How Buffett Does It: 24 Simple Investing Strategies from the World's Greatest Value Investor

by James Pardoe

Book Overview

A concise, no-nonsense rulebook for investors looking to achieve Buffett-like results

Warren Buffett is one of the wealthiest investor in the world. Millions of independent investors follow his every move. But why Buffett? What signs does he see that others miss? And more important, what can investors do to follow Buffett's path to investment and financial success? How Buffett Does It explores the 24 primary rules Buffett has...

• Format: Hardcover
• Language: English
• ISBN: 0071449124
• ISBN13: 9780071449120
• Release Date: July 2005
• Publisher: McGraw-Hill Companies
• Length: 176 Pages
• Weight: 0.70 lbs.
• Dimensions: 0.7" x 5.4" x 8.1"

Customer Reviews

Buffett's philosophy is so simple, yet few follow it

Warren Buffett is by far the wealthiest and most famous investor of all time. Why not learn how he achieved his success and follow his example? This is a short book, but features the most important elements of Mr. Buffett's philosophy: * Buy businesses, not stocks * Buy companies with competitive advantages or moats * Practice inactivity, not hyperactivity * Choose simple and easy to understand businesses * View market downturns as buying opportunities (2008 and 2009 is a perfect and opportune time) * Concentrate your investments Other investment theories may try to persuade investors that it is impossible to beat the market because most money managers cannot. But do they ever tell investors to concentrate investments, meaning not to diversify too much? Of course not. Most money managers fail to beat the market because they own way too many investments. My favorite quote from this book on diversification is: "If you've found the right stock, why buy only a little?" I highly recommend this book and any other book that talks about Warren Buffett's investment style. We are fortunate enough that he is willing to share it with all of us. -Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

How Buffett Does It?

$1000 invested in Warren Buffett's Berkshire Hathaway stock in 1965 would be worth roughly $5 million today. This astonishing success didn't come through Buffett's use of high-tech computer trading models or intricate market timing systems.Instead, it came through his stubborn adherence to the time-honored fundamentals of value investing. This book is a step-by-step guidebook for investing like Buffett in any market environment. This value investing primer presents and expands on 24 primary ideas Buffett has followed from day one that include: maintain proper temperament; look for a company that is a franchise; don't look at the ticker; ignore the macro, concentrate on the micro; use all your horsepower; avoid the costly mistakes of others, etc. Buffett is now the richest man in the world. Drawing from Buffett's incredibly rich investment experience, this value packed guide will show you how to follow his examples to avoid diversification, instead, investing in a few enduring companies with predictable business models; beware of hidden costs, meaning everything from commissions on active stock trading to high mutual funds fee; invest in "old economy" businesses, "boring" companies that have been around for 50 years and will probably survive the next 50, and many others. Virtually every Buffett's principle came into play during the Internet stock bull market. Between mid-1998 and early -2000, as cautious veterans like Buffett were laughed at for missing the boat, Berkshire Hathaway's shares lost more than half of their values. Still, Buffett refused to buy internet stocks, quietly counseling patience, prudence and long term value. When the dust settled, Buffett was right again. This book shows you how to follow his lead and build a portfolio that is solid, easy to understand, and designed to provide you with tremendous long term returns without the short term headaches.

Excellent book on Buffett's investment style

An excellent primer on value investing. I never thought I would enjoy a book about investing as much I did this one. James Pardoe does an excellent job when he talks about the 24 simple investing strategies that has made Warren Buffett the second richest man in the world. This is not a how to book, but there is very good information in here that will put you on the right path to value investing. We all won't become a Warren Buffett but using these strategies will make you money and you can become your own financial advisor. Some so-called experts make the world of investing seem like rocket science and that is exactley what they want you to believe. Buffett's strategies are common sense and he has often said anyone with average intelligence can impliment them. However, as simple as they are, to become a good value investor you must do your homework, know the business you are going to buy and have the proper temperament. Buffett does not use any computer software to analyze a business, the only thing he uses a computer for is to play Bridge online with friends and family. However, he is an avid reader and this book tells you to do the same. Buffett reads six hours a day and the rest of the time he is thinking about what he just read. Before you buy a business you must read, read and read some more.

Dovetails Well with My Own Investment Philosophy

This book emphasizes the value and critical importance of clear, independent thinking in investment. Although at times it was very repetitive, which is not a bad thing per se, the most important lesson of the book was this: many investment professionals would like you to believe that you know nothing and that they know everything, and therefore, you should let them do your thinking for you. This is not the path to superior results; it is the path to sorrow. In truth, you must acknowledge two things- first, that you do know something, and the value of what you know, and second, that there are things that you do not know, some of which are important and must be determined, and others are unimportant. Most of us spend too much time trying to uncover unimportant information, and too little time pursuing important information. Moreover, most of us fail to acknowledge what we know that is of value and put too much stock in what others know that is not of any value. This book, thankfully without any equations to get in the way of clear thinking, tells you most of what you need to know to invest with a reasonable degree of safety and success. Successful value investing deals with knowns. It accepts a certain level of uncertainty, but always proceeds from the facts. In contrast, growth investing deals in speculation- reasoning without a firm basis in fact. It tends to fall victim to the illusion of precision, egregious hyperbole and lovely fantasies (which later turn out to be beautiful lies in retrospect). In essence, this book hammers home the message that the value investor knows what she knows of importance and also knows what she does not know of importance. Everything else is useless. This perhaps explains why most successful value investors tend to be introverted bookworms (they like to read, they don't talk much and they are constantly observing everything). How Buffett Does It presents 24 short, concise lessons on how to think and reason through the investment process. Written in simple, straightforward language to facilitate understanding, the book imparts all the goodies and gems of Buffettology- or the study of the investment techniques of Warren Buffett. My only complaint about the book resides in Chapter 20, which imparts the often cited Buffett advice of being fearful when others are greedy and greedy when others are fearful. I have always felt that this advice needs modification- specifically to something like 'Be cautious when others are greedy and observant when others are fearful'. One needs to know why others are greedy or fearful, and although one can always keep a safe distance when others are greedy (due to their inherent predictability, since their behavior will be consistent with their greed), given that fearful people can be quite dangerous (due to their inherent unpredictability), it behooves one to keep one eye on the situation making others fearful, AND one eye on the fearful people. Without a doubt, this i

Excellent, easy reading introduction to value investing

`How Buffett does it' is an excellent introductory book for people interested in value investing, or interested in Mr Buffett's investment methodology. The book is written in a very easy to read, and easy to understand manner and will give you a solid foundation for building your value knowledge investing further. There are no formulae on how to calculate the true value of a share, or worked examples that will help you do this for your own selected shares, which would have been nice to see as an appendix, which was why I didn't give the book 5 stars. If you have other Buffett books in your library then this book will probably recover old ground. If you're just starting out, then I would recommend this as one of the better books with which to start your education. Other reviews written on this book are fair, if you're looking for an in-detail how to book, then this is not your book, if you're looking for simple guidelines you can remember and apply easily this book is a worthwhile purchase.