The Essays of Warren Buffett : Lessons for Corporate America (book)

Those who read and listen to the wise, may one day become wise.
If you're serious about investing money for yourself or others, reading Warren Buffett is 101. Plain talk is often the result of complex thinking out of the box. Mr. Buffett's logic always seems to come back in favor after the latest hot investment trends lose their luster. Smart investing has always been about buying good companies when they're cheap and not in favor with the market, and then being patient.

Good book! Definitely one of the bests written about Warren Buffett.

Ocean Blue

By analyzing the essays Warren Buffet has written over the years, a reader can obtain a general, intuitive, though non-technical guide (for that Intelligent Investor) to Warren Buffet's investment method. Although appearing to be common-sensical in it's folksy mid-western prose, "Essays" explains in succinct and clear detail Buffet's fundamental analysis of businesses. Among these are a strict adherence to full disclosure of accounting transactions, the concept of economic goodwill, and confidence in conservative, factually confident and integrity filled management decisions. A solid, yet gap-filled introduction to Buffet's value-based investing principles.

This is a collection of valuable insights on how to determine real economic value, as opposed to accounting value, accounting gimmicks or financial nonsense.

All that and some humor too. Grat book!

For all of you investors who want to invest like Warren Buffett - that is, successfully - this is what you really want to read. There are a large and growing number of books out there that will claim to make you think/act/be like Buffett; here you can actually read his thoughts. As WB has often said, go to the source material (not the analyst reports, etc.) to make your judgments, and that is true in studying Buffett as well.

On top of that, Buffett is a much better writer than most of his biographers. The editor of this compilation has done a good job of organizing Buffett's writings into themes with a light hand. You get a good idea of how Warren thinks.

Buffett has an amazing way of penetrating the thick coating of B.S. that covers most of what passes for investment theory nowadays. He ruthlessly applies Ockham's Razor to cut things down to their essential truths; two of the most basic are that owning stock in a company is truly owning part of a business and that the future is full of uncertainty. Obvious, right? But, when you really absorb these concepts the answers to the questions of when and why you should buy a stock become much clearer. I won't attempt to boil down any more of his thoughts - you can find plenty of that elsewhere. Suffice it to say that, although I am a Chartered Financial Analyst and have advised others regarding investments for over 20 years, when reading this book I had many "V-8 moments" - where you want to slap yourself on the forehead and say "of course!"

While I first heard of WB many years ago (before he was cool), this book was my first significant exposure to his writings. He writes well, with wit and wisdom, and makes fairly complex subjects amazingly accessible to the uninitiated. I wish I had read this book much earlier, but I'm not sure if I would have been mature enough to put much of it into action anyway.

One thing to keep in mind when you hear about all the easy ways to make money from following charts, or are tempted to buy the latest idea emanating from your brother-in-law - or a talking head on CNBC: what Buffett does REALLY works. To put it crudely, it isn't an accident that he is, per Forbes, the 2nd richest man in the world - out of over 6 billion people. (I haven't seen any chartists make the list yet.) If you are really a serious investor, why would you NOT want to read what he has to say?

I can tell you why you probably won't actually put into practice most of what he says - it's no fun! It's no fun (for most) reading 10-Ks and 10-Qs. It's no fun keeping your own council and avoiding the crowd. Also, why wait, perhaps for years, for the "fat pitch" of a great company at a great price when you can get your kicks day-trading? After all, if most people were willing to wait until the odds were truly in their favor before they risked their money, lotteries would disappear and Las Vegas would be a dusty little village. Even those who acknowledge Warren's achievements and study his words will find putting his seemingly obvious concepts into action surprisingly difficult.

But that is how you actually earn the money.

Here's a story, retold by Buffett, that illustrates the herd mentality you must overcome. I quote:

Ben Graham told a story 40 years ago that illustrates why investment professionals behave as they do: An oil prospector, moving to his heavenly reward, was met by St. Peter with bad news. "You're qualified for residence", said St. Peter, "but, as you can see, the compound reserved for oil men is packed. There's no way to squeeze you in." After thinking a moment, the prospector asked if he might say just four words to the present occupants. That seemed harmless to St. Peter, so the prospector cupped his hands and yelled, "Oil discovered in hell." Immediately the gate to the compound opened and all of the oil men marched out to head for the nether regions. Impressed, St. Peter invited the prospector to move in and make himself comfortable. The prospector paused. "No," he said, "I think I'll go along with the rest of the boys. There might be some truth to that rumor after all."

-Warren Buffett, Berkshire Hathaway Letter to Shareholders, 1985