. His emphasis is on remaining patient and avoiding investments that are "too hard", as in too hard to understand. "When will you finally decide to stop worshiping gamblers and follow in the footsteps of the billionaire who made his money the easy way?"

Nothing new there, but that's the point, isn't it?

Questions? Comments? Email me at buffettwatch@cnbc.com