Every year, droves of shareholders attend the Berkshire Hathaway annual meeting, some lining up before sunrise to get front row seats. The high point of the event is the question-and-answer session with Warren Buffett and Charlie Munger, celebrities in the investment world.

It makes perfect sense that attendees want to pick the brains of these market moguls. They have enjoyed enormous success with the simple, closed-end fund strategy of establishing close engagements and long-term commitments with well-run, fundamentally strong companies. Buffett isn’t a fan of micro-managing his acquisitions. He leaves that to the folks who have been doing it well enough to impress him in the first place.

Surprisingly, however, this straightforward and hugely successful business model isn’t widely imitated. Financial advisers and regulators prefer the open-ended model, with its inherent limits on long-term investment. In fact, in the European Union (EU), closed-end vehicles are classified as complex products and considered dangerous for small shareholders (precisely the sort that line-up for a glimpse of Buffett).

At the annual meeting, Buffett fielded questions about his laissez faire approach to acquisitions that implied an absence of adequate due diligence on his part. While he acknowledged having made some “bad acquisitions”, he also noted that his missteps were never the kind that could have been avoided by a more stringent and cumbersome pre-buy analysis.

Buffett’s genius is born of his understanding and appreciation of businesses and their fundamentals, including durable competitive advantage and strong management. He holds his companies accountable for results, but provides them the freedom to do what they do best.