Even though the thoughts in the book aren't unique to this book or novel, it does a fantastic job of highlighting significant practical aspects of value investing.

Excellent read!

Hisse fiyatlarini, ekonomiyi, faizi, secimleri tahmin etmeye calisma. Bunu yapmaya calisan insanlardan uzak dur. Tek yapman gereken verileri ve finansal durumu incelemek ve alimi buna gore yapmak. Fiyatlar duserken de ac gozlu olacaksin (herkes kacarken)

A wonderful glimpse into the mind and method of the world's greatest investor. Warren Buffet is considered a genuine maverick in the investment world. At 93 years old, his outstanding and unique investing record spans more than 65 years. This book showcases Buffets' methodology and upbringing, including the teachers that helped shape his unorthodox investment philosophy. Read and follow along through this mans incredible career, wins, and losses included! Recommended for anyone remotely interested in investing, markets, or economics.

A must-read book for anyone who is interested in investing.

My key takeaway is that Warren Buffer champions the value investment strategy, focusing only on the core value of the business, and ignoring day-to-day movements in share prices, the impact of the economic outlook, or any other external factors. He maintains a long-term perspective at all times, and never loses sight of the underlying value of a business. You have to be in the game long enough to reap the rewards.

Daha önce okumam gereken bir kitapmış.

No get rich quick scam
This is a book you will want to listen to several times. What is there to learn comes in several layers. th entertaining and insightful, this is well worth the money.

This is probably the most widely read book on the way Warren Buffet invests. And there are good reasons why. The Warren Buffett Way is a perfect introduction to this subject for the targeted audience of laymen and recent professionals. Even very seasoned investors will be reminded of some of the important philosophical thoughts behind Buffett’s investment process, and this makes reading the book worthwhile.

Robert G. Hagstrom began his professional career as an investment broker at Legg Mason. At the orientation on the first day, he received a copy of the Intelligent Investor by Graham and the previous year ́s annual report from Berkshire Hathaway. He got hooked. He decided to learn everything about the world’s greatest investor, Warren Buffett, in order to help his new clients improve their returns. His reading, understanding and implementing eventually made him write this book. I wish all brokers were like this. Nowadays he is a successful portfolio manager using the same concepts, working with legendary value investor Bill Miller.

The book’s content and outline is no surprise for the faithful Buffett follower. It begins with some of the learning Buffett got from his role models and friends: Ben Graham (Margin-of-Safety), Philip Fisher (high Return on Equity), John Burr Williams (“A cow for her milk; a hen for her eggs; and a stock, by heck, for her dividends”) and long- time partner Charlie Munger (eg. avoid complexity).
We also get a brief overview on the early days of Berkshire Hathaway, the important cash generating insurance business, and the background as to why Buffett believes in “buying a business” and not just stocks. He doesn’t even have a quoting machine.

The main part of the book is about Buffett’s investment guidelines according to Hagstrom. Together, they create a strong, disciplined investment process for the long-term investor that focuses on absolute return and is able to stand the pressure of sometimes quite high volatility and occasionally vastly negative relative return to a benchmark.

Buffett’s business tenets are to answer these three questions: Is the business simple and understandable? Does the business have a consistent operating history? Does the business have favorable long-term prospects? I believe these questions are the key to Buffett’s success. Without major failures the return increases dramatically.

Management is extremely important for Buffett, a lesson learned from Fisher. He is looking for these traits: Is management rational? Is management candid with the shareholders (if you have missed Buffett’s letters to shareholders, I envy you a great experience)? Does management resist the institutional imperative? This last question was probably the most fascinating for me re–reading the book after roughly 15 years. It is amazing how often managements copy currently trendy actions from competitors even though it’s a bad risk- reward proposition. Avoiding criticism today is preferred to long-term value creation.

For his financial tenets, Buffett ponders long-term averages instead of some impressive yearly results. According to Hagstrom, he focuses on return on equity, not earnings per share. He calculates “owner earnings” to get a true reflection of value. He looks for companies with high profit margins. And he analyzes if, for every dollar retained, the company has created at least a dollar of market value.
Sometimes, when “Mr Market” is stressed, value and price differ. Buffett’s value tenets are simple, but not easy to implement: Determine the value of the business and buy only when the price is right – when the business is selling at a significant discount to its value. Finally, we get Buffett’s thoughts on portfolio management: Stay focused! A diversified portfolio is a divided mind...

تو عصر متعلق به غول های تکنولوژی، عصر متعلق به اپل و مایکروسافت و بیل گیتس و زاکربرگ، همیشه یه نفر جزء پنج نفر اول لیست فوربس بوده. وارن بافت. از کامپیوتر و ایمیل استفاده نمی کنه، تو 89 سالکی عاشق همبرگر مک دونالد و کوکاست و تنها کسی هست که از طریق سرمایه گذاری بازار سهام جاش اون بالای لیست ثروتمندترینای عالمه. هرچی بیشتر راجع بهش می خونم، بیشتر می فهمم که در عین سادگی روش سرمایه گذاریش چقدر می تونه سخت باشه. چقدر سخته این حجم از صبوری. چقدر سخته مقابله با وسوسه سود کوتاه مدت. از رو دست نوابغ نمیشه تقلید کرد. شما فقط می تونید از تماشای جادوی مسی با توپ لذت ببرید.

In the end, Buffett triumphed using the power of rational thinking and conservative investing principles. His foes perished by their own hands, victims of herd mentality and folly.

À relire en étant plus concentrée et avec plus de connaissances sur le sujet

الكتاب جيد وانصح بقرائته لكل من يفكر فى التعامل فى أسواق الاسهم

كتبت هذا التعليق بعد قراءة النسخة العربيه من الكتاب المسماه ( الاستثمار فى الاسهم على طريقة وورن بفت) ... من ترجمة مروان ابو جيب وهى الطبعه الأولى وصدرت عن مكتبة العبيكان.

والحكمة تختصر ب الشراء في القيعان حينما يكون الناس في هلع من السوق والبيع في القمم. واختيار الشركات ذات الاستثمار.

“I am a better investor because I am a businessman, and a better businessman because I am an investor.”

The Warren Buffett way by Robert G Hasstrom focuses on investment journey, philosophy and principles of Warren Buffett.

Michal Mausbousinee rightly stated “There is a measure of both luck & skill in business, in sports, in investing. The only way to distinguish whether luck or skill prevails is by examining results over time. Luck may play a role in short run, but time will let us know whether skill was involved”. The exceptional journey and success of Warren Buffett in the field of investing over more than 50 years generating above market return is very much a statement that skill played a big role in his success.

Efficiency to beat the Efficient Market Hypothesis

According to Efficient Market Hypothesis, the combined efforts of millions of intelligent, motivated, objective and informed investors cause information to immediately be reflected in the market price such that assets will provide a risk adjusted fair return, no more and no less. Prices are never low or so high that they can be taken advantage of, and no investor can be capable of consistently identifying opportunities to benefit. One cannot beat the market. And its very much true most investors are unable to beat market.

But it’s also true that market efficiency is not such strong a force that it’s impossible to generate above market return. It is merely asserted that no one does it to a sufficient degree and consistently to disapprove the efficient market hypothesis.

Market frequently misprices stocks, usually because of human emotion of fear and greed. At the height of optimism, greed moves stocks beyond their intrinsic value, creating an overpriced market. At other times, fear moves prices below intrinsic value, creating an undervalued market. But investors like Warren Buffett, Ben Graham, Peter Lynch, George Soros are different. Their success shows that exceptional investors can beat the market through skill, not chance.
Ben Graham, Philip Fisher and Charlie Munger greatly influenced & nurtured Warren Buffett’s principles of investment.

Analytical, Unemotional and Contrarian
Warren Buffett is fiercely focused, analytical, unemotional and contrarian investor. He does not need to know and consider every data point, he only focuses on the things that he needs to know about the business. He does not need a cadre of analysts pushing numbers.

“Be earful when others are greedy, and be greedy when others are fearful.”

“Buy great business when they are having a temporary problem or when the stock market declines and create bargain price for outstanding franchises”

The principles or foundations of Warren Buffett investment are;
•tViewing Stocks as a piece of business. It completely changes the approach to understand the field of investing.
•tFocused low turnover portfolio is key to wealth creation over a long period.
•tInvest only in Circle of competence i.e. business that you can understand and analyze
•tMargin of safety in terms of both price and business are very important.
•tInvest in high quality companies with competitive advantage & pricing power.
Annual Letters as Chairman of Berkshire Hathway
Warren Buffett uses his Berkshire Hathway Annual Report to give overview of his investments and principles behind it to his shareholders. In addition to his own shareholders, these letters offer great educational value to understand the field of investing to the general public to become better investors.

Quantitative & Qualitative judgement of the business
Quantitative judgement of the business and qualitative judgement of the management is crucial to understand any business. Numbers, ratios, formulas are important but it’s not everything to understand business. Understanding of the products and services of the company that ultimately generate those numbers, the people managing the company & their decision making is crucial. The credibility, integrity and quality of the management is extremely important for long term success of any business.

Economics of the business
Overall economics of the business plays a very important role in the success of any business. The importance of sound economics of business is very much evident by the statement of Warren Buffett as;
“When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that stays intact. “

Long term approach towards business

Buffet looks for companies with long term favorable prospects, that are operated by honest and competent people, and are available at attractive prices. If people are drawn to an investment because of superficial notions rather than business fundamentals, they are more likely to be scared away at the first sign of the trouble and, in all likelihood, will lose money in the process.

“The speed at which a business’s success is recognized, is not that important as long as the company’s intrinsic value is increasing at satisfactory rate. In fact, delayed recognition can be an advantage. It may give you a chance to buy more of a good thing at a bargain price.”

Allocation of Company’s Capital
The most important management act is the allocation of the company’s capital. It is the most important because allocation of capital, over time, determines shareholders value creation. Retaining earnings in order to reinvest in the company at less than the average cost of capital is completely irrational. It erodes shareholders value over long term.

Honesty & Integrity of Management
Buffett holds in high regards managers who report their company’s financial performance fully and genuinely, who admits mistakes and share success honestly.

Low Portfolio turnout
It’s important to keep portfolio turnout ratio low. When a stock appreciates in price but is not sold, the increase in value is an unrealized gain. No capital gain tax is owed until the stock is sold. If you leave the gain in place, the money compounds more forcefully. Buffett rightly called this unrealized gain as interest free loan from the treasurer.

Reading & Understanding Business Reports
Reading & understanding annual reports, balance sheet, Profit & Loss statement of the business are far more valuable than reading analysts’ reports or trying to understand fluctuations in the share price.

Psychology & Investment
Psychologist have divided our cognition system as System 1 & System 2 thinking. System 1 thinking involves intuition and quick response, whereas System 2 thinking involves reflection and analysis. System 1 thinking where simple and straightforward ideas travel quickly, whereas System 2 thinking means conscious effort to understand and reflect, it is slow in nature. The slow moving ideas that require reflection and judgement are part of System 2 thinking.

Using System 1 thinking, the investor would tabulate a company’s price to earnings ratio, book value, and divided yield. Seeing that the ratios are trading near historical lows and the company has raised the dividend every year for the past years, the investor might quickly conclude that the stock is a good value.

Too many investors rely almost exclusively on System 1 thinking to make a decision, rather than engaging in System 2 thinking of understanding and analyzing the company by reading company’s annual report, annual report of competitors, understanding the economics of the business. But it’s much more laborious and requires some mental effort rather than simply figuring out current price to earnings ratio of the business.
Both System 1 thinking and System 2 thinking are important, the application of the two way of thinking described by Daniel Kanheman as thinking slow and fast depends on the context and scenario. Stock Market is a complex field; it requires System 2 thinking approach. The cases where available response time is low, System 1 thinking may be much more important i.e. sports, driving etc.