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The Warren Buffett Way

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The Warren Buffett Way

Investment Strategies of the World

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Now that the bubble's burst, why not get back to basics.

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Editorial Rating

7

Qualities

  • Comprehensive
  • For Beginners
  • Inspiring

Recommendation

Robert G. Hagstrom discusses Warren Buffett’s secrets, covering how he became the most successful investor in the world and, as a result, one of the world’s wealthiest men. Hagstrom begins by describing Buffett’s early influences, from Benjamin Graham, the first professional financial analyst, to Philip Fisher, a professor and investment counselor. The key to Buffett’s success is that he held onto his core principles for making investment decisions, based on four key steps: Turn off the stock market; don’t worry about the economy; buy a business, not a stock; and manage a portfolio of businesses. The book is an excellent summary of the major principles and practices that led to Buffett’s success. However, the extensive amount of financial analysis provides a lot of information about each of Buffett’s investments. This can seem like too much detail if you just want an understanding of his basic investment principles. getAbstract recommends this fundamental book to everyone involved in making investment decisions.

Summary

America’s Richest Man

In 1993, Warren Buffett was America’s richest person, with a net worth of $8.3 billion. He is still the only person among the 61 Americans with a billion-dollar plus net worth who made his wealth from the stock market. Yet, he started his investment partnership in 1956 with an investment of only $100 and seven limited partners who contributed $105,000 to the investment pool. Thirteen years later, he had $25 million. In the following 22 years, he built it up to $8.3 billion.

Buffett’s Strategy for Success

Buffett’s success came from pursuing a strategy based on firm business principles. Starting in 1965, he used a textile firm, Berkshire Hathaway Company, as a vehicle - a holding company - for expanding into other investments. After buying stock in two insurance companies, he made a series of other very successful investments, including going into Blue Chip Stamps, the "Buffalo News," the Nebraska Furniture Mart, the H. H. Brown Shoe Company, and many others. In each case, he carefully evaluated the fundamentals of the business, including its management and its stock value relative to earnings, to decide if it was a good investment. Then...

About the Author

Robert G. Hagstrom  is the Senior Vice President and Director of Legg Mason Focus Capital and Portfolio Manager of the Legg Mason Focus Trust. He previously wrote The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy and The NASCAR Way: The Business That Drives the Sport.

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    P. B. getAbstract 1 decade ago
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    P. B. getAbstract 1 decade ago
    remarkable career
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    P. B. getAbstract 1 decade ago
    Must Read! I will never forget: It's ok to miss on an opportunity, but you should never make big mistakes.