This Is How Warren Buffett Is Playing Tax Reform. Should You Do the Same?

As an investor who looks for great individual companies from a long-term perspective, I don't put too much stock in trying to predict the broader market. Constantly moving in and out of positions in an effort to profit from short-term trends costs the investor a bundle in commissions and capital gains taxes. That's why the best approach to investing in equities is simply to buy shares of great companies at reasonable prices and hold them for the long term.

That being said, when the Oracle of Omaha himself, Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett, makes a comment about the broader market, I listen. That's not only because he's a genius, but also because he has a similar bottom-up, long-term investing philosophy. In a recent interview with CNBC's Becky Quick, he made a brief comment that made me sit up and listen regarding the potential of a large capital gains tax cut.

Image source: The Motley Fool.

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Source: Fool.com