Name: Buffett
ISBN: 9780385484916

Buffett

Starting from scratch, simply by picking stocks and companies for investment, Warren Buffett amassed one of the epochal fortunes of the twentieth century - an astounding net worth of $10 billion, and counting. If you had been among the lucky few sitting in his study in Omaha at the start of his career in 1956, and had invested $10,000 with him and kept your money with him throughout, your original investment would be worth $80 million today. That awesome record has made him a cult figure popularly known for his seeming contradictions: a billionaire who has a modest lifestyle, a phenomenally successful investor who eschews the revolving-door trading of modern Wall Street, a brilliant deal-maker who cultivates a homespun aura. But just who is the Oracle of Omaha, and why is he so successful? In his illuminating biography, journalist Roger Lowenstein draws on three years of unprecedented access to Buffett's family, friends, and colleagues to provide the first definitive, inside account of the life and career of this American original. Buffett reveals a man whose conscientiousness, integrity, and good humor exist alongside an odd emotional isolation. It shows how Buffett's investment strategy - a long-term philosophy grounded in buying stock in companies that are undervalued on the market and hanging on until their worth inevitably surfaces - is a reflection of his inner self.

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adventuredDec 2021

Buffett: The Making of an American Capitalist, by Roger Lowenstein.

It ultimately led me down a path that changed a lot about how I approached investing, and how I perform value appraisal / how I view value in general across all aspects of life. The principles of value investing and value judging apply to most things, rather than being narrowly limited to eg stock investing. It introduced me to some of the basic foundations of value investing. It's not a super renowned book (ala Ben Graham's various treatises on value investing), however it's my favorite Buffett book regardless and the one I most often recommend to new investors.

Price is what you pay, value is what you get. Such a simple concept, so extraordinarily important as a distinction.

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adventuredMay 2021

Buffett and Berkshire in fact have a long history of intentionally not always seeking the maximization of profit. Read Lowenstein's Buffett: The Making of an American Capitalist for several examples.

Berkshire is not an "investment firm" (although that may have been an accurate description 40 or 50 years ago). And they operate almost solely by the dictate of Buffett, not by theroetical shareholder demand for optimizing for max profit. That means they operate by parameters that Buffett deems prudent. Berkshire for example could have been deep into the supposed sure thing of the real-estate bubble circa 2005, instead they were one of the few mega corporations on the planet almost entirely insulated from it (so much so they were the ones doing the bailing out of other large corporations). That philosophy is the same reason why Berkshire might choose to pass on a supposed sure thing in crypto today: they don't like the risk; others may see a sure thing, they're skeptical (for better or worse).

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adventuredFeb 2021

I don't generally recommend the Intelligent Investor. I think it's almost always a mistake for ... 99% of new investors to bother with Benjamin Graham. His material is far too dense and often advanced for anyone that isn't quite an experienced investor. I'm sure there are exceptions, however I've found it's a huge turn-off for most new or newish investors, it delays / stunts their learning process, it's an obnoxious book to try digest if you're starting out. It'll make you hate investing or think that value investing is difficult (it's not, it's simultaneously the best approach for generating consistently high returns over time and very easy to learn).

Here is what I point new investors to:

- Buffett: The Making of an American Capitalist, by Roger Lowenstein.

- Margin of Safety, by Seth Klarman

- The Little Book That Still Beats the Market, by Joel Greenblatt

- Common Stocks and Uncommon Profits, by Philip Fisher

- Business Adventures: Twelve Classic Tales from the World of Wall Street, by John Brooks

- This article from 1984 by Warren Buffett: https://www8.gsb.columbia.edu/articles/columbia-business/sup...

- Peter Lynch also has a couple of optional books that are decent and very easy to digest for a new investor, very common sense oriented.

- Also optionally, Buffett's various writings are often excellent, however they're all over the place in focus, so it's hard to pick one. His annual letters for example can be acquired on the Kindle or from Berkshire's website and many are worth reading (if somewhat boring for most people I suspect).

The single most important thought in investing, in my opinion, is to always be cognizant of price vs value. What you're paying, what you're getting in return. Then always be aware of, always estimate as best you can, what your moat is for the investment at the price you're paying (what Klarman and others have called a margin of safety). How much can go wrong with your investment before you drown? How much room for error is there in the price that you paid? I like the Buffett book I reference above, because it pounds home that concept while introducing how Buffett came up, how he thinks (I don't particularly like his book, The Snowball, for that).

Also, Margin of Safety is out of print. However, there is a certain Archive site with a time machine, that if you were to put this url into it:

https://files.leopolds.com/books/Margin.of.Safety.1st.Editio...

You'll find an archived copy of the book in PDF format. Alternatively you can put that file name into Google and find some other copies of it floating about still (Klarman refuses to put it back into print and had been having the PDF copies taken down).

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lilott8Sep 2020

There aren't any formal rules that he lives and dies by, but read "Buffett: The Making of an American Capitalist" by Lowenstein. Buffett -- or at least Lowenstein captures -- expresses concern for people buying before he does.

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adventuredSep 2020

I entirely self-manage, for the past ~24 years now. That involves a persistent investment of time for a lifetime (a never ending process of reading and learning), and I happen to enjoy it. I could never stand to pay someone else to earn mediocre returns on my money. It's a beautiful time to be an investor, between zero-fee trades and easy access to a lot of excellent information and tools (in most cases now packaged with a common brokerage account).

My advice would be to do exactly what you're doing in regards to index funds, since this is your first money going into the market. If this very richly valued market drops at some point, it's going to sting, don't let that dissuade you from the long-term course, which is: investing as a matter of routine over time, you're in it for a lifetime, not a short-term flip; and during that lifetime, there will be many ups and downs. Always do your best to hold a long-term mentality about what you're trying to accomplish.

Depending on your personality, your preferences for learning about investing and managing your own money (it's incredibly boring to many people in my experience), you might consider setting aside a small slice of your investment money to invest into specific companies that you're interested in (ideally sticking to higher-quality, well-known, longer track record companies, so as to improve your odds of avoiding the Nikolas out there). Use that stake as a self-interest booster to practice reading about a company, following their progress, read their financials, read their quarterly and annual reports, read some of their archived annual reports. Practice basic due diligence on an investment that you're interested in (eg AMD, whatever it happens to be). Get used to the terminology, teach yourself to be able to digest financial information about companies rapidly, so that it's second nature. Then with a better grasp, begin practicing comparing companies, which will help you build some baseline comparison capabilities (so you'll be able to more rapidly grasp good or bad numbers from a company). Occasionally read business news, although don't bother with the bulls & bears type junk, the clickbait of the business & financial news world; read about concepts and events (like mergers & acquisitions, or stock issuances, IPOs, conflicts), to further educate yourself about how the markets work and get a feel for that world. This basic learning aspect doesn't take a lot of time, an hour per week, kept up over time. The end result is extremely valuable: considerably improved financial literacy; it gives you a leg up, as the vast majority of populations even in affluent nations tend to have a weak understanding of financial markets and stocks.

I'm biased in my recommendations, I'm a modified value investor in terms of strategy. I look for what I perceive to be mistakes in price vs value in the market. If you have an interest in managing your own money over time, you'll likely gradually learn to lean into what you're good at.

I'd recommend a few introduction level books, from the perspective of my bias:

Buffett: The Making of an American Capitalist, by Roger Lowenstein. Not primarily to learn about Buffett, rather, to learn about the concept of value as it pertains to investing.

Business Adventures: Twelve Classic Tales from the World of Wall Street, by John Brooks.

The Little Book That Still Beats the Market, by Joel Greenblatt.

Margin of Safety, by Seth Klarman. This book is excellent, however it has been out of print for some time. You may be able to find a copy of it somewhere though (there have often been PDFs of it floating around).

Common Stocks and Uncommon Profits, by Philip Fisher.

Peter Lynch has a few worthwhile books as well. Some of this will seem out of date, it's not. The lessons are eternal.

A lot of people will jump to recommending The Intelligent Investor by Benjamin Graham, I absolutely do not recommend his books for anyone new to investing. They're extremely dense, even for an average investor with years of experience.

I'd read this article by Warren Buffett from 1984 (The Superinvestors of Graham-and-Doddsville):

https://www8.gsb.columbia.edu/articles/columbia-business/sup...

There is always a wave of people that come around during the heady days in markets, proclaiming that value investing doesn't work, that markets are too efficient or the like. In the 1984 article (linked above) by Buffett, he references this as well, it was being argued to be an out-of-date approach just the same four decades ago; one might be inclined to question the authors of those arguments for what they're revealing about their particular interests. That's all bunk. I made a killing buying in March during the brief crash, by doing nothing more than specifically taking advantage of the sudden and considerable price vs value discounts that were made available (like Square trading for a mere three to four times sales; a belligerent discount vs their growth and potential), an inefficiency event in the market. It's down to being able to stand apart from the emotional crowd and make your own determinations about value. The approach will always work, and it applies to everything we do economically throughout life, not just investing in stocks.

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teMar 2020

A Random Walk Down Wall Street by Burton Malkiel

Buffett: The Making of an American Capitalist by Roger Lowenstein

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