Warren Buffett's Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor

Warren Buffett's Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor

Posted by jack_miller | Published a year ago

With 118 ratings

By: Jeremy C. Miller, Tom Perkins, et al.

Purchased At: $29.99

Using the letters Warren Buffett wrote to his partners between 1956 and 1970, a veteran financial advisor presents the renowned guru's "ground rules" for investing - guidelines that remain startlingly relevant today.

In the 14 years between his time in New York with value-investing guru Benjamin Graham and his start as chairman of Berkshire Hathaway, Warren Buffett managed Buffett Partnership Limited, his first professional investing partnership. Over the course of that time - a period in which he experienced an unprecedented record of success - Buffett wrote semiannual letters to his small but growing group of partners, sharing his thoughts, approaches, and reflections.

Compiled for the first time, and with Buffett's permission, the letters spotlight his contrarian diversification strategy, his almost religious celebration of compounding interest, his preference for conservative rather than conventional decision making, and his goal and tactics for bettering market results by at least 10 percent annually. Demonstrating Buffett's intellectual rigor, they provide a framework to the craft of investing that had not existed before: Buffett built upon the quantitative contributions made by his famous teacher, Benjamin Graham, demonstrating how they could be applied and improved.

Jeremy Miller reveals how these letters offer us a rare look into Buffett's mind and offer accessible lessons in control and discipline - effective in bull and bear markets alike and in all types of investing climates - that are the bedrock of his success. Warren Buffett's Ground Rules paints a portrait of the sage as a young investor during a time when he developed the long-term value-oriented strategy that helped him build the foundation of his wealth - rules for success every investor needs today.

The 1st 5 chapters were almost worthless but the rest of the book more than made up for it.

The discussion of Generals, Workouts & Controls offers a nice introduction to value investing.

The author walks you through how Buffett took what he learned under Ben Graham & put his own stamp on it.

You'll learn how he ran the Buffett Partnership & subsequently made the transition to more qualitative investments which formed the Berkshire Hathaway.of today.

I'd recommend reading Graham's "Intelligent Investor" & Phillip Fushers "Common Stocks & Uncommon Profits" 1st & although there's no heavy math, you should probably understand how to read a balance sheet & income/cash flow statements.

After "Ground Rules" I recommend reading the full prtnership letters & "Berkshire Letters to Shareholders" for a more fully formed view of what WEB has done, followed by Graham & Dodd "Security Analysis" after which you should be analytically & temperamentally able of trying your hand at creating your own Berkshire.

Disclaimer: the wit & wisdom WEB has exhibited throughout his carreer are replicable by many but the temperament needed to execute is IMHO the most important factor in obtaining above average results. If you ain't disciplined & patient, your results will vary...

- addisyn_nguyen

The surprising thing about early Buffett which comes out clearly in this book is just how close he was to late Buffett. Perhaps not in terms of the types of companies that early Buffett bought in comparison to late Buffett and certainly not terms of the amount of capital he had to deploy. But early Buffett already had a very definite idea of the kind of investor he wanted to be and he has never deviated from that, in spite of the various siren songs that have bubbled through markets over his long career.

My only criticism with the book is Jeremy Miller's editorializing which prefaces many of the letters. It doesn't add much to the content of Buffett's letters and tends to repeat what is in them. Other than that, the criteria that Buffett applied to his investment decision making process in these early years - buying only value, eschewing market fads and frothiness, being patient and utterly frank with his investors, and compounding returns - emerges very clearly from these pages. These criteria are timeless and yet always timely and they find their fullest endorsement in the long trajectory of Buffett's career.

- ayan_miller

This is an excellent presentation of Warren Buffett's fundamental ideas. Miller provides excerpts from several of Buffett's early partnership letters, letters that were written prior to Buffett being Buffett. His fundamentals have not changed and history has proved the validity of his ideas. Miller also provides a fascinating insight into the personality of Buffett- his well known wit and folksiness are just as present then as they are now.

The book covers Buffett's three primary modes of investing- Generals, Workouts and Controls. It details his well known approach of value investing- finding mismatches between a company's intrinsic value and its market price and waiting for them to coincide. It also goes over his theories for owning companies and working with different partners.

It is truly amazing to read about the scale of Buffett's success. Year after year of beating the general market and year after year of him stating he had gotten luckier than expected.

The early story of Buffett is also interesting because it covers his closing down of his fund. And it shows his genuine care for all his investors providing them with alternate investment options and making himself available for any questions they may have.

- vera_cox

This book is worth it's wait in gold. It gives you access to the buffet partnership from it's the start in 1956 until the end in 1969 and there is a lot of content that I have never read before. the author had access to gather the information and it's a very good read that you won't be bored with.

- ronin_martin

Over the years I have read all of Warren's Partnership and Berkshire annual letters multiple times. And I have read a number of books on Buffett. This counts as one of the best. A novice investor wanting to improve him or herself would be well served by reading it--multiple times.

- kenny_gomez

Was fascinated by the insight into the thinking of Buffett. Definitely have a newfound respect for the man and look forward to learning more about him

- braelynn_ruiz

Good book to learn about Buffets philosophy on just about everything related to his investment style. However, do not expect it to be a critical analysis of Buffet's methods- the author shies away from any show of criticism. No wonder Buffet highly recommended this book in his latest annual letter!

- ali_martinez

Warren Buffet's insights into investing go beyond "how to" and are on the level.of wisdom. More importantly in the moment of Trump, Buffet's wisdom and insights are grounded in character and the best in American business. Reading this can make us richer in many levels.

- alexzander_white

Very informative. Its a little repetitive when the author repeats what is in the proginal letters but I dont see any way he could improve it. The inclusion of the originsl letters helps validate author's onsights, and the author does give valuable insights.

- noemi_evans

Excellent summary of Buffet's thinking and methods by Jeremy Miller and you get lots of quotes from Buffet' partnership letters. Shows how Buffet's approach evolved from Graham's margin of safety to buying great businesses and seeing them grow.

- marissa_richardson

Great book with a vast insight into the mind and motives of Warren Buffet, analysed, extrapolated and detailed through his Partnership Letters, the Ground Rules.

- louis_kim


- simone_campbell

The compilation of Warren Buffet letters during his partnership days. You can also get these letters as a PDF on Net. I suggest you read those letters as they are even if you buy this book. Those letters are great for retail investors. Buffet was small in 1950s and 60s. It is fascinating how he grew his portfolio, the kind of strategies he used in those days, challenges faced by him and how he overcame those. Except control investing I think private investors can try other strategies. Buffett proves that the diversification is not just buying 30 different stocks. he diversified his investing by using three different strategies which worked differently in different situations. That allowed him to make profits in every year during his partnership days. Yes he did not have single losing year! While other value investors had their ups and downs. Even Charlie Munger.
Not for nothing Warren Buffett is called the greatest investor who has walked on this planet so far.
Learn from Buffett and his strategies when he was small and hungry.

- liana_ross

This book is proof that I (and many others) will buy anything containing the word, "Buffett".
I could not finish it. I t was a cut and paste of some of Buffett's very old work, most of which we have all heard before.
I gave it an extra star out of respect for Mr. Buffett.

- sterling_wright

Exceptional book if you want to understand the early years of Warren. Highly recommended!

- elliot_stewart

Ensinamentos valiosos, muito bom pra quem quer aprender mais sobre como funciona a cabeça de Buffet assim como seu modelo de investimento. O começo é meio básico mas o final compensa tudo

- madilyn_nguyen

I enjoy most of the books I read about Warren Buffett. He is probably the world's greatest investor. This book gives me an insight into the way he looks at investment problems. It helps me to channel my own investment philosophy. Helen Crichton.

- frankie_ross

Great read and I would read again. Valuable insight into the greatest investor of our time. His ability to process decisions and do the right thing consistently and stay true to his morals is unprecedented

- sadie_peterson

Really explains the meaning of value investing. Nice book for getting to know about the stock markets wizard warren buffet style of choosing stocks.

- miah_myers

Definitely a good book. Beneficiary to those who have some exposure to the market, beginners should read some more literature before reading this book.

- bonnie_long

Good book to know how warren buffet does investment

- trace_walker

Man sollte es lesen wenn man für Partner anlegen will nicht für bezahlenden Kunden sondern für Anleger ! Man erkennt die Denkstrukturen eines Anleger für faire Performance als Investor

- chance_gutierrez

Insightful compilation from early days of BPL. Evolution of process is shown succinctly.

- florence_richardson

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