When news gets out that Warren Buffett buys a certain stock it usually jumps up a few percent. The morning I found out he had bought billions of dollars worth of Apple stock the price went from $90 to $93. Today, close to 2 years later it’s hovering in the $180 range.
You won’t know exactly when he bought it or for how much but you can look up that stock’s price range in the quarter he purchased it. If the price is only 10% higher than the lowest price for that quarter then you may have found a deal. If Warren Buffett puts that much money into a stock he’s betting that it’s going to go up way higher than 10%.
Buffett bought all the major American airlines in the 4th quarter of 2016. By the time I found out about it all of them had gone up significantly in price except American Airlines. Again, I didn’t pull the trigger. The stock went up as high as $59 but came back down to the range of $41 where I first saw it at.
This time I pulled the trigger on American Airlines and Southwest Airlines, $41.60 and $51.40 respectively. I feel good to own some stocks that are Warren Buffett approved. This sounds like amateur hour advice but to me it’s rational. He’s done all of the due diligence for you. A stock pick endorsed by him can only be so bad.