The Warren Buffett Way, + Website 3rd edition by Hagstrom, Robert G. (2013) Hardcover

The Warren Buffett Way, + Website 3rd edition by Hagstrom, Robert G. (2013) Hardcover

Posted by jack_miller | Published 7 months ago

With 271 ratings

By: Robert G. Hagstrom

Purchased At: $21.34 (14 used & new offers)

Warren Buffett is the most famous investor of all time and one of today’s most admired business leaders. He became a billionaire and investment sage by looking at companies as businesses rather than prices on a stock screen. The first two editions of The Warren Buffett Way gave investors their first in-depth look at the innovative investment and business strategies behind Buffett’s spectacular success. The new edition updates readers on the latest investments by Buffett. And, more importantly, it draws on the new field of behavioral finance to explain how investors can overcome the common obstacles that prevent them from investing like Buffett. 

New material includes: 

  • How to think like a long-term investor – just like Buffett
  • Why “loss aversion”, the tendency of most investors to overweight the pain of losing money, is one of the biggest obstacles that investors must overcome.
  • Why behaving rationally in the face of the ups and downs of the market has been the key to Buffett’s investing success
  • Analysis of Buffett’s recent acquisition of H.J. Heinz and his investment in IBM stock 

The greatest challenge to emulating Buffett is not in the selection of the right stocks, Hagstrom writes, but in having the fortitude to stick with sound investments in the face of economic and market uncertainty. The new edition explains the psychological foundations of Buffett’s approach, thus giving readers the best roadmap yet for mastering both the principles and behaviors that have made Buffett the greatest investor of our generation.

I have read many books on value investing. This is far and away among the top books that I will re-read over the years to come. (Others include The Intelligent Investor; The Most Important Thing; Common Stocks, Uncommon Profits; The Essays of Warren Buffett; and Margin of Safety). Mr. Hagstrom has put together a great primer on how to evaluate a company as an investment. His tenets are great checklist for your thinking as you evaluate the merits of a company and its value and then apply a margin of safety to figure out if it is attractively priced. I would highly suggest that you also purchase something along the lines of William Sahlman's Note on Free Cash Flow Valuation Models available through Harvard Business Review if you're now sure how to perform a discounted cash flow model. I would definitely recommend buying and studying this book.

- delaney_roberts

50% of the book is just waste of time as it repeats itself in quite many times. There are however extremely useful parts as well, like:

- How discounted cash flow can be calculated
- How return on equity should be interpreted and why it's more crucial than the typical P/E ratio

Even I gave just three stars, book itself is quite useful reading but it could be shortened at least into half.

- rayne_turner

At least for me. I thought I was a value investor. I looked for low P/E ratios, lower debt, and good earnings based on conventional thinking. I did ok. I knew about Buffett and had heard about this book from professional analyst. So I listened to this book in my daily travels and was dumbfounded-i was looking at the wrong places for my valuations. Now I am intensively studying this book and applying its teachings and I love it.

- dylan_evans

I've heard this, in the car, maybe 10 or 20 times. It makes me think -- and feel -- the importance of studying, and of course, what to actually study. I have a hard time understanding Annual Reports (from publicly traded companies), as all those accounting terms, and GAAP standards (hardy har har) make it difficult to figure out if a company is making more money than it spends, but more importantly Hagstrom's book gives an insight into Buffett's approach which includes, as an example, reading all those "footnotes", as well getting a feel for whether management is doing what they say they're going to do.

I think that companies' annual reports are partly "boilerplate" info, but I also think they are INTENDED to obfuscate, since the real question is to determine whether a company makes more than it spends (profit), and secondly whether shareholders tend to benefit (or if the company plows that cash back into their own agenda).

- diana_robinson

nicely summarized investment principle
as well as good background necessary knowledge with persuasive explanation

I personally got the answer to my life long unsolved question; what does common stock investment (especially in the secondary market) really contribute to the society really? (other than just betting on the company’s share price which gives no additional value either to the company nor to the society)

the answer I realized is that becoming long term value investor could contribute to both the company and society because it helps to find right share price eventually and sound investment environment

- vienna_foster

This is a great book with insight into Warren Buffett's style of stock picking. I would not recommend the workbook that companies this book. I liked this book enough I gave a copy to my nephew who's interested in learning about investing. Two other books that partner well with this are Warren Buffett's Three Favorite Books and Warren Buffett Accounting by Broderson and Pysh.

- randy_cook

I am not finished yet merely half-way into the book but I wanted to review this book; I just could not wait ;-) to tell you all about it. I am taking my time and digesting it all because the meat needs to be chewed, enjoyed and digested thoroughly. I am enjoying each aspect of this book and can't say enough...............I am loving this book.

I have purchased several books pertaining to Buffett and have followed him and his work for a few years. I was interested in him not only because of his investments but his character is to be rewarded; money isn't everything. I have not finished the other books that I have purchased about him but want to be able to absorb this one first before moving forward into the others. Nor have I gotten a chance to delve into the website yet, I can't wait.

This book helps you to see and delve into the ways into which Buffett processes his investments but also shows how his upbringing, mentors and experiences has helped him in his investment endeavors and the investment choices that he makes as seen in Chapter 2: The Education of Warren Buffet. Here it provides an understanding of the industry and having hands on experience does help but in not letting money be your guide is best. Once you understand then you can make better and educated decisions.

Everyone may not be able to have the same types of successes as Buffett has had but to understand the method behind the man says a lot. Robert G. Hagstrom does a good job in breaking down the book. As in Chapter 4: Common Stock Purchases - Nine Case Studies in the tenets that he uses are valuable from Simple and Understandable and Price Point to Candor/Rationality. Stay tuned for a follow-up from me once I finish the book and review the website.

Up unto this point this book is Highly Recommended.

- hayley_lopez

I thoroughly enjoyed The Warren Buffett Way. I have read several books and articles about Warren Buffett's investment strategies and this book really helped me with my own investments. I would recommend this book to anyone seeking to learn more about Buffett's investment success.

- shaun_johnson

This is an excellent read. As someone new to value investing, the insights shared and some of the concepts were simply put with practical examples. This book is about the approach Warren takes and the underlying philosophy and mindset he has adopted. It also advocates for long term value investing in general. Not for the get rich quick investing. Absolutely great

- eve_scott

Just read and use and again. Highly recommended. The best ever book about Warren Buffett's investing mastership. It might be a must reading for every person interested in real investing. A great job from the author. It is a masterpiece.

- khalid_edwards

Great insight into Warren Buffett's life and his method/systems. A good read, would highly recommend.

- aaden_mendoza

Great book. A must read

- hadlee_evans

Don't expect to become an expert after reading this book. It will give you an idea and basic understanding of investment world.

- cameron_wright

Great Book

- kairi_cox

I read this book 2 years ago and now again read it once again. This won't be the last time too. Both times I had understood the book more. I forgot and lost my way after the first time and now I hope to live on these principles. It is one of the most profound books I have ever come across.

- hunter_evans

I bought this book because i really want to know as much as i can about value investing.

The book has some really good parts, but the good parts dont give you a deep dive, just a quick overview about some interesting aspects.

The biggest part of the book shows the circumstances of the companies buffett bought. Content you can get for free by asking google if you want

If you are already investing in stocks for a few years and if you know what value investing is about, its not necessary for you to read this book. If you are a newbie at the markets and in value investing, this book can help you to get an understanding and an overview what its all about.

Website:
I thought there would be some usefull stuff like excel sheets or sth like that, but its just a commercial website. All the links for the ressources, tools and the board dont work, which is in fact really disappointing...

- fabian_mendoza

Outstanding communication and explanation of the investment philosophy of Warren Buffet and how it could be applied by an average investor. A must read for long term value and quality investors.

- danielle_gomez

O livro conta de maneira resumida sobre as pessoas que exerceram influência sobre Buffett, sua filosofia de investimentos, os principais itens a se avaliar em um investimento e exemplos de investimentos feitos ao longo de sua carreira avaliados sob esses aspectos. Recomendo!

- charli_peterson

Good book for those who want to understand basics of valuation of businesses / stocks.Big thanks to author and all those who helped him compile the book.I bought from Amazon and read both the 2nd and 3rd editions of this book.This 3rd edition had a lot of matter repeated from the 2nd book.So someone who has read the 2nd edition will not gain much from this.That's why I have not given 5 stars.I personally enjoy this subject so looking forward to the next edition even if its a bit repetitive.

- derrick_nelson

If you are a speculator - buying stocks for making short time frame profits - this book is not for you. But if you are thinking of, or already are, buying stocks for building a portfolio of valuable assets which can make you wealthy in the long term, then this book is a must read for you. It's a well written book which clearly and comprehensively describes Warren Buffet way of thinking, and also why he is the greatest and wealthiest investor of all times.

- brynn_sanders

Great Book. I read this from the library 6 years ago, but wanted to have my own copy and read it again. It is an easy enjoyable read and I feel like I am listening to someone like my father. Very wise an approachable, not snooty.

- zara_watson

Muito bom esse livro. Leitura fácil. Ensinamentos muito valiosos. Fala dos "mestres" do Buffet, de como ele evoluiu e aprimorou esses ensinamentos, e qual foi o racional utilizado pelo Buffet em algumas das mais famosas compras que ele fez.

- reginald_torres

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