Some of you may have seen that I built a customGPT trained on all my blogs, papers, books, and podcasts. You can even go talk to it (me?) here:
Ask it a few questions, does it sound like me?
Anyways, we asked it to help write the below piece…not bad!
Chasing Buffett: Can You Get Berkshire Returns Without the Oracle?
Everyone wants to be Warren Buffett. Or at least, own Berkshire Hathaway and sit back while it compounds quietly into retirement. But here’s the trillion-dollar question: can you engineer Buffett-like returns without the Buffett brain?
Let’s run an experiment.
We pulled from Pim van Vliet’s “High Returns from Low Risk” dataset—and built a portfolio using the Conservative Formula: the 100 least volatile U.S. stocks with high shareholder yield and positive momentum. Think of it as Buffett meets factor investing. (His book is great too…)
From 1965 to 2023, we lined it up side-by-side with Berkshire’s performance. We also added a splash of leverage. Nothing crazy—1.25x to 1.5x—just enough to give it some rocket fuel.
Here’s what we found:
-
The unleveraged Conservative Formula delivered ~14% CAGR with 16% volatility and 25% drawdowns. Better Sharpe ratio than Berkshire.
-
Add modest leverage and you’re sitting at 18–19% returns. Max drawdowns? Around 40%. Sharpe still healthy.
-
Try that same leverage on the higher-volatility portfolios, and it’s a dumpster fire. Portfolio 9 gave back 96% at one point. Yikes.
So what’s the takeaway?
Low-volatility stocks are boring. But boring works. Add a bit of leverage and you’re sniffing Berkshire-like returns—without stock picking, without market timing, and without 50 years of reading 10-Ks on a Saturday night.
Quick Scorecard:
| Strategy | CAGR | Max Drawdown | Sharpe |
|---|---|---|---|
| Berkshire | 19.1% | -50% | 0.53 |
| Conservative (Unleveraged) | 14% | -25% | 0.73 |
| Conservative (Leveraged) | ~18.7% | -40% | 0.68 |
| S&P 500 | 10% | -38% | 0.48 |
Final Thought
Want to compound wealth like Buffett? You don’t have to clone his stock picks. You just need to avoid the landmines—deep drawdowns, excessive volatility—and lean on what works: shareholder yield, momentum, and volatility as a risk filter. Sprinkle in some thoughtful leverage, and you’ve got a scalable engine for long-term wealth compounding.
