I've always seen the stock market as a place to 'trade'. A place to make a quick buck. After reading The Warren Buffet Way, it has definitely shifted my mindset about 'trading' to 'investing'. In Buffet's words, "You are buying a piece of the company".

Now this book is really good because it really tells what makes buffet genius in a very simple and sensible way.

It is good book for brainstorming of a investment ideas. It doesnt have any good numbers or formulas

1-don’t lose(companies selling for less than two-thirds of their value+ stocks have a low price-to-earnings ratio)
2-you should know the businesses you’re buying. The businesses should be simple and easy to understand, have an operating history that’s consistent, and offer a favorable long-term outlook.
3- Buffett looks for managers who take care of their finances rationally+ he looks for leaders who are candid and honest with their shareholders+seeks management that resists the urge to go along with the crowd, even when it means admitting mistakes or changing courses.
4-Buffett looks for a few specific things: returns on equity, or the comparison of operating earnings to shareholder equity; owner earnings, which are somewhat based on estimates but still considered closer to the whole story than cash flow; high profit margins; and increasing market value.
5-is the company a good value?
6-is the price good?
7- several psychological traps that cause investors to make bad decisions. Among them are simple concepts like overconfidence, loss aversion, and the lemming effect – which is the tendency to follow the crowd. overreaction bias. This is the tendency to recognize a few unrelated events as a trend when, in fact, they aren’t. Mental accounting. myopic loss aversion.
8-patience and rationality.

Some quotes from the book

It’s not enough to do the opposite of what others are doing. You have to understand what they’re doing; understand why it’s wrong; know what to do instead; have the nerve to act in a contrary fashion.

“My wealth has come from a combination of living in America, some lucky genes, and compound interest,” said Buffett.

Buying a security with borrowed money, in hopes of making a quick profit, is speculation, regardless of whether the security is a bond or a stock. An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.

If you paid $8 million for a company whose assets are $10 million, you will profit handsomely if the assets are sold on a timely basis. However, if the underlying economics of the business are poor and it takes 10 years to sell the business, your total return is likely to be below average. “Time is the friend of the wonderful business,” Buffett noted, “the enemy of the mediocre.” Unless he could facilitate the liquidation of his poorly performing companies and profit from the difference between his purchase price and the market value of the company’s assets, his performance would, over time, replicate the poor economics of the underlying business.

Buffett says a commodity business can make money if it has a cost advantage that is both sustainable and wide.

Remember Buffett’s notion: that after he begins buying shares in a company, he likes the stock market to delay its recognition, for that gives him the opportunity to buy more shares at bargain prices.

“If my universe of business possibilities was limited, say, to private companies in Omaha, I would, first, try to assess the long-term economic characteristics of each business,” says Buffett. “Second, assess the quality of the people in charge of running it; and third, try to buy into a few of the best operations at a sensible price. I certainly would not wish to own an equal part of every business in town.”

As Warren Buffett, his most famous student, explains, “There are three important principles to Graham’s approach.” The first is simply looking at stocks as businesses, which “gives you an entirely different view than most people who are in the market.” The second is the margin-of-safety concept, which “gives you the competitive edge.” And the third is having a true investor’s attitude toward the stock market. “If you have that attitude,” says Buffett, “you start out ahead of 99 percent of all the people who are operating in the stock market—it is an enormous advantage.”

“If you ask me to assess the risk of buying Coca-Cola this morning and selling it tomorrow morning,” Buffett says, “I’d say that that’s a very risky transaction.” But in Buffett’s way of thinking, buying Coca-Cola this morning and holding it for 10 years, that’s zero risk.

If you select stocks that will benefit only in a particular economic environment, you inevitably invite turnover and speculation. Whether you correctly predict the economy or not, you’ll find yourself continuously adjusting your portfolio to benefit in the next economic scenario. Buffett prefers to buy a business that has the opportunity to profit regardless of the economy. Of course, macroeconomic forces may affect returns on the margin, but overall, Buffett’s businesses are able to profit nicely despite the vagaries in the economy. Time is more wisely spent locating and owning a business that has the ability to profit in all economic environments than by renting a group of stocks that do well only if a guess about the economy happens to be correct.

Focus on Return on Equity, Not Earnings per Share - Most investors judge a company’s annual performance by earnings per share, watching to see if they set a record or make a big increase over the previous year. But since companies continually add to their capital base by retaining a portion of their previous year’s earnings, growth in earnings (which automatically increases earnings per share) is really meaningless. When companies loudly report “record earnings per share,” investors are misled into believing that management has done a superior job year after year. A truer measure of annual performance, because it takes into consideration the company’s ever-growing capital base, its return on equity—the ratio of operating earnings to shareholders’ equity.

Once you determine the value of a business, the next step is to look at the market price. Buffett’s rule is to purchase the business only when its price is at a significant discount to its value. Take note: Only at his final step does Buffett look at the stock market price.

One thing we can say with certainty is that knowledge works to increase our investment return and reduces overall risk. I believe we can also make the case that knowledge is what defines the difference between investment and speculation. In the end, the more you know about your companies, the less likely it is that pure speculation will dominate your thinking and your actions.

To the uninitiated, investing can seem daunting and inaccessible. But according to investment professional Robert G. Hagstrom, it doesn’t have to be. Hagstrom argues that novice investors should emulate the greatest investor in history—Warren Buffett—so that they too can earn above-market returns.

In his 2013 book The Warren Buffett Way, Hagstrom outlines and explains Buffett’s approach to stock market investing. Hagstrom argues that, rather than deferring to financial analysts, investors should follow suit with Buffett and assess companies along four dimensions—their financial prospects, their market value, their business model, and their management—to identify promising companies to invest in.

In this guide, we’ll examine how Buffett quantitatively and qualitatively evaluates companies to decide whether to invest, as well as his recommendations for managing your portfolio and avoiding psychological mistakes. We’ll also consider alternative approaches to investing and discuss updates to Hagstrom’s arguments since publication.

What I learned from this book is that investment is a long term thing, and all approaches Warren takes is fundamental analysis, with knowledge in economics, company management, and behavioral finance we can pick the good company to invest in and stick with it for the long haul. If we don't have the skills then in the meantime we could go with index fund investment and use dollar-cost averaging to gain earnings in the long term. It also talks about market efficiency theory is useless when human behavior comes into play. And the litmus test for buying stock is if we are only allowed to buy 1 stock in our lifetime what company stock would we buy, that would up the stakes for us as investors to do background study, etc to decide on what stock to buy. What I understand from it is buy stock and think of yourself as a company owner and not speculators. Because speculations are gambling. Buy to own a company so that you make earnings steadily, which is better than speculating and lose all your earnings.

"The Warren Buffett Way" by Robert G. Hagstrom is a profound exploration of the investment strategies and philosophies that have made Warren Buffett one of the most successful investors in the history of finance. While the book doesn't promise to unveil all of Buffett's closely guarded secrets, it delivers a comprehensive framework and invaluable insights into the principles that have guided his legendary career.

At its core, the book emphasizes the importance of a long-term perspective in investing. It emphasizes that successful investing isn't about short-term gains or speculation but rather the patient accumulation of wealth over time. Buffett's famed buy-and-hold strategy, rooted in thorough research and a deep understanding of the companies he invests in, is central to his success. Hagstrom delves into the concept of "economic moats," or competitive advantages, and how identifying businesses with strong moats can lead to sustainable profits over the long run.

One of the book's highlights is its exploration of the various mental models and frameworks that Buffett employs when evaluating investments. These include concepts like the intrinsic value of a company, the margin of safety, and the importance of a company's management team. Hagstrom skillfully breaks down these complex ideas into accessible, actionable advice for investors at all levels of expertise.

Additionally, "The Warren Buffett Way" offers valuable insights into the art of risk management. It discusses the significance of diversification, the dangers of overtrading, and the importance of staying within one's circle of competence. Through numerous examples and case studies, readers gain a clear understanding of how Buffett has navigated market volatility and economic downturns over the years.

Furthermore, the book pays homage to the intellectual influences that have shaped Buffett's investment philosophy. It draws from the wisdom of Benjamin Graham, Buffett's mentor and the father of value investing. It also touches on the contributions of other key figures such as Philip Fisher and Charlie Munger, who have played pivotal roles in shaping Buffett's thinking.

"The Warren Buffett Way" is more than just a book about investing; it's a guide to developing a mindset for success in the world of finance. It encourages readers to think critically, be disciplined, and focus on the fundamentals of a business rather than getting swayed by market noise or short-term trends.

In summary, while "The Warren Buffett Way" may not reveal all of Warren Buffett's closely guarded secrets, it offers a comprehensive and compelling framework for becoming a competent investor. It underscores the importance of a long-term perspective, the identification of economic moats, the use of mental models, and the prudent management of risk. By drawing from the wisdom of Buffett and his predecessors, this book equips readers with the tools and knowledge needed to make informed investment decisions and potentially achieve success in the complex world of finance.

Capolavoro! Utilissimo per capire ancora meglio le massime idee del grande MAESTRO. Le idee di Warren Buffett sul mondo degli investimenti andrebbero insegnate sin dalle scuole obbligatorie.
Temi trattati:
trovare poche aziende sottovalutate dal mercato.
Spegnere il pc e non interessarsi della quotazione (presso e valore non sono sinonimi!)
Tenere una azione almeno dieci anni meglio tutta la vita.
Scegliere bene l’azione da acquistare e valutare il management.
Se non sei bravo copra un etf o fai pac su un fondo ben gestito.
Detto ciò la semplificazione su come trovare una azienda valida che salirà nel lungo termine non la vedo assolutamente fattibile per il 99.99% degli investitori retail. E aggiungo neppure con l’aiuto di un consulente finanziario.
Le lezioni di Buffett si sposano benissimo
Anche per un investitore che non compra azioni direttamente ma si affida a intermediari finanziari.
La cultura finanziaria italiana è scarsa e da questa cultura ne discendono progetti realizzati o naufragati. Ecco perché tutti dovrebbero imparare almeno le basi.

My favourite snippets from the book:

The Warren Buffett Way
- Robert G. Hagstrom

Salad oil scan, American Express investment

The very nature of the textile business made big returns on equity improbable. Textiles are commodities, and commodities by definition have a hard time distinguishing theirs products from those of their competitors.

Learned valuable lesson about corporate turnarounds: They seldom succeed.

Efficient market theory suggests that analysing stocks is waste of time because fall available information is already reflected in the current price.

The essence of Security Analysis is that a well-chosen diversified portfolio of common stokes, based in reasonable pricing, can be a sound investment.

What is difficult to measure, is often badly measured.

If a company was perceived to be an attractive business and its superb management was predicting high future earnings, it would no doubt attract a good number of stock buyers. So, the investors will buy it and they will bid up the price and this P/E ratio. As more and more investors become enamoured with the promised return, the price lifts free from the underlying value and floats freely upward, creating a bubble that expands beautifully until it must finally BURST.

Benjamin Graham’s investment strategy:
1. Trading at 2/3rd or intrinsic value
2. Low P/E ratio
3. Margin of safety

Reversion to the mean: Many shall be restored that now have fallen, and many shall fall that now are in honour.

Philip Fisher’s investment strategy:
Company investigation through employees, management etc.

John Burr William’s investment strategy:
Discount cash flow (Discounted Dividend Flow)

Charles Munger’s investment strategy:
Munger believed in paying a fair price (not necessarily below thr intrinsic value) for quality companies.

Graham gave Buffett the intellectual basis for investing, the margin of safety, and helped Buffett learn how to master his emotions to take advantage of market fluctuations. Fisher gave Buffett an updated, workable methodology that enabled him to identify good long-term investments and manage a portfolio over the long term, and taught the value of focusing on just a few good com- panies. Williams gave him a mathematical model for calculating true value. Munger helped Buffett appreciate the economic returns that come from buying and owning great businesses.

Đây là một cuốn sách tổng hợp các nghiên cứu về phương pháp đầu tư của Warren Buffet - nhà đầu tư vĩ đại nhất thế giới khá thú vị và dễ đọc. Mặc dù phần tính giá trị doanh nghiệp theo chiết khấu dòng tiền làm mình hơi hoảng loạn

Yatırım ile ilgili en önemli yapıt AKILLI YATIRIMCI olarak anılır, yazarı Benjamin Graham. Oldukça kalın ve okuması zor bir kitaptır. Aynen akıllı bir yatırımcının olması gerektiği gibi, okumak için biraz sabırlı olmak ve aynı piyasalarda olduğu gibi konuların bir yerde birleşeceğini ve anlam kazanacağını ummak yani pozitif olmak gerekir.

Kendi şahsi düşüncem; bu kitap Benjamin Graham'ın en iyi öğrencisi ve iş arkadaşının piyasalara ve yatırımlara B.G'ın üzerine de ekleyerek daha çağdaş ve daha okunabilir versiyonudur.

Kitap, Warren Buffett'in ofisinde tek bir ekran bile olmadan, hisse senedi endeklerinin nasıl 20 puan üzerinde getirilileri yıllar, yıllar boyunca elde ettiğini yalın bir şekilde anlatmaktadır.

Scala'ya da ayrı bir saygı duruşunu borç bilirim. Türkçe kitapların genelinin aksine, yazım hataları ve anlam bozukluklarının neredeyse hiç olmadığı harika bir basım.

Bu tarz kitapları, özellikle enflasyonun insanların belini büktüğü, bizimki gibi gelişmekte olan ülkelerde herkesin okuması gerektiğine inanıyorum.

Umarım yorumum sizin de bu kitabı okumanıza katkıda bulunur.