The Warren Buffett Way: 3rd Edition

The Warren Buffett Way: 3rd Edition

Posted by jack_miller | Published a year ago

With 271 ratings

By: Robert Hagstrom, Stephen Hoye, et al.

Purchased At: $29.95

Warren Buffett remains one of the most sought-after and watched figures in business today. He has become a billionaire and investment sage by buying chunks of companies and holding onto them, managing them as businesses, and eventually reaping huge profits for himself and investors in Berkshire Hathaway. The first two editions of The Warren Buffett Way gave investors their first in-depth look at the innovative investment and business strategies behind the spectacular success of living legend Warren E. Buffett. Tracing Warren Buffett's career from the beginning, Hagstrom told listeners exactly how, starting with an initial investment of only $100 Buffett built a business empire and has an estimated net worth of $44 billion. The Third Edition of The Warren Buffett Way will focus on the timeless principles and strategies behind Buffett's extraordinary investment success. There will be new chapters on the important distinctions between investment and trading and an examination of the most successful disciples of Warren Buffett. Some less important material will be deleted and the overall focus will be to create an edition that will stand the test of time, distilling Buffett's success formula in a way that will provide value to listeners for decades to come.

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.

- aspen_lewis

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.

- ray_rogers

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.

- david_thompson

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).

- draven_hughes

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

- raina_richardson

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.

- lauren_mitchell

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.

- porter_ross

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.

- landon_cruz

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

- noelle_wright

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.

- kairo_williams

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

- clyde_miller

Great book. A must read

- owen_ramirez

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

- aiyana_carter

Great Book

- ada_lee

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.

- annalee_martin

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.

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...

- anabelle_reed

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.

- chaya_patel

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!

- tobias_reed

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.

- johnathan_cruz

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.

- lorelai_baker

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.

- karson_bennet

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.

- kiera_rogers

More insightful. One can transform after reading. How he picks the stock analyzing the cash flows with focused LT investing. Was satisfied reading such a great book of a great man. Will read again and again.

- averi_cooper

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