Averie Patel

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Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage
Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage
This book teaches a reader who has no economic degree, in a very friendly manner, about the three main parts of a financial statement: balance sheet, income statement and statement of cash flows. The lessons are provided in a very detailed way, with tables and step-by-step explanations. This is in contrast to "The Little Book of Value Investing" by Christopher H. Browne and Roger Lowenstein, which also gives a framework to analyze financial statements for successful stock-picking, but does not teach the basics of understanding each and every line in the statements.

This book is very different from the student's manual of corporate finance. It is very practical. It has a separate chapter for every main item of a statement, and explains with examples and advises how it affects prospects of the company and whether the stock of the company should be bought to get the extraordinary long-term results.

This book also describes the differences between Benjamin Grahams way of picking stock and one derived by Warren Buffett.

Many amateur investors are losing money because they have no basic education at least to understand a financial statement. They pick fashionable, hot stocks, or just stocks of a company which product they like. For example, they are passionate listeners to satellite radio and just because of that they buy "SIRI" regardless of the negative equity and negative operating income. Refinancing the huge debt in the credit crunch of 2008 is a challenge. This book will help the new investors to understand these issues and to make smarter stock picking. Of course, this book is not a panacea. Of course, there is always risk. The financial intelligence improves the odds. Thus, what is risky for one person is less risky to someone else. That is the primary reason to invest more in one's financial education than in the stock. The smarter you are the better chance you have of beating the odds. It is not gambling if you know what you are doing. It is gambling if you are just throwing money into a deal and praying. The idea in anything is to use your technical knowledge, wisdom and love of the game to cut the odds down, to lower the risk. So let this book will be brick in the foundation of financial education.

In addition to this book, I can recommend the other (previous) books by Marry Buffett. They are very useful for the right stock-picking. I also recommend "Value Investing With the Masters" by Kirk Kazanjian and "The Only Three Questions That Count" by Kenneth L. Fisher.

If you want to read something good about Warren Buffet's life and his investment strategy, I can recommend "Buffett: The Making of an American Capitalist" by Roger Lowenstein and "The Snowball" by Alice Schroeder.
Warren Buffett: The Life, Lessons & Rules for Success
Warren Buffett: The Life, Lessons & Rules for Success
There is nothing worthwhile reading in this entire book. I have read many financial books, including biographies of well known investors. This book reads like a sloppy wikipedia article (seemed like it was seriously written at a 2nd grade reading level). There are only a handful of facts about Warren's early life that keep getting repeated over and over. The "life lessons" are cliche after cliche with no concrete or truly inspirational ideas. Moreover, there is no author or publisher even listed within the entire book. This is clearly some sort of scam book haphazardly put together to earn a few bucks by enticing people to buy it by putting Warren Buffett's picture on the cover. Save your money, read his wikipedia page for more detailed history, and buy a real book about Warren Buffett.
The Snowball: Warren Buffett and the Business of Life
The Snowball: Warren Buffett and the Business of Life
Warren Buffett is world-famous for his success at investing. A native of Omaha, Nebraska, the son of a stock broker who served several terms in Congress, he began in business very young selling candy to neighbors and delivering newspapers but his real passion was reading everything he could get his hands on about investing in stocks and bonds, learning about businesses, and investing according to a carefully thought-out investing philosophy derived from the authors of several books he read who became his mentors at Columbia Business School-Benjamin Graham and David Dodd.

This biography, written with the cooperation of Buffett by Alice Schroeder, an author with a Wall Street background, is a thoroughly-researched account of his life and career, beginning with his childhood in Omaha and following him through his education and his career as an investor and money-manager who, through the vehicle of his firm Berkshire Hathaway, made himself and many of his investors very wealthy. Indeed, in 2008 he was named the richest man on earth.

The book chronicles his philosophy of business and many of his quirks - he favours Coke over wine and burgers and steaks over almost any other type of food - and delves into numerous accounts of his investments which have spanned cocoa-beans, textile mills, Wall Street investment banks, and railroads, among many others.

Buffett comes across as an almost asocial machine constantly sifting through businesses to find the best bargains to invest in. With family and friends he seems remote and absent-minded, uninterested in things that fall outside the world of business. He seems never to have read a novel, for instance, or a poem. When one of his friends points out a Picasso sketch on the wall at his friend’s house he says he hasn’t noticed it even though he’s been going there for 30 years. He’s also kind of funny about money, which I suppose is not surprising given who he is. That said, he does change over the course of his life in some respects and the book does a good job of describing it, showing, for example, how he was persuaded to be more generous towards his children, and describing the way he went from believing that his greatest service to humanity was through amassing a huge fortune to believing that giving money away sooner was preferable.

If this book has a limitation it is that it shies away from offering a more definitive interpretation of its subject that would aid the reader in coming to a deeper understanding of the real Warren Buffett. The book offers an account of the complete Buffett mythology: his folksy, Midwestern values, his common-sense voice, his sage wisdom about business. It reinforces his philosophy of investing in undervalued companies with excellent long-term prospects, his injunction, via Graham, to “be fearful when others are greedy, and greedy when others are fearful.” It charts his growing fame, his circus-like shareholder meetings, his numerous appearances in the business press and on business TV networks, his love for Cherry Coke and Gorat’s steakhouse. And while the mythology is probed and dissected in some ways - yes, he’s lived in the same house since 1958 but Schroeder points out that he has remodeled it since then - I don’t think the reader will come away from this book with a true understanding of what’s driving him, at least not with a view or interpretation of this that has the endorsement and exposition of the author.

If I had to take a guess, the primary influence on Buffett seems to be his father, Howard Buffett, a stock broker from Omaha whose civic values led him to Washington D.C. where he served in Congress during Warren’s youth. His mix of patriotism and business seems to have greatly influenced his son whom he took on a visit to the New York Stock Exchange in 1940 at the age of ten. Buffett says he wanted money so he could be “independent” and didn’t like to do manual labor but so do lots of us and he didn’t stop making money once he’d become independent so there is clearly more to it than that. It’s this sort of reading of Buffett I wish there was more of in this book.

The book is nonetheless filled with as much superficial detail as you could want about Buffett. At 816 pages there’s tons of information about his whole life and world, it perfectly captures Buffett’s voice, as well as separate accounts of many important times in his life from the perspective of his family and friends. Schroeder has written a good valuation report style biography of the man and I suppose in many ways that’s the type of biography most suited to this life.
Buffett: The Making of an American Capitalist
Buffett: The Making of an American Capitalist
The gain in net of Berkshire Hathaway, the company led by Warren Buffet, worth during 2006 was $16.9 billion, which increased the per-share value of 18.4%. Over the last 42 years value has grown from $19 to $70,281, a rate of 21.4% compounded annually. Consider that $16.9 billion is a record for a one-year gain in net worth - more than has ever been booked by any American business, leaving aside boosts that have occurred because of mergers. Of course, Berkshire did not outperform S&P500 constantly. In 1967, 1975, 1980, 1999, 2003, 2004 the S&P gave better performance, and in 2001 Berkshire even was at a loss of 6.2%.

This book, "Buffett: The making of an American capitalist" covers very deeply the values that led Warren Buffet during his life from his early childhood. The book is not only a biography per se, but a good manual on investing, that uncovers most aspects, with the detailed explanations and samples, of investing.

This book also covers very well personal traits of Warren Buffett, his attitudes toward parents, sister, friends, parents, children and wife. For example, Warren bought a farm and rented it to his son Howie on standard commercial terms. The farm was a joyful refuge to Howie, but he couldn't get Warren to share the experience with him. "I can't get him to come out and see how the crops are going", Howie said plaintively. Warren went only twice in six years. He would laugh off Howies's invitations, saying, "Send me a rent check, and make sure it's big enough". Though he had been thoughtful enough to buy the farm, he couldn't give Howie the fatherly recognition that he craved in other than financial terms.

In his investment strategy, Warren uses the concept that he calls "Intrinsic value" of a company. According to Warren Buffet, intrinsic value is an all-important concept that offers the only logical approach to evaluating the relative attractiveness of investments and businesses. Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.

Here is what Kenneth L. Fisher wrote about Buffet's investment strategy: a quality standing out about Mr. Buffett is his ability to morph. If you read his materials from the 1960s, he said very different things than in the 1970s and early-1980s. Early on he was buying dirt-cheap stocks by simple statistical standards and typically smaller stocks--which would today be referred to as smallcap value (although that term didn't exist until the late 1980s). Later he bought what he called "franchises." Then he entered a period of buying great managements of big companies and being a long-term holder--otherwise thought of as big-cap growth today--that many ascribed to the influence of my father coupled with Charlie Munger. When Mr. Buffett was buying Coke and Gillette, you couldn't quite reconcile those activities with the kinds of things he owned two decades earlier. Then, amazingly, seven years ago, at just the right time, he was buying smaller things dirt cheap again just as value came back into play as the twenty-first century began. I have other comments about Mr. Buffett throughout this book but I'd like you to see, while he never lost the core of what he was doing or what he was looking for, he tactically morphed steadily over the decades. Trying to freeze his tactics from any decade and replicate them in the next few would never have led you to his actual actions.

In addition to this book, I also recommend the letters to shareholders written by Warren Buffet, which can be taken from the website of Berkshire Hathaway. If you take an audio record of this title, it will not be as good as the textbook. The audio is more biographical and pays less attention to the investment education of the listener.
Warren Buffett on Business: Principles from the Sage of Omaha
Warren Buffett on Business: Principles from the Sage of Omaha
With the main exception of a relatively small textile producer known as Berkshire Hathaway, which Warren Buffett bought outright and which became the springboard for his investing career, the earlier part of Buffett's long and successful career was mainly devoted to non-controlling investments in companies, versus buying whole companies. Thus, today many people think of Buffett as "the world's most successful investor." However, Buffett's investing skills are not the primary topic of this relatively brief and easy reading book (although there is one chapter on personal investing). This book, written by Richard Connors and based on a class he taught about Buffett at the Washington University in St. Louis Lifelong Learning Institute, is devoted to describing Buffett's management activities as CEO of Berkshire Hathaway. That's not a bad idea at all, given that over the years Buffett has gradually placed comparatively less emphasis on Berkshire's investments (which today include the likes of American Express, Coca-Cola and Wells Fargo) and greater emphasis on Berkshire's growing stable of wholly-owned subsidiaries. Indeed, the list of owned companies, like GEICO, International Dairy Queen, Shaw Industries, FlightSafety, Borsheim's Fine Jewelry, Nebraska Furniture Mart and The Pampered Chef, among numerous others, has grown quite large.

The prime source for this book--by far--is Buffett's annual letters to Berkshire's shareholders, written over the last 40 years. Indeed, if you were to count words, my guess is that 95% or more of this book is simply the reproduction of Buffett's comments in his various letters, organized by Connors, the book's author. So if you have read Buffett's letters over the years (an exercise I would recommend to almost anyone interested in business or investing), then you won't find much new material in this book, save for excerpts from occasional interviews with Charlie Rose or excerpts from some of Buffett's other interviews or comments.

Connors has organized Buffett's shareholder commentaries into chapters that address the various important issues of corporate management: executive compensation, time management, assessment of risk, corporate governance and culture, crisis management, capital allocation and shareholder communication, among others. Buffett's comments are interesting, valuable and candid, and he is a very clear and entertaining writer. There is some human interest material, such as an account of Buffett's 1951 Saturday trip to Washington, DC to visit the offices of GEICO (because his mentor, Benjamin Graham, was the chairman of the company). As the somewhat well-known story goes, Buffett pounded on the door to GEICO's locked building, until a custodian finally led him to meet Lorimer Davidson, an assistant to GEICO's president at the time. Davidson, who would go on to become CEO of GEICO, took the time to educate young Buffett on the power of direct marketing of insurance, and years later Buffett would go on to buy the whole company.

In short, although there is precious little new material provided here (hence the four-star rating, not five), this is a very interesting book, and it is interesting primarily because it was essentially written by Warren Buffett, one of the most successful investors--and corporate managers--of all time.
The Warren Buffett Way: 3rd Edition
The Warren Buffett Way: 3rd Edition
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.
Berkshire Hathaway Letters to Shareholders
Berkshire Hathaway Letters to Shareholders
There have been critics who have written reviews on here that this book is no different than going online and printing out all of the shareholders letters and there are others that say that you should pick up Lawrence Cunningham's version because that version is editorialized and I am here to tell you that I have done all three, not because anyone has told me or I recommended it, but because I have thoroughly entrenched myself in the study of Warren Buffett, Charlie Munger and Berkshire Hathaway and I will tell you this edition and book is an outstanding treasure and amazing addition to anyone's library, full of awesome information and knowledge about the inner workings of Berkshire Hathaway. I'm actually very sorry I didn't get it much, much sooner. I cannot recommend this book strongly enough...10 STARS!!!!!
The Essays of Warren Buffett: Lessons for Corporate America, Fifth Edition
The Essays of Warren Buffett: Lessons for Corporate America, Fifth Edition
Lawrence A. Cunningham opens this book with an appropriate excerpt from the essays of Michel de Montaigne: "The speech I love is simple, natural speech, the same on paper as in mouth; a speech succulent and sinewy, brief and compressed, not so much dainty and well-combed as vehement and brusque."

There is no shortage of books on Warren Buffet. It is an interesting state of affairs: numerous writers, pundits, and other Warren Buffet "experts" opining on the life and investing decisions of perhaps the greatest investing and capitalist "expert" of all time.

Others opining on the life of a genius is often necessary, when it comes to understanding the broader impact that genius has had on society. A masterful investor, scientist, engineer, or whatever is not also necessarily always an effective writer and communicator. Mr. Buffet, however, is a rare breed.

Not only has Mr. Buffet, across his lifetime, compiled the most impressive track record capitalism has ever produced- one of growth, achievement, societal awareness and improvement, but he can also write. He writes in a language that is, in the words of Montaigne, "simple...succulent and sinewy, brief and compressed...brusque."

Lawrence A. Cunningham through this book expresses an important truth- when a man such as Mr. Buffet writes with the clarity and power that he does, not much benefit is given to the reader by adding words on top of what is already clear and powerful prose. If one is trying to make sense of Mr. Buffet and his philosophies, the best place to start is with Mr. Buffet's own "sinewy" words, which are presented, unadorned except with a short preface, in this book.

"Essays" is a bit of a misnomer for the content of this book. In fact, this book is actually a compilation of excerpts from the Annual Letters Mr. Buffet has written to the shareholders of his company, Berkshire Hathaway, over the last thirty plus years. Worth noting, these very letters are available, in their entirety, on the World Wide Web for free. Something, however, is definitely gained through reading Mr. Buffet's words as Mr. Cunningham has arranged them.

Mr. Cunningham has arranged this book by subject, rather than time- and the effect is pleasing and effective. The way that Mr. Cunningham chose to arrange Mr. Buffet's letters is into the following categories: Corporate Governance, Corporate Finance and Investing, Alternatives to Common Stock, Common Stock, Mergers and Acquisitions, Accounting and Valuation, and Accounting Policy and Tax Matters.

The effect of Cunningham's carefully-chosen delineations is a book that has more the feel of an educational guide, than a story of Mr. Buffet's investing career and his company, Berkshire Hathaway.

What emerges out of this educational guide is the philosophy and teachings of a gifted Professor and practitioner. No matter whether Mr. Buffet is waxing poetic on business or outlining his scruples over how corporations account for equity stock options, out of his writing emerges a consistent and eloquent philosophy on the "right" and effective approach to business, investing, capitalism, and life.

The "Buffet Way", perhaps impossible to summarize fully in a few short sentences, is stoic and original. The practitioner of this philosophy is one who stands apart from society, ignores any "institutional imperative" that may impede rational decision-making. The "Buffet Way" is a mode of analysis that knows the bounds of its own limitations, and is free of emotion. The Buffet Way demands that every decision require a "margin of safety" or room for error.

Most importantly, Mr. Buffet's view of investing, and particularly of investing in the stock market or in other marketable securities, grasps a simple but important concept that is lost on so many market pundits and practitioners: stocks are not abstractions. Stocks are certificates that represent a share of ownership in an underlying business. Too often people don't look through stocks to the underlying business they represent. This book aptly is subtitled, "Lessons for Corporate America", because Mr. Buffet is after all an evaluator of businesses.

Stocks and their prices are only relevant when they become disjointed, in a favorable way, from the underlying realities of the business they represent.

To think the "Buffet Way" takes more, though, than knowing the concept's basic precepts. It takes discipline, and a stoic fight against the animal spirits that so often lead investors astray. This book and its precepts are worth reading, and rereading, until hopefully its lessons are engrained in the psyche in a way that they become impossible to ignore.
The Intelligent Investor Rev Ed.
The Intelligent Investor Rev Ed.
*Edition: I found commentary very useful (though often distracting). If you are not a professional - you'll appreciate the commentaries and epilogue - read it first? It's very inspiring.

*Book: "You either get the idea in the first five minutes, or you don't get it at all", said Warren Buffet in the epilogue.
- I would add - you don't necessarily need to read all 550 pages, but you must read through the idea of value investing - and it will change your way of looking at the world.
- I always felt confused and amazed by listening to all the ridiculous fuzz that comes from the Wall Street through TV and the internet. The book explains why.

🔴Several rules I noted into my keep:
፨ - Investor buys the business [based on its price/value], speculator buys the stock [based on an absurd believe that he can foresee where the stock price will go].
፨ - The best way to earn adequate return without any trouble whatsoever is to invest into cheap (low maintenance cost) indexes; use dollar averaging (buy every month instead of once at a random point of time) for smoothing the luck involved.
፨ - For enterprising investor (willing to spend much more time), look for a diversified list of bargain issues (at least 30 issues, business values (i.e. net current asset and other related metrics) is below market cap)
፨ - During the bubble, hot industries and companies are getting overpriced. That could only be financed from somewhere. Partially that money are coming from well established old economy companies that lose the appeal. Thus, invest in such old economy companies while bubble grows, as soon as the bubble burst - undervalued companies would rise back.
፨ - Don't ever buy IPOs! (See chapter for compelling arguments)
፨ - Don't consider companies that do not pay dividends. Dividends - money firm pays you for providing capital, they belong to you. They cut a piece for reinvestment - payout ratio. If firm doesn't pay dividends - invest all into growth so you could profit later - that's a speculation. Moreover stock price would be more volatile because it should now rely on future rather than current prospects.

The Intelligent Investor, by Benjamin Graham, is probably the most important and influential value investing book ever written even Warren Buffet described it as “by far the best book ever written on investing”.

፨ If you could only buy one investment book in your lifetime, this would probably be the one.
፨ It had been 6 months since I last read The Intelligent Investor. I have enjoyed my personal “refresher course” in value investing.

🔴Objective of The Intelligent Investor Book
፨ Benjamin Graham’s objective was to provide an investment policy book for the ordinary investor.
፨ He succeeded in putting seemingly hard concepts into terms that could be understood and, more importantly, implemented by the average investor.
፨ The typical investor has a tendency to “follow the market” when they should be employing portfolio risk management strategies. Instead, Graham gives us an alternative based on fundamental stock analysis.

፨ The goal is to learn how to avoid the pitfalls of allowing our emotions to control our investment decisions. Rather, Graham provides the foundation for making businesslike decisions.

🔴The Intelligent Investor puts special emphasis on teaching:
1. Risk management through asset allocation and diversification.
2. Maximizing probabilities through valuations analysis and margin of safety.
3. A disciplined approach that will prevent consequential errors to a portfolio.

🔴If you have any Doubt regarding this Review or this Product, then Feel Free to Contact me or Just ask me by commenting below.I Hope this Review was Helpful.Write reviews, help others, happy shopping.
Thank You for Reading this Review.
-●➽ʙʜᴀᴠᴇsʜ ʙ.ᴏ.ᴛ 🔥
Warren Buffett’s 3 Favorite Books: A guide to The Intelligent Investor, Security Analysis, and The Wealth of Nations (Warren Buffett's 3 Favorite Books Book 1)
Warren Buffett’s 3 Favorite Books: A guide to The Intelligent Investor, Security Analysis, and The Wealth of Nations (Warren Buffett's 3 Favorite Books Book 1)
Yes, the title and marketing posture is shamelessly mercenary, calculated to cash-in on the Buffet name and brand.

Yes, the first section really and truly is about a kid running a lemonade stand.

But.

I'm glad I bought and read the book.

Surprisingly, given the bait and switch of using Buffet's name and branding and given that his three "favorite" books are barely mentioned, their content not delved into, and serve only as launching points -- the author has written an honest and sincere book.

I'll repeat that: This is an honest and sincere book.

And useful.

If, like me, you grew up without anyone actually TEACHING you about money, let alone stocks and bonds, the extended and hookey lemonade stand metaphor actually works. You WILL learn the fundamentals of stocks and bonds by examining the kid's adventures in retailing lemonade. (Our schools still do not teach students about money. Osmosis is good for nourishing plants, but if you really want to help people avoid poverty and pain and dependency, teach them about money; what it is, why it is, how it can be used. This author seems to be attempting to do just that, and for those well-intentioned reasons.)

The author does the math, and breaks it down so you can do the math on yor own. You could of course read Graham's classic, The Intelligent Investor, and do the math on your own. But gee whiz, it is always easier faster and more efficient if you have a decent teacher to help you. And, if you're like me, you can read through the whole book (it's not too long) and then go back and do the math, applying it to the real world of companies you're considering investing in. (I do think it would be best to read Graham's Intelligent Investor BEFORE reading this book. Going to the source text first is almost always better than reading what has been derived from that source.)

All of this is my longwinded way of saying, if you are hesitating and not sure if you should buy this book, go ahead. Put aside its used car salesman title/marketing. The content (the author's work) is forthright, honest, transparent. (Besides, you have 14 days to return the book for a refund if your experience is different from mine!So what's to worry? Go for it. ;-)

PS: I haven't tried his videos yet, but probably will.

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