I'd listen to Warren Buffett to grow my wealth with ASX shares

When it comes to investing in ASX shares, you could do a lot worse than listen to the advice of the Oracle of Omaha, Warren Buffett. Over almost six decades now, the legendary investor’s Berkshire Hathaway (NYSE: BRK.B) business has smashed the market with some mind-boggling returns. In fact, Buffett’s most recent letter to shareholders reveals that the conglomerate’s book value per share has grown by an average of double the stock market return since 1965.

And that’s not because the stock market has delivered pitiful returns. Far from it! The S&P 500 index has generated an average return of 9.9% per annum since 1965.

It’s just that Buffett has found a way to achieve a return of 19.8% per annum over the same period. So, what’s the secret to Buffett’s success? Well, the good news is that there isn’t a secret and anyone can follow his investment style.

Investing like Buffett with ASX shares

While Buffett is well-known for loving a bargain, his focus is more on quality than how cheap something looks.

He once explained:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

But what makes a company wonderful and how can we find ASX shares with these qualities? Buffett believes sustainable competitive advantages, or moats, are of the utmost importance when investing. In his 2007 letter to shareholders, he explained:

A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital.

The dynamics of capitalism guarantee that competitors will repeatedly assault any business ‘castle’ that is earning high returns. Therefore a formidable barrier such as a company’s being the low-cost producer (GEICO, Costco) or possessing a powerful world-wide brand (Coca-Cola, Gillette, American Express) is essential for sustained success. Business history is filled with ‘roman candles’, companies whose moats proved illusory and were soon crossed.

Where to find moats on the ASX?

There are a number of ASX shares that have moats.

These include toll road operator Transurban Group (ASX: TCL), realestate.com.au owner REA Group Limited (ASX: REA), and biotherapeutics giant CSL Limited (ASX: CSL). There’s also the Buffett-inspired VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT) to consider, which only invests in companies with moats. And if you need any more proof that following Buffett’s advice could be the smart thing to do, you only need to look at this ETF’s returns.

Over the last decade, the index it tracks has generated an average return of 18.64% per annum.

That would have turned a £10,000 investment into approximately £55,000 over the 10 years.

barcelo-hotels-and-resorts listed on couponmatrix.ukbulk listed on couponmatrix.ukmytyres listed on couponmatrix.ukoffspring listed on couponmatrix.ukspells-of-love listed on couponmatrix.ukwaitrose-flowers-and-gifts listed on couponmatrix.uk
barcelo-hotels-and-resorts listed on couponmatrix.ukBook your next boutique hotel stay with Barceló and unlock the door to stylish accommodation and an elegant experience you’ll want to write home about. Use our Barcelo discount code to cut the cost of your booking and you could enjoy top-quality service without the high-end price-tag. With more than 240 hotels to choose from in 22 different countries around the world, you’ll be spoiled for choice of unique accommodation. Find your perfect match today.
bulk listed on couponmatrix.ukBulk™ is an iconic supplements brand helping you achieve your fitness goals. Make the most of a Bulk Powders discount code to save big on everything from vegan protein powders to high powered vitamins—whether you're looking to slim down, tone up or increase muscle mass, Bulk has a range of science-driven products to help you achieve your goals.
mytyres listed on couponmatrix.ukMytyres.co.uk is one of the UK's leading online tyre retailers. They offer a wide range of tyres from all the major brands, as well as a selection of budget and mid-range options. You can always find a mytyres.co.uk voucher code to help you save on your purchase. Whether you're looking for a new set of tyres for your car or motorcycle, you're sure to find what you need at mytyres.co.uk. At Groupon, we work hard to find the best mytyres.co.uk voucher codes and discounts so you can save money on your purchase. We know that new tyres can be a big expense, however, we know they are essential no matter the weather so we want to help you save as much money as possible. Drive safely with high-quality products all year around and check back often for the latest mytyres.co.uk discount codes and deals. One of the top-performing mytyres.co.uk products is their all-season tyres. Suitable to have all year around, the all-season tyres are made to keep you moving, no matter the weather. Mytyres.co.uk caters products for all types of vehicles, so why wait? Try the high-quality tyres from mytyres.co.uk today and make your drives more comfortable! Don’t forget to check our page for the latest mytyres.co.uk discount codes to save extra money off your purchases!
offspring listed on couponmatrix.ukOffspring is the UK’s leading ‘Sneaker Boutique’, bringing all the top branded shoes together in one place. They started as a small store in London, but now they provide the best and most exclusive sneakers to fans across the country. With your Offspring discount code, you can save on the very best names in the business, as well as high profile collaborations and the most recent releases. Don’t lose out on upcoming sneakers, beat the crowds and visit the top digital retailer for fashion sportswear.
spells-of-love listed on couponmatrix.ukFrequently adorned on royalty and celebrities alike, Spells of Love jewellery has seduced many thanks to its effortless style and seamless splendour. From emerald earrings through to tourmaline bracelets, there’s no end of options to shop and save on with the latest Spells of Love discount from Groupon. When it comes to the finer things, Spells of Love is all you need when you want jewellery to truly treasure.
waitrose-flowers-and-gifts listed on couponmatrix.ukWaitrose know true quality and their florist service reflects this. They have a stunning collections of flowers for every occasion, letting you browse British favourites alongside exotic specimens. Your Waitrose Flowers discount code means you can get the perfect gift whether you’re celebrating, congratulating or commiserating. All their flowers are fresh and seasonal so you know your order will always look the very best. Get a gift everyone can enjoy with Waitrose Florist.