Warren Buffett is the most famous investor of all time and one of today’s most admired business leaders. He became a billionaire and investment sage by looking at companies as businesses rather than prices on a stock screen. The first two editions of The Warren Buffett Way gave investors their first in-depth look at the innovative investment and business strategies behind Buffett's spectacular success. The new edition updates readers on the latest investments by Buffett. And, more importantly, it draws on the new field of behavioral finance to explain how investors can overcome the common obstacles that prevent them from investing like Buffett.
New material includes:
- How to think like a long-term investor – just like Buffett
- Why "loss aversion", the tendency of most investors to overweight the pain of losing money, is one of the biggest obstacles that investors must overcome.
- Why behaving rationally in the face of the ups and downs of the market has been the key to Buffett's investing success
- Analysis of Buffett's recent acquisition of H.J. Heinz and his investment in IBM stock
The greatest challenge to emulating Buffett is not in the selection of the right stocks, Hagstrom writes, but in having the fortitude to stick with sound investments in the face of economic and market uncertainty. The new edition explains the psychological foundations of Buffett's approach, thus giving readers the best roadmap yet for mastering both the principles and behaviors that have made Buffett the greatest investor of our generation.
I got deep into the Warren Buffet rabbit hole in the past year. Got to read all of Berkshire annual letters. I searched for a good complementary book that will allow me to learn more directly about how can I use WB methods in my own portfolio selection. This book is the exact thing that I wished for. Full of knowledge and construct in a very clean and easy to understand way to help someone like me with concrete steps to use.
– Oded Regev
It’s a good read about investments in stocks. But it’s easier to just use his portfolio because it’s really good.
I have read many books on value investing. This is far and away among the top books that I will re-read over the years to come. (Others include The Intelligent Investor; The Most Important Thing; Common Stocks, Uncommon Profits; The Essays of Warren Buffett; and Margin of Safety). Mr. Hagstrom has put together a great primer on how to evaluate a company as an investment. His tenets are great checklist for your thinking as you evaluate the merits of a company and its value and then apply a margin of safety to figure out if it is attractively priced. I would highly suggest that you also purchase something along the lines of William Sahlman's Note on Free Cash Flow Valuation Models available through Harvard Business Review if you're now sure how to perform a discounted cash flow model. I would definitely recommend buying and studying this book.
Nicely summarized investment principle as well as good background necessary knowledge with persuasive explanation.
I personally got the answer to my life long unsolved question; what does common stock investment (especially in the secondary market) really contribute to the society really? (other than just betting on the company’s share price which gives no additional value either to the company nor to the society).
the answer I realized is that becoming long term value investor could contribute to both the company and society because it helps to find right share price eventually and sound investment environment.
– Kyungbae Kim
ABOUT THE AUTHOR
Robert G. Hagstrom