Legendary investor Warren Buffett's investment story is something many people rush to emulate and learn from, believing that one day they too can achieve substantial investment returns like him. However, before ordinary investors in the secondary market follow in Buffett's footsteps in stock selection, they should think twice, and the following three major reasons (secrets) are worth your consideration.

1. He doesn't worry about living expenses

A few investors in our country may already have enough retirement funds (basic living savings that do not require work), but most of us must increase our investment portfolios during our working years and then make these savings generate reliable income during our golden years. Broadly speaking, this means that we are very inclined towards growth investments when we are young, and then shift towards value and dividends as we age.

Warren Buffett's estimated net worth is around 70 billion US dollars. He doesn't need to worry about the best combination of growth and dividends, nor does he need to worry about the timing of the transition from the former to the latter, because he has always had enough money to maintain a relatively modest lifestyle. When he says that his favorite holding period is "forever," he is not joking.

(Buffett was born in an old hospital in the city of Omaha, Nebraska. He was born into a wealthy family, with his father being a two-term U.S. congressman and a successful businessman.)

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First, you need to have enough money not to worry about living expenses.

2. You can't acquire entire companies

You may not know that Buffett's Berkshire Hathaway company holds large stakes, or even full control, in a significant number of high-quality companies, bringing considerable dividends and long-term returns, which are a continuous stream of cash flow.The following companies are the so-called cash cows:

Major Holding Companies:

These are companies with significant equity holdings by Berkshire Hathaway, either directly or indirectly through subsidiaries:

Coca-Cola Company - Berkshire Hathaway holds a 10% stake, 400 million shares, as the largest shareholder.

American Express - Berkshire Hathaway holds a 6% stake, 151 million shares, as the largest shareholder.

Wells Fargo - Berkshire Hathaway holds a 10% stake, 500 million shares as the largest shareholder.

US Bancorp - Berkshire Hathaway holds a 4.97% stake, as the largest shareholder.

The Washington Post Company - Berkshire Hathaway holds an 18.1% stake, 32.5 million shares, as the largest shareholder.

Johnson & Johnson

Goldman Sachs - 2.8% stake, as the sixth largest shareholder.Moody's - Berkshire Hathaway holds 16.1% equity, 38.07 million shares.

POSCO - According to Berkshire Hathaway's 2010 annual report, the company holds 4.6% equity.

BYD - Berkshire Hathaway's MidAmerican Energy Holdings Company holds 10% equity, 225 million shares.

IBM - In 2011, held 8.5% equity, 82.14 million shares, the largest shareholder.

Kraft Heinz - In 2015, held 26.8% equity, 330 million shares.

Apple Inc. - In 2017, held 133 million shares.

Home Capital Group - 38%, the largest shareholder.

Wholly-owned subsidiaries:

These are companies with nearly 100% equity held by Berkshire Hathaway.GEICO - Government Employees Insurance Company, one of the largest automobile insurance companies in the United States.

GeneralRe - General Re Corporation, one of the largest insurance companies in the United States.

Shaw Industries - A carpet company in the United States.

Nebraska Furniture Mart - A historic furniture company headquartered in Omaha, the hometown of Warren Buffett.

Borsheim's Jewelry - Borsheim's, a historic jewelry company.

Burlington Northern Santa Fe - Burlington Northern Santa Fe, one of the largest railway companies in the United States.

Precision Castparts Corp - Established in 1949 and headquartered in Portland, Oregon, it is a precision metal parts manufacturing company. Its products are used in the aerospace industry and general industrial production, and it is a designated parts manufacturer for companies such as Boeing, Rolls-Royce, Airbus, Bombardier, Cessna, and Goodrich.

These entities contribute cash flow to Berkshire Hathaway's overall operations, and perhaps more importantly, they eliminate the volatility of gains and losses associated with the increase or decrease of Berkshire Hathaway's stock.

Of course, as the owner of these entities, Berkshire & Buffett exercises control for the purpose of obtaining long-term benefits, rather than the short-term results that shareholders typically demand.

(Stable cash flow is the foundation of value investing)3. He Can Make Deals You Can't

Ultimately, Warren Buffett typically holds the same types of shares that ordinary investors can own. However, this is not always the case, and these one-off factors are key reasons why Berkshire Hathaway's average performance outshines the broader market.

Take Buffett's 2008 deal with Goldman Sachs (NYSE: GS) as an example. Like most other banks, Goldman Sachs was hit by the collapse of the subprime mortgage market and the subsequent recession. At the time, the bank, driven by the need for capital, sold Buffett $5 billion worth of preferred stock, which yielded a substantial 10% dividend. The bank also granted Buffett $5 billion worth of warrants, allowing him to purchase Goldman Sachs' common stock at a price of $115 in the future. The preferred stock enabled Buffett to reap approximately $3.7 billion in dividends and profits when Goldman Sachs reacquired the shares in 2011. Before the warrants expired in 2013, the Oracle of Omaha sold them back to Goldman Sachs for $2 billion, holding over 13 million shares of Goldman Sachs' common stock, which subsequently recorded substantial gains.

Unless you have an extra $5 billion lying around and are willing to take a risk when the outlook appears bleak, you may not be able to make the same deals.

(Similarly, top domestic investors such as Hillhouse Capital and Lin Yuan can participate in primary and secondary market placements, which are inaccessible to ordinary retail investors, and these returns can be quite substantial.)

Pave Your Own Path

Do not misunderstand. You can still use Berkshire Hathaway's assets and investment methods as a reference for your own investment portfolio. Just ensure that the investment makes sense for your specific situation, not just Warren Buffett's.

(Building a portfolio tailored to one's own circumstances is quite important)