on March 27, 2004
I am not Warren Edward Buffett. Unlike Mr. Buffett, who has the delightful headache of trying to figure out where to put his steadily growing billions, I am a non-investor, sitting on the sidelines, wondering what all the fuss is about. Like most readers of this book, I have been told incessantly to invest for retirement, and not knowing exactly how I should do so, I figured it might be a good idea to glean a few secrets from a proven successful investor. Hence, I read The Warren Buffett Way from cover to cover, hoping to learn a few things.
And what did I learn? I learned that I am not Warren Edward Buffett. Unlike Mr. Buffett, whose circle of associates includes all of the Beautiful People of Corporate America, I am surrounded by ordinary people, more than a few of whom are looking for a way to get rich quick. Whereas Mr. Buffett is patient and thoughtful with his investments, most of the people I encounter are thoughtless and reckless with their gambles. These two things, which I increasingly began to ponder as I read this book, distinguish me from the Oracle of Omaha, and quite possibly from most readers of this book.
The book consists of nine chapters, and is mostly historical in nature. It details many of Buffett's past exploits in the stock market, mostly the good moves but also some bad ones, and offers some of the principles guiding Mr. Buffett's stock investing strategy, grouped into three classes called Management, Financial and Market Tenets. The first four chapters of the book delve into the early history of Berkshire Hathaway, the key influences on Mr. Buffett which helped to shape his investment philosophy, Mr. Buffett's perspective on the financial markets, and the principles by which he goes about purchasing a business. The last five chapters of the book give example after example of some of Mr. Buffett's past stock moves, and tries to show his Tenets in action.
The style of the book is mostly active until the fifth chapter, whereupon it becomes plodding. The book is extremely repetitive at points, and as other reviewers have pointed out, key concepts are not fully explained up front, suggesting that the possible target audience for this book are those having a strong background in the general principles of economics and business.
In all honesty, I have previously encountered most of the content of this book in coursework or self-study. I previously read Mr. Hagstrom's The Warren Buffett Portfolio, and found the two books to be similar in some respects. That said, I still found this book to be very interesting and useful, primarily because it exposed me to an investment approach which utilizes these concepts in ways I had not previously considered. I also found it highly interesting on an anecdotal level, given that Mr. Buffett's investment career spans The Go-Go Years, The Nifty Fifty Stocks and the 80s and 90s Tech Stock Boom, and yet he never once participated in these tech-stock manias but handily outperformed tech stock investors nonetheless.
Like I said, I am not Warren Edward Buffett and I can not expect or even hope to do what he does, but that does not mean that I can not think like him. Even Mr. Buffett cautions the small investor in this regard, as there are things that he can do that none of little guys can do. Yet, he also has said that there are things the little guy can do that he can not do. That said, the book deserves to be read by any one lacking the ability to reason through the process of investing. However, readers at all levels should not stop with this book. Others have pointed out that one could get even more information straight from the horse's mouth- the Berkshire Hathaway website.
On the other hand, as this information details past moves for which the conditions surrounding them are most unlikely to come around again, I believe that the more astute reader looking to learn more should consult The Money Game by Adam Smith for a brief historical look at financial foolishness (albeit the late sixties but the resemblance to Right Now is striking), The Theory of Investment Value by John Burr Williams for Buffett's original basis for valuation, and The Intelligent Investor by Benjamin Graham for a more detailed explanation of the concepts of margin of safety, intrinsic value, and the benefits associated with ignoring the market noise. These three books will help one learn how to reason through the investment problem, as this is the most important step, aside from finding smart people (as Mr. Smith admonishes forcefully in The Money Game and Buffett has consistently done) and thinking more but acting less (as Buffett has said- do a few things right and screw everything else).
on April 21, 2004
If you are reading this book just to be better informed, I think you will get your money's worth. I feel I got a five-star education. But if you are going to read it to make a decision to buy or not to buy Berkshire Hathaway, you should keep these two points in mind: First, almost everyone considers Warren Buffet to be the world's greatest investor. This special attribute of Mr. Buffet might be reflected in the price of Berkshire Hathaway stock. If Warren Buffet were no longer around, what would that do to Berkshire Hathaway? Hasn't Mr. Buffet's greatness built in a premium in Berkshire Hathaway stock?
Second, this book proves that Mr. Buffet beat Mr. Market most of the time under normal circumstances. In abnormal circumstances, Mr. Market could beat Mr. Buffet. Abnormal circumstances would exist if Mr. Market went into a long, deep depression (like he did in the 1930's and dropped in value by 90%). And could a second terrorist attack similar to 9/11 cause Mr. Market to panic and create abnormal circumstances in the economy?
No matter how good the company, Mr. Market can and will hurt the value of its stock. If there is another terrorist attack like 9/11, Mr. Market will panic and Coca Cola, Washington Post, GEICO, etc., would all suffer terribly.
on May 30, 2002
Other reviewers have written that this book is undervalued and they are right. Right from the start Hagstrom gives us advice on the nature of the market. He then gives management tenants, how to value a business and all kinds of investment tenants. These tenents are so fundamental that its very difficult to see how investing can be done without them in one form or the other. This makes the book timeless. Numerous examples are given from real world cases of how these tenants are used. There is also an excellent appendix that gives examples of how a business is valued. This is very helpful. Some reviewers have criticized Hagstrom, saying that if the book is true, why isnt he rich? But this is not how information is to be judged. There are many books that contain solid gold advice, but there are few who master them. Buffett is among them. If one wants additional information on Buffets methods, I suggest reading "How to pick stocks like Warren Buffett" by Tim Vick. But The Warren Buffett Way is a classic and at the top of the heap.
on April 27, 2002
I bought this book back in 1997. Up to then I had never invested in the stock market and did not give it any thought.
This book opened a new door to me. I remember to grow ever more enthusiastic as I read through its pages for it showed me a whole new world. A gust of fresh air made me realize the overwhealming advantages of partly owning a great company in the stock market at a reasonable price as a small investor. I quit looking at the stock market as a simple casino and turned serious attention to it for long term investment. Not only did I find the studying of different companies by fundamentals and the process of investing very fun, but also financially very rewarding.
Today I want to thank from these pages Warren Buffett and Robert Hagstrom for contributing to the spread of financial common sense in a world where the lack of it is stunning. And above all, for the privilege to read this masterpiece on investing and get an insight of Warren Buffett investment style.
This book is strongly undervalued and should be bought by everyone that cares about his financial future. Strong buy recommendation. Full of wisdom and fun to read. And I owe to it my personal financial success, averaging 40% yield per year, just applying the investment principles taught here.
on December 3, 1999
For starters, you can read this book and understand investing even if you're not a businessperson. Beginners should read the biography written by Roger Lowenstein first although this book is much more interesting.
The book talks about the billionaire investor Warren Buffett, how he got started, his achievements, the type of guy he is, how he calculates what a company's worth. Much like a biography... but the best part in my opinion, are the details on Buffett's past purchases. Hagstrom (the author) actually gives charts to show these which to me is invaluable. You'll know what I mean if you've ever tried to put money in stocks as a value investor.
To the experts (and I don't mean the people with advanced degrees or MBAs but the experienced VALUE investor), this book is a must have. I use it to study the specific purchases he made and by looking at the graphs, I think it's not hard to tell what Buffett was thinking, given what he already knows about the companies. And plus, you'll get some idea on calculating intrinsic value which I honestly think came from Hagstrom, not Buffett. But it's a start.
As it relates to price, I'd say this book is undervalued, it's a screaming buy pitch (under US$6)... You'll learn a great deal about stocks and about people (from managers to stockbrokers).
on November 20, 1998
Well, this may not be the best book on Buffet out there, but it did it for me. Tables and comments were helpfull enough. I don't want to compare it to other books out there or Buffet's own reports; I don't care. All I am interested is how to invest my money. And boy I did! Three years ago when I read the book I was looking for ways to invest my $130000. After I had red the book I did the homework and put all I had on just five companies. I still own those companies and I did only one rotation since then. My account now is $450000 and I am telling the truth. I have never lost sleep over my investments. Occasionaly I would check to see how I was doing, but that was all! In the meanwhile I was occupied with things I chose to do in my life and even obtained a Ph.D. I knew that since I was in there for the long term with good companies I would be winning. Along the way market helped me exactly in the way it helped Buffet, by bringing prices of good companies down and meking it possible for me to buy at good prices. After all, the best investment decision I consider is buying this book. Not because it is that good, but because it was good enough to teach me how to disregard what the speculators in the market were doing.
on June 26, 2003
This book describes Buffet's investment principles and decisions in a clear, brief and very good way. Especially interesting is the discussion of the tenets that guide Buffet's purchases and the analysis of some of Buffet's investments, following these tenets. Buffet is the most succesful investor of the last decades, so studying his decisions and philosophy is, according to me, one of the best things an investor can do to learn about the business. This book offers an excellent opportunity to do so.
(By the way, if you really want to know how Buffet operates, reading the books of his masters, Fisher and especially Graham, is a requisite too!)
on June 3, 2000
As an abnormal investor, I have noted Buffett's investment strategies as being almost the same as my own, except that I do not have the financial backing or expertise of the "sage from Omaha". Truthfully, with the track record that Warren Buffett has demonstrated, why do investors follow the theories of other "gurus" that went to MBA school just to network and not learn a [darn] thing about business strategy and how to identify true value? While I did find the author a tad hard to follow at times, the information gave me insight into how Warren Buffett makes his superior investment decisions.