This secret formula is followed by Warren Buffett and has made him one of the richest persons in the world.
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.
Benefits of Warren Buffet’s 20 Punches Method
Longer holding period for stocks means low portfolio turnover, paying less in brokerage, deferred taxes, less stocks to review/track, low probability to lose money and high probability to beat most professional money managers.
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Moral of the Story
Make few bets, big bets, infrequent bets.