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Feb
26
Tim Lambert
Learn from the Best by Learning from your Investments
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Warren Buffett, considered by many to be the best investor in history, has stated that the company he learned the most from that he owned was See’s Candies, a chain of candy stores.  It was not a large, global entity like Coca-Cola (NYSE: KO), a major Buffett holding.  It was not even the biggest in its field, like ExxonMobil (NYSE: XOM) and Wal-Mart (NYSE: WMT), also in the portfolio of the “Oracle of Omaha.”  See’s Candies is not even publicly traded. But Buffett claimed he that has learned the most from watching how a company is actually run due to its size.

Other investors would be wise to follow Warren Buffett here, as in so many other ways.

A recent article on this site detailed how Pay Per Cloud, a small high tech, competes in the information technology sector with larger companies such as Amazon (NASDAQ: AMZN) and Verizon Communications (NYSE: VZ).  Pay Per Cloud does this very well as it is well run.  There are many other smaller businesses like Pay Per Cloud and See’s Candies from which individuals can can further their education as an investor.

Many times these firms operate in basics industries.

That is certainly the case with See’s Candies.  It is also true for bidet’Plus, a leader in bidet seats, and All-Safe Pool Fences & Covers, which makes fences, nets, and other needs for aquatic activities.  Network Cabling installs cables for a variety of communications systems in all 50 states. None of these businesses even comes close in size to an ExxonMobil or Coca-Cola, but all offer the opportunity for investors to learn much, much more as Buffett has from his ownership of See’s Candies.  For those looking to perform due diligence on the executives of these companies, there is another small entity that is a leader in its field, TheOfficialBoard.

One thing that investors will learn is that small company stocks return more than any other asset class, as the chart below shows.

That makes the education from following small companies such as See’s Candies, bidetPlus, TheOfficialBoard, All-Safe Pool Fences and Covers, and Network Cabling even more rewarding.  Investors can profit both financially and intellectually.   For the investor who aims to generate returns like Buffett, the small cap community is rewarding in every way.

 

Historic Stock Market Returns



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