Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The Worlds [Paperback]

Mary Buffett (Author), David Clark (Author)

Book Description

Release date: June 8, 1999

HOW WARREN BUFFETT DID IT -- AND HOW YOU CAN TOO

In the world of investing, the name Warren Buffett is synonymous with success and prosperity. Building from the ground up, Buffett chose wisely and picked his stocks with care, in turn amassing the huge fortune for which he is now famous. Mary Buffett, former daughter-in-law of this legendary financial genius and a successful businesswoman in her own right, has teamed up with noted Buffettologist David Clark to create Buffettology, a one-of-a-kind investment guide that explains the winning strategies of the master.

* Learn how to approach investing the way Buffett does, based on the authors' firsthand knowledge of the secrets that have made Buffett the world's second wealthiest man

* Use Buffett's proven method of investing in stocks that will continue to grow over time

* Master the straightforward mathematical equipments that assist Buffett in making investments

* Examine the kinds of companies that capture Buffett's interest, and learn how you can use this information to make your own investment choices of the future

Complete with profiles of fifty-four "Buffett companies" -- companies in which Buffett has invested and which the authors believe he continues to follow -- Buffettology can show any investor, from beginner to savvy pro, how to create a profitable portfolio.

Editorial Reviews

Amazon.com Review

Americans are infatuated with the stock market. The number of households that own stock has increased from around 20 percent in the early 1980s to over 40 percent today. The market offers the hope of quick wealth and early retirement, and just about everyone who is in the market is looking for an edge, from sources such as CNBC and Wall Street Week to the Beardstown Ladies and "The Motley Fool." So it should be no surprise the most successful investor of our time--Warren Buffett--has been the subject of dozens of books and magazine articles. The value of Buffett's company, Berkshire Hathaway, has increased from $18 per share in 1965 to over $70,000 per share today. The interest in Buffett has spawned an approach to investing called "Buffettology," which is the subject of a book by the same name written by Buffett's former daughter-in-law, Mary Buffett.

In Buffettology, Mary Buffett, with the help of David Clark, details Warren Buffett's approach to investing. It's a style of investing based on the work of Benjamin Graham and one that requires a quality that most investors lack--discipline. Mary Buffett writes, "As you read through this book you will come to see that having a business perspective on investing is more about discipline than philosophy.... In short, other people's follies, brought on by fear and greed, will offer you, the investor, the opportunity to take advantage of their mistakes and benefit from the discipline of committing capital to investment only when it makes sense from a business perspective.... You will find that almost everything that relates to business perspective investing is alien to Wall Street folklore.

Buffettology examines Buffett's methods for valuing companies and selecting stocks--it even encourages you to buy a calculator and work through the valuation formulas that Buffett uses when researching companies to buy. The book not only serves as a useful guide to understanding how Buffett invests, it's an excellent primer to investing in stocks, whether you plan to become a Buffettologist or not. Highly recommended. --Harry C. Edwards, Business editor --This text refers to an out of print or unavailable edition of this title.

Review

Stevin Hoover Hoover Capital Management Absolutely the best book ever written on Warren Buffett's investment methods.

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Product Details

• Paperback: 320 pages
• Publisher: Scribner; 1st Fireside Ed edition (June 8, 1999)
• Language: English
• ISBN-10: 068484821X
• ISBN-13: 978-0684848211
• Product Dimensions: 6.3 x 0.8 x 8.6 inches
• Shipping Weight: 9.6 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (114 customer reviews)
• Amazon Best Sellers Rank: #102,766 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

56 of 58 people found the following review helpful

3.0 out of 5 stars Both an enjoyable read and a disappointment. January 24, 2006

By Real Name - Real Name

Format:Hardcover

This book is a mixed blessing. I have read a stack of investing texts over the last 10 years, and this is the first to introduce the concept of purchasing a stock on the basis of a calculable return, as one would any other investment such as a bond or T-bill. For this alone the book is worth reading.

It's also a very enjoyable read. I couldn 't put it down. However, part of what made it so rivetting was the promise that the author(s) will (1) teach me exactly how Warren determines which companies to buy, and (2) the later chapters would teach me in detail how to value a stock and determine what price to pay for it just as Warren does. Unfortunately, the first promise falls a little short, and the second promise proves to be a flat-out lie.

Problem 1: She tells us the math is so complex that she had to enlist the aid of a second author to help with that part of the book. But the math turns out to be junior high school level stuff. She shows us a couple of way theat one CAN attempt to calculate a reasonable price for a stock, but does NOT show us how Warren does it, nor does she show any current examples of how we can go about to a stock today.

Problem 2: The truth is, she doesn't know how to apply Warren Buffet's techniques, because if she did, she would have included at least one CURRENT example (at the time of printing). She would have chosen a stock and explained why it is a great investment and would have told us what price to pay for it, and would have shown how she made these determinations. After all, that is why we are interested in learning Warren's methods, so we can buy excellent investments TODAY. Merely showing us how much money he made on some stock he bought 20 years ago doesn't prove that she knows HOW he did it. There are a number of companies which she describes as great, but beyond that she drops the ball. Of course, if she had presented a concrete, current application of the method she describes, then she would be forever accountable. We would be able to quantify her success or lack thereof. But she conveniently prevented this.

Problem 3: The book is full of fluff. No doubt she was coached by the publisher to thicken the book. She repeats things over and over. There is even one chapter that literally repeats one paragraph of information a dozen times, which will make your head spin and your jaw drop in dismay. And the further one gets into the book, the more prevalent is the fluff.

Problem 4: She completely overlooks free cash flow, which everyone knows is a key criteria that Mr. Buffet looks at.

Problem 5: She tends to talk down to the reader.

My advice: The book is worth a read, but buy it used, or get the cheapest version available. But don't expect to be able to do what Warren does after reading it.

Cheers!

31 of 32 people found the following review helpful

4.0 out of 5 stars Better than it seems to some February 9, 2003

By James H. McDuffie

Format:Paperback

Although I agree with some reviewers about the origin of the book I believe it should be judged by its merits rather than by whether or not Mary Buffett is capitalizing on her relationship with Buffet's son. The book makes a great deal of sense actually and I have made a great deal of money in the stock market using methods almost identical to those espoused in the book.

However, the authors fail to explain why low debt, high return on equity companies are so attractive. They dance around but never hit the correct answer. This makes me wonder if they really understand it. For the reader's future reference, once this simple fact is truly understood the investor is on his or her way to understanding investment. Another difficulty is that there are mathematical errors in the book and simplistic mathematical calculations. But the errors induced thereby are not large and no one seems to realize that the calculations are just a poor man's replacement for calculus. As someone with a extensive mathematical background I find this perfectly acceptable. Quite frankly, I have never needed more than simple algebra to understand investments anyhow so restricting the reader to this is good. Also, some sections of the book wander about somewhat aimlessly trying to explain rather simple concepts. I just think the authors don't have a quantitative background. As I said above that is ok but these concepts can be explained better in words than they are in the book.

Finally, other reviewers are correct. Mary Buffett using Warren said this and Warren said that etc. throughout the book grates after a very few pages.

But in the final analysis the book is worth the time and effort. It is actually an attempt to make a basic valuation theory available to the masses so to speak and it does a very good job of this. The book is definitely worth reading for those just starting out and in particular for those who think they understand investment but really don't. I will leave it to the reader's discernment as to who those individuals are.

45 of 50 people found the following review helpful

5.0 out of 5 stars Best Investing Book I've Read October 1, 1999

By A Customer

Format:Paperback

I've read Robert Hagstrom's "The Warren Buffett Portfolio", Ben Graham's "The Intelligent Investor", James O'Shaughnessy's "What Works on Wall Street", and Peter Lynch's "One Up On Wall Street". "Buffettology" is better than all of them combined. It tells you Warren's basic investment strategies AND the mathematics to calculate what is and isn't a good buy. It goes far beyond just P/E ratios and ROE.

Before I bought the book, I wondered if maybe Mary Buffett didn't really know Warren's investment strategies and was just using her name to sell books. I was wrong. She goes into great detail about how he picks stocks. Far more detail than is in Hagstrom's book or in BRK's Annual Reports (but those are good sources too).