Customer Reviews

Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage

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Not only was the book brief and concise, it's also written in such a simple language that even an amateur can understand at the first glance. For the more advanced reader, or even the seasoned value investor, this book gives insight into Warren Buffett's "secret holy grail" to successful investing.

The basics of financial statements are briefly introduced, where the analysis of each of the three parts are structured neatly into small sections and chapters for the reader to understand more easily. Although it's not rocket science, these nuts and bolts of financial analysis can prove to be quite challenging for a beginner in accounting. Where appropriate, the book also clearly distinguishes Buffett's different views and arguments with traditional Graham-based value investors, which make this book an overall great book for both beginners and experts alike.

Pretty interesting read... should include where we can find financial statements... however, this is information that 95% of the financial world already has access... so a good starting point...

While the book provides a few useful rules-of-thumb (which could be gleaned in the time it takes to have a cup of coffee), it's written in such a dumbed-down way as to prove annoying beyond belief.
The book's "chapters" are drawn from the line items on the income statement and balance sheet -- sample revelation: "Chapter 40: Long Term Debt: Something that great companies don't have a lot of". If you need to know that, you might want to avoid picking your own stocks and buy an ETF.
The average length of each chapter is 2-3 pages. Some merely say that the line item is not important for measuring the long-term competitive advantage of a company.
More annoying is the authors' use of glib, familiar phrases like "what makes Warren superrich", and the glib, cutesy wrap sentences that end each chapter. Check a few chapter endings out on-line or in store.
This book might be good for a Grade 9 intro to investing or accounting class, but anyone else would be better off with something more substantive. I like Graham's Intelligent Investor which is an enjoyable read but goes into great depth.
J Carson
Ottawa

A short but useful book that I managed to read in under 24 hours. Very useful for beginner investors trying to learn the ways of Warren Buffett. My full book review is at [...]

Well written, smart and original statements not ear by ear really lived and real experiences. Helps with your investments and the way you think about taking risk. top5 investment books

Borrowed this book from my brother, read it and decided it is a must have, keep & regularly refer to. Did not review and buy when available at COSTCO, was not available again, finally bought from AMAZON.

Excellent book, learn how to invest do your own analysis understand financial ratios & terms, be independant and make your own decisions. Income Statement, Balance Sheet & Cash Flow Statement explained line by line & how Warren Buffett analysis & invests.

If you want to handle your own investments, you gotta pick this us. It's not just a primer on finances, or how to cut the credit cards, but a primer on how the big money guys look at stocks. This is exactly what I wanted. The Inside dish.

Every day former Fund Manager Jim Cramer comes on TV and tells the world how to trade and invest. His credo isn't ' buy and hold' but 'buy and homework'. That is, you don't buy stocks then forget about them; you check in on them on a weekly basis. This book is the answer to the question: ' What does it mean to 'check on' them?'

If that's what you're looking for, this book is terrific. It's a quick read, and they break down the Financial dry-as-cardboard stuff into simple language anyone can understand. What I was really looking for from this was a set of rules, a set of 'if/then' guidelines to consider when reading financial reports. Again, Cardboard. What a lot of guys do is make a 'Shopping List' of great stocks you want to own, as soon as the price comes down.

The first part: identifying great companies, that's what Buffett can help you with. He explains what exactly he's looking at when he sees Microsoft's or Hershey's financial statements. Buffett is looking for not just 'good' companies, he's looking for companies that have pseudo-monopolies. He calls them 'moats' (like a castle) when a company has protection from competition, something like a patent, or a powerful brandname, that means it keeps raking in the dough year after year after year, even without much in the way of 'new products'!

The second part: buying at the right price. He touches on that as well. For that you just need to know the historical prices and have patience that, in time, you'll get your opening. Stocks are underpriced all the time on the Market. The way it works is when a drugstore chain complains that the market is bad in their quarterly conference call (when the media pelts the Chief Financial Officer with questions), every company in their sector (competing drugstores) are devalued. People overreact! That's when you can buy a good drugstore for cheap. Timing is everything.

The third part? When to sell. Buffett does touch on this as well, and its all great advice. But for the record, Buffett hates selling. Get this: Warren Buffet has about $64B in Capital Gains that he's never paid taxes on. That's always been part of his investing style: that if you buy and sell quick trades, you'll keep paying capital gains tax, and that means 10-30% less profit each time. If you never sell, you never pay that.

And if you only invest in Excellent companies with mini monopolies, why would you ever sell?

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Michael Robson
21tiger - books/biz/asia

A very good book for rational investors who invest in share market.It based on Warren Buffet's way of selecting share's in the stock market to minimize your risks but maximizing gains over a long term .It lead you to financial freedom by wise investments in the share market.

Great book. Really lets you understand financial statements that companies put out every quarter. I wouldnt say this book lets you pick winners but it lets you understand the money matters of a company.

I have 10 years experience with the stock market but always looking for new theories and ideas.

I took the information from this book and made up a formula to pick undervalued companies by their balance sheets. I turned my $5000 TFSA into $9400 today.
I recommend this book to anyone who has experience with stock market and wants to learn more.