A Regular Finance Blogger's 'Boring' Stock Picks Have Been Outperforming Warren Buffett's Berkshire Hathaway For Years: 'We're As Lazy As Possible' — Here Is His Low-Effort Strategy

Eddy Elfenbein, a seasoned finance blogger and exchange-traded fund (ETF) manager, has carved out a niche with his unconventional yet successful investment strategy. Since 2018, Elfenbein has been outperforming renowned investment figures such as Berkshire Hathaway Inc. and ARK Invest, thanks to his unique "set and hold" approach. This method involves creating a “buy list” of 25 stocks at the start of each year for his exchange-traded fund AdvisorShares Focused Equity ETF CWS and maintaining it unchanged for the entire year.

Elfenbein’s investment philosophy is grounded in discipline and long-term thinking. By not engaging in frequent trading, his strategy diverges from common practices in the investment world. The AdvisorShares ETF has achieved a return of 110% since its inception, significantly outshining the 74% and 45% returns of Berkshire Hathaway and ARK Innovation Fund, respectively. Typically, the fund’s holdings remain steady throughout the year, with occasional adjustments to a maximum of five stocks. 

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Elfenbein’s innovative “fulcrum fee” structure in the ETF aligns his interests with those of the investors, rewarding him for outperforming the S&P 500 and benefiting investors if the fund underperforms. This model underscores Elfenbein’s view of investors as partners, sharing in both the successes and challenges of the fund. Such transparency and aligned incentives have positioned CWS as a pioneering fund in the ETF landscape​​.

The 2024 buy list includes companies with strong market positions and competitive advantages, such as The Hershey Co., Intuit Inc., Moody's Investors Service, HEICO Corp. and Silgan Holdings, with long-standing investments like Aflac Inc. Elfenbein focuses on long-term investments, with an average holding period of five years for each stock, highlighting his commitment to stability and growth over immediate returns. His buy list has achieved an 18-year compound gain of 573%, exceeding the S&P 500’s 447% return in the same timeframe​​​​.

Elfenbein’s strategy offers a contrast to proprietary trading, which is characterized by its dynamic, high-risk nature. Elfenbein’s set-and-hold strategy appeals to investors seeking steady, long-term growth, while proprietary trading attracts those looking for quicker, potentially higher returns despite the increased risk.

In a Jan. 10 interview on the Downtown Josh Brown’s podcast “The Compound and Friends,” Elfenbein eloquently summarized his investment approach: “You don’t have to do a lot of trading. You don’t have to be in and out. You don’t have to get well-known growth stock names. You can get a sort of a boring portfolio, set and hold it and be disciplined and do very well.” 

This philosophy reflects his belief in the power of a disciplined, low-maintenance approach to achieve substantial market returns. Elfenbein encapsulated his method: “We’re as lazy as possible. That’s the goal.”

Elfenbein’s success with the ETF, which is closing in on $100 million in assets under management, demonstrates the effectiveness of a disciplined, low-maintenance investment approach in the modern financial world. His method challenges traditional trading practices and offers an appealing alternative for investors seeking stable, long-term growth.

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