Description
Book SynopsisWhen Warren Buffett Speaks. . . people listen. If people want to improve their investing skills, it has to help to study how the Master does it. This short book outlines Buffett''s philosophy and techniques.
Peter S. Lynch, Fidelity Investments
Common sense with a deft irony . . .
John C. Bogle, founder of The Vanguard Group and author, The Little Book of Common Sense Investing
It was Warren Buffett''s thoughts and philosophy that first captivated investors. Janet Lowe has done us all a great service by collecting and arranging Warren Buffett''s wit and wisdom in an easy-to-read and enjoyable book.
Robert G. Hagstrom, Portfolio Manager, Legg Mason Growth Trust mutual fund, and author, The Warren Buffett Way, Second Edition
A must-read. Buffett''s wit and wisdom is a roadmap for anyone looking to succeed in business, investing, and life.
Steve Halpern, Editor, www.thestockadvisors.com
Table of ContentsAcknowledgments xiii
Introduction 1
ABOUT LIFE 13
Omaha? Omawhere? Omawhat? 13
Live how you want to live 15
Eat what you want to eat 15
Have a hobby 16
Be passionate 19
Aim high 20
Aim well 23
Focus on your goals 23
Keep life in perspective 23
Be honest 27
Tell the whole truth, please 28
Letter to the Wall Street Journal 30
Cultivate good character 36
Believe in yourself 37
But don’t get too stuck on yourself 38
Dodge the hype 44
Share your wisdom 44
Disregard old age 45
ALSO: Attention Investors: Warren Buffett is crossing the street 20
Nice guys finish first—sometimes 24
Choose your heroes well 40
Rose Blumkin, matriarch of the Nebraska Furniture Mart 47
ABOUT FRIENDS 51
Know what friendship is 51
Go to bat for your pals 51
Guiding Governor Schwarzenegger 52
Build lifelong friendships 54
ALSO: Charlie Munger 54
ABOUT FAMILY 58
Don’t spoil your kids 58
The Buffett children 62
Work things out with your wife 75
Be kind to your mother 81
ALSO: What others say about Warren Buffett 70
Astrid Menks, Buffett’s second wife 78
The controversial Susan T. Buffett Foundation 79
What Leila Buffett had to say about her son 82
What the critics say 82
ABOUT WORK 85
Work for the fun of it 85
Start early 88
Work where you want to work 89
Work with good people 90
Give a pat on the back 92
Be loyal to your partners 93
Guard your time 95
Know when to quit 97
ABOUT RUNNING A BUSINESS 99
Communicate well 99
Know when to say no 100
Set an example 101
Take care of shareholders 104
Hire well, manage little 110
Put a premium on experience 111
Be smart about allocating capital 111
Be brave 112
Use crossover skills 112
The mighty machine called Berkshire Hathaway 113
ALSO: The Berkshire Hathaway annual meeting 102
Goodbye to a good idea 106
The Salomon scandal 108
Berkshire Hathaway online 109
ABOUT INVESTING 116
Have a philosophy 116
Recognize the enemy: inflation 117
Experience epiphany 119
Never mind what the professors say 125
Meet Mr. Market—your servant, not your guide 126
Ignore Mr. Market’s moods 129
Listen for opportunity’s call 130
Know the difference between price and value 133
Seek intrinsic value 133
Expect to be out of step 134
Earnings, earnings, earnings 137
Look forward, not back 138
Avoid risk 139
Don’t gamble 141
Watch for unusual circumstances 143
Don’t be surprised by circumstances 143
Avoid excessive debt 144
Look for screaming bargains 145
Arbitrage when possible 145
Be patient 148
Think for yourself 149
Have the right tools 150
Be wary of Wall Street 151
Only buy securities that you understand 152
An old dog prowls new markets 153
PetroChina 155
An expanding circle of competence 157
Buy reading glasses 160
Become an investigative reporter 161
Keep it simple 162
Think big 164
Know what you’re looking for 166
Don’t sweat the math 167
Admire frugality 169
Set realistic goals 171
Face facts 171
Expect change 174
Be capable of change 175
Admit your mistakes 182
No thumb sucking 185
Join AA (Airlines Anonymous) 186
Learn from your mistakes 190
Buy storybook stocks 191
Seek excellent companies 193
Stick with quality 196
Junk bonds 197
Appreciate franchise value 199
Respect pricing power 202
Find a company with cheap float (then try to not misplace the company) 203
Learn to like Monopoly 204
Find managers who think like owners 205
Management is important, but a good company is more important 206
Avoid the Institutional Imperative (the tendency for corporations to act like lemmings) 206
Favor companies that repurchase their own stock 207
Don’t worry about diversification 207
Invest for the long term 208
To sum up 209
And when you’ve become wealthy by following in the footsteps of Buffett, pay your dues to society 210
Investing is one way of contributing to the public well-being 210
When rewards are disproportionate 211
Pay your taxes and don’t complain 214
Give as generously as you receive 218
Thoughts on charitable giving 223
Will Buffett’s gift affect the company? 226
The last word 227
ALSO: Benjamin Graham 120
The Used-Cigar-Butt School of Investing 135
He tells them, but they don’t listen 172
Baby Berkshire shares 175
What does the Bill and Melinda Gates Foundation do? 224
Berkshire’s Book Value vs. the S&P 500 231
Berkshire Hathaway Share Price 233
Time Line 235
Endnotes 241
Permissions 271
