Customer Reviews

The New Buffettology

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Many books have been written about Warren Buffet's way of picking the right stocks at the right time, but this one is the most sound, concise and actionable -- the formulas and algorithms given in this book aren't given anywhere else. There is another book similar to this one: "The Warren Buffet Way" by Robert G. Hagstrom, but it misses the important topics laid out in the "Buffetology". These major topics are: what are the differences between a "consumer monopoly" and a "commodity"; how to calculate the rate of return over a long period of time before choosing the investment; and so on. There is another great book about Warren Buffet and his investment strategy - "Buffet: The Making of an American Capitalist" by Roger Lowenstein, but it better describes Mr. Buffet's biography and his relations with family, friends and the society, rather than how did he evaluate the companies. But please note that "Buffetology" is not a replacement of the book by Roger Lowenstein, I highly recommend reading both of them. What is you can omit is the book by Robert G. Hagstrom, above mentioned.

I would recommend an abridged audio version of the "Buffetology" instead of the printed book. The audio version discloses the most important factors of Mr. Buffet's investment principles pretty well. Some of the background information is available on free letters to shareholders and Mr. Buffet's lectures, but you might not want to crawl thought all these; you might want to save time and just listen the "Buffetology" audio or read the "Buffetology" book, where all this information is perfectly summarized and laid out in a consistent way.

The New Buffettology attempts to introduce investment strategies inspired by Warren Buffet as a set of specific numeric recipes. Unfortunately, it comes short in many areas, committing gross mistakes and misrepresenting Warren Buffett's views (do not be fooled by the last name of the author).

Any investor who wants to "do it like Buffett" must come up with ways to numerically apply Buffett's investing logic, which is amply captured in his annual shareholder reports. To this end, the book provides a to-the-point and ready-made methodology. You will, of course, be better off following the recipes found in this book, rather than gambling on the market like many do.

However, if you have time and basic mathematic ability to really understand Buffett's teachings and form your own approach based on his lessons, there are better books out there, notably The Essays of Warren Buffett : Lessons for Corporate America. If you are still considering reading The New Buffettology, below are just a couple of examples of places where the book is sub-par.

Chapter 9 on "Solving the Puzzle of the Bear/Bull Market Cycle" attributes to Buffett quite a few opinions on timing the market cycles. Warren Buffett is unlikely to actually hold such opinions, as he explicitly stated that he does not make decisions based on overall economic or market conditions.

In Chapter 13, "Checklist for Potential Investments," the book discusses the benefits of share buy back programs. The book fails to even once mention the price at which companies buy back their shares, and the associated reduction in equity. This is an unforgivable omission, especially since Warren Buffett has extensively commented on this issue.

One of the few books I wish I had read earlier . Essential reading for anyone investing in the share Market.

this book along with the author has been more misrepresenting warren and his method than many. there are several books worth the reading on buffett:

1) warran buffett essays / annual reports;
2) the warren buffett ceo;
3) buffett, the making of an american capitalist;
4) intelligent investors.

but by far, the first book is the one which tells you almost everything, not just investing, but how to run a business with rational approach.

This book is not worth the buy. Sometimes I wonder if the authors have read it themselves after writing it!
A much much better book is "Intelligent Investor" by Benjamin Graham - who was Warren's mentor and tutor.

The author shows formulsa to determine of companies are worth investing in and she explains both with narrative and formuals how Warren Buffett grew in his life to make miney and understand the market.