Watching Warren

Warren Buffett has been so successful picking stocks that he has attracted numerous investors who seek to imitate his every buy and sell order. The problem for these followers, however, is that federal disclosure rules allow Buffett to wait 45 days after the end of the quarter before revealing the contents of the Berkshire Hathaway portfolio, and even longer for specific stocks that are in the process of being either accumulated or sold.

That should not prevent anyone from successfully following Buffett's moves, because according to a research paper by professor John Puthenpurackal of Ohio University, an investor who mimicked Buffett would have beaten the Standard & Poor's 500-stock index by an average of 11.6% a year from 1980 to 2003, even after accounting for the reporting lags.

Buffett's picks tend to jump in price when disclosed, so the researcher didn't start measuring performance until two weeks after each filing. Further, according to Gerald Martin of A&M University, who rates Buffett in the 100th percentile of all investors, "Disciples (of Buffett) can make money and beat the market."

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