An insightful new take on the life and work of one of the world's most remarkable investors: Warren Buffett
In the 30th Anniversary Edition of The Warren Buffett Way, celebrated author and investor Robert Hagstrom delivers the definitive version of his bestselling compendium of the investment strategies made famous by Warren Buffett. The Warren Buffett Way describes the twelve investment tenets of Warren Buffett's strategy called business-driven investing and his distinct approach to managing a portfolio of businesses. You'll learn how you can apply these same principles to building your own portfolio and find discussions on the psychology of long-term investing, its optimal benefits, and how to avoid the most common pitfalls and mistakes encountered by investors.
This latest edition includes:
- A new author preface to complement the existing forewords from Peter Lynch, Bill Miller, and Howard Marks.
- Insights on how to achieve worldly wisdom advanced by Warren Buffett's longtime business partner Charlie Munger.
- Footnotes and references to academic work that supports and expands on Warren Buffett's investment approach and portfolio management.
- The complete Berkshire Hathaway common stocks portfolios from 1977-2021.
An indispensable guide to the remarkable work and accomplishments of Warren Buffett, The Warren Buffett Way is a can't-miss resource for professional and individual investors who want to learn from the world's greatest investor.
Table of Contents
Foreword to the First Edition ix
Foreword to the Second Edition xv
Foreword to the Third Edition xvii
Preface xxvii
Chapter One World’s Greatest Investor 1
Understanding Patterns 3
The Making of an Entrepreneur 4
Buffett Limited Partnership 16
Berkshire Hathaway: Compounding Conglomerate 20
Chapter Two The Education of Warren Buffett 25
Howard Homan Buffett: Earliest Influence 26
Benjamin Graham: Developing an Investment Methodology 33
Philip Fisher: Discerning a Good Business 41
Charlie Munger: An Intellectual Perspective 50
Chapter Three Business- Driven Investing 65
Business Tenets 68
Management Tenets 71
Financial Tenets 79
Value Tenets 85
An Intelligent Investor 91
Chapter Four Common Stock Purchases 93
The Washington Post Company 96
GEICO Corporation 107
Capital Cities/ABC 120
The Coca- Cola Company 130
Apple, Inc. 140
The Value of Retained Earnings 159
Chapter Five Managing a Portfolio of Businesses 163
Portfolio Management Today: A Choice of Two 164
A Third Choice: Focus Investing 166
The Superinvestors of Buffettville 170
Three Thousand Focus Investors 181
A Better Way to Measure Performance 185
High Active- Share Investing 200
Chapter Six It’s Not That Active Management Doesn’t Work 203
High Priests of Modern Finance 204
Efficient Market Hypothesis 218
Investment and Speculation: Understanding the Difference 225
Investing in a Parallel Universe 230
Chapter Seven Money Mind 235
Sportsman, Teacher, Artist 238
Berkshire Hathaway: An American Institution 245
Appendix A Berkshire’s Performance versus S&P 500 Index (1965-2022) 251
Appendix B Berkshire’s Common Stock Portfolios (1977-2021) 253
Notes 279
Acknowledgments 293
About the Author 297
Index 299
