Customer Reviews

The New Buffettology: The Proven Techniques for Investing Successfully in Changing Markets That Have Made Warren Buffett the World's Most Famous Investor

5 star:		(19)
4 star:		(4)
3 star:		(3)
2 star:		(4)
1 star:		(2)

 

 

This book is an improved version of their original. Particularly better was the coverage on what makes a durable competitive advantage. Also, the formulas and approach was organized better.

By reading the negative reviews of this book and its original you will find that this is a book written to be easily read. The authors did a great job of cleaning up the the "I knew Warren" tone of the first book.

The only drawback of this book is its over-simplifying the complications that can occur when you do a value approach - particularly when you look at real data. Still, this new book gives many examples to walk the reader through the methodology.

There is no statistical results shown that this method does indeed beat the market. You have to take it on faith that this methodology is used by Buffet, that it is what produced his great success, and that it can be duplicated in today's market.

Still, this is a great book, and I recommend it to investors, and to businessmen who need to understand more about "durable competitive advantage" and the kinds of businesses they should be creating. There is much more that needs to be said about competitive advantage. There are several books on this (starting with Michael Porter). This book gives a simplified version.

I think it is important to know that Buffet is not a Jack Welch type of manager. I would say he is closer to a Harold Geneen in that he is more of a "rentier" than a get-in-the-trenches manager/leader like Welch. This effects his choice of businesses. His approach is to own the only gravel pit in the county, and milk it for many years. This is certainly a good approach, but one that is difficult to pull off because a competitive advantage is difficult to hold on to.

It appears that significant monies were made by Buffet using investments not following this method (hedging, speculating on interest rates). These have provided buffers against when the value investing techniques didn't work.

Perhaps most important in the author's and Buffet's approach is the use of stock selection criteria that are outside of the radar of the average investor. And, that criteria is the screening on "durable comepetive advantage." Few investors screen stocks on this qualitative data. If this criteria indeed selects successful companies then you will do better than those without this information (assuming you buy right).

After reading this book, you can find out more on competitive advantage and stock prices by reading the books by A. David Silver (Quantum Companies). He is one of my favorite authors on durable competitive advantage. You should also read some of the recent books on how to research companies, like the one by Hoover.

There are many books on value investing. There is even a "Dummies" book on it. All of these are recommended because you will find that there can be a lot more to it than presented in this book. I would think that some kind of value investing test should be a requirement for all CEO's. Hopefully such a focus would keep certain CEO's and their partners-in-crime (CFO's) from focusing on hyping up the stock price through fraud, and get back to producing real business results. This book does not tell you how to detect puffed up earnings and fraudulent balance sheets. You'll need to read other value investing books for this.

Overall, I believe that if you follow the simple formulas in this book, you will find good value stocks. Buy this book, rather than the other previous ones.

John Dunbar
Sugar Land, TX

Please see my review of the original Buffettology. The comments there largely apply here also. This second book is supposedly written with a down market in mind whereas the first was more bull market oriented. Actually, the second book is a very slightly more sophisticated version of the first where the authors have expanded and clarified several topics. For choosing strong consumer oriented companies with durable competitive advantages the authors include the return on total capital in the selection process. This is simply an additonal filter to what was in the first volume. There is also a more sophisticated study of when to sell a stock and a discussion of what makes a company profitable. This info and a reworded rehash of several chapters of the original are what make up the first 168 pages. There is some new information here that was not in the original. The writing in this first section is better than in the original Buffettology. Most of the remaining holes the reader can fill in with some additional research. Pages 169-189 are a discussion of "Where Warren Is Investing Now." There is definitely overlap with the first book here and a lot of it. There are a few additions however and some are worth noting. The section on arbitrage remains lightweight in this version although that may be good for the average investor. The final sections which deal with the mathematical equations are virtually reproduced from the original Buffettology and the workbook. This is sad for that is the portion of the book which could have used rewriting the most. My comments from Buffettology are still true. The math is not as terrible as some believe but the sections could have been written better. Frankly this is just laziness on the authors' part and nothing else. In the final analysis what is probably most useful to note about both books is that they could have used a good financial appendix and a good financial glossary. The value of these already excellent books would have doubled.

This book is a "most of what you need to know about value investing but didn't know what to ask" approach to the investment philosophy of Warren Buffett. I also own the first book, but didn't review it. This one is much better.

The New Buffettology is a book of examples. I think that's what I like most about it. It has plenty of theory about the importance of a company having a durable competitive advantage, honest and able management, staying within a circle of competence, ensuring a margin of safety exists, how interest rates affect stock prices, and more. That's great, but the rubber hits the road with the numerous case studies of actual Buffett investments and how he applied the above concepts to help him decide to invest in Coca Cola, Gillette, the Washington Post, and Geico, to name a few.

Along with the case studies come the formulas. Lots and lots of formulas. Does the company have strong earnings with an upward trend? Plug 10 years worth of earnings into your spreadsheet and calculate the annual earnings growth rate. Does the company return an above average Return-On-Equity? Mary Buffett & David Clark show you how to break out those Value Line reports and plug in 10 years worth of ROE numbers into your spreadsheet to calculate the average annual return on shareholders equity for the last decade. What's the stock's value relative to a Treasury bond? You'll learn how to calculate the answer here.

The exercises go on case study after case study. I love it. Roll up your sleeves; dust off your BA-35 solar calculator and get ready to rock. If you want the skinny on value investing ala Buffett style, you had better be prepared to get your hands dirty because this is a thinking investor's book.

This book doesn't just TALK about financial analysis. It shows you how to DO it. Nothing is more boring than long windy theories with no "meat" to back them up. This book serves up the meat in Texas sized portions. Exactly where does one go for 10 years of financial information? Where do you find the current government bond rate? What's important in an annual report? Just how do you find companies that make products with a durable competitive advantage? What should you read? What should you watch? What habits should you develop? How do smart investors use "scuttlebutt" to help them form an opinion about a company? The answers may surprise you.

If value investing is what you want to do, then you have much to learn. And indeed, this book is a great place to start. It's not the only value investing book you should ever read, but is should definitely be one of the first.

I've read all the "Buffett Books" and the Buffettology seies is the by far the best! Proof is pudding and these books have made me lots of money and, most important, have kept me from losing money. The New Buffettology explains how Warren Buffett avoided being slaughtered when the high-tech bubble imploded. It also explains in great detail how Buffett determines what companies to invest in during bear markets - a great thing to know! I bought this book (and I buy few new books because I sell used books for a living) because of the recommendation on the back by Tim Vic the celebrated author of "Wall Street on Sale" - in the world of value investing Tim Vic is the man - and I'm glad I didn't wait for it to come into the store! I highly recommend it for all serious investors who are interested in making money in this market! (If you read the original Buffettology -like I did -you are going to find that The New Buffettology explores new material that wasn't in the original - specifically how Warren determines when a market has topped or bottomed, plus the book contains the calculations that Buffett uses to determine when to sell a stock - something I've never seen before. Also there is an updated list of every stock Buffett has invested in - including his most recent investments - and a list of stocks that he will probably be looking to buy in this market. I also liked the in-depth study of Warren's arbitrage operations.) All in all it's a great book on the investment methods of Warren Buffett - the greatest investor of all time. I give it five stars and two thumbs up!!!

One of the very best books that tries to explain Warren Buffett's approach to value investing. Unlike most "Buffett" authors, she stays true to the essence of Warren Buffet, and emphasizes solid financials before looking at price, etc. Other authors stray from the Buffett path by trying to apply his method to technology stocks, overlook the fundamentls and focus on price history and movements (doh!). Mary is stays true and is thorough.

The good: Mary Buffett is very specific about what factors she believe Warren Buffet considers whe selecting a stock, and she gives examples and lots of info to explain it.

The "could be better":
1) She is so close, but does not give precise formulae for each factor, or uses a vague term at a critical spot. It took me many weeks and many more books to fill in the gaps to where I could develop a complete analysis of a stock.
2) It would be a great assist to give an example of how to use a data source such as Value Line to plug into her analysis steps. Formulae and data elemts from a specified source would make this book priceless.

As solid and treu to Buffett as this book is, I cannot believe Mary Buffett didn't follow-up with a website, newsletter service, analysis software, speaking engagements, etc. She has divulged more specifics about warren Buffett's value investing method then anyone else I could find, yet has not pursued the real cash cows that could come from it.

Read this book a few times, and carefully work through to develop the complete calculations (don't be lazy now!), combine it with a 90-day trial of Value Line and you will be able to quickly filter hundreds of stocks down the best values for the next year!

My highest recommendation for an investing book other than Warren Buffett's writings and the books by his mentor Graham. Get this with Graham's The Intelligent Investor, read Warren's Letters To Investors at berkshirehathaway.com, and you will have a solid value foundation!

I recently retired at 30...or so I thought. Unfortunately, one can never truly retire, unless you have a particular immunity to the sound of your cash devaluing. It was like nails on a blackboard to me, my dreams of ignoring business and wrapping myself in the arts; good food, better wine...all gone. Gone with the realization of inflations dastardly influence on assets kept in cash.

I knew I had to put money to work, but where? Coming from "inside" corporate america, that is, with an operational focus, I've always had an aversion to investing time or money into that which I didn't know, and I know there's an art to everything (especially investing). As a former CEO, I came into contact often with investors, and whether they were willing to pay more or less than my company's stock was worth wasn't the principal difference among them, the most striking difference was the amount of intelligence they brought to the analysis. I would often sit in on meetings and wonder when they'd start asking the important questions, instead, most would work their understanding through totally different (and I thought much less efficient) vectors. I always knew there was a much simpler means of analysis.

This wonderful book is, for me, that analysis. Laid out in plain easy to understand terms and instructions, Buffettology taught me how to objectively value publicly traded stock with discipline.

So what did I do when I put my first money to work? I ignored Buffettology's teachings, and bought stock in a company that I've always wanted, but Buffett would never buy.

That cost me a car in my first week.

Probably a cheap lesson in the grand scheme of things. I'm dumping that stock tomorrow, sharpening my pencil, buying that BA 35 Solar calculator, and applying some Buffett style discipline from here on out.

Wish me luck...no cancel that, just pray that I have the good sense to follow his sage advice.

Christian Hunter
Santa Barbara, California

who has time to read tons of in-depth investment books? not i, for one. the beauty of this, well, little beauty is that while it isn't for the professional, and even a dummy could "get" it--it is original enough, convincing enough, and compelling enough a vehicle for any investor to embark on making money slowly, consistently, and successfully by any yardstick. i read the first Buffettology with much gratification, and, hard to believe, this is even better--MUCH better. the authors do it again, with nary a repetition. all-in-all, a crystal clear tour de force in a nutshell. this comes as close to the holy grail of non-highly technical literature within its discipline as anything i have ever seen.

The Buffettolgy scheme could sound very simplistic to some, or just boring to others, but out of experience, the lessons of this book are the fundamental basis for a real long term and wealth building investment process. For those who believe in the get rich quick with some colorful charting approaches this book may sound too simple to be true.

The essence of this book is to find stocks that stand the test of "Durable Competitive Advantage" with a careful and simple approach and plenty of examples. It is worth reading if you are a novice investor, but if you are not, then you will need to skip this book.

Book Strengths: Simple approach, good examples
Book Weaknesses: Short in theory

I absolutely loved this book. I follow Warren Buffett's philosophy of investing and found this book a great read. I particularly liked Chapter 3: How Warren Exploits the Market's Shortsightedness. Whether you are a beginner or advanced investor, all the advice in this chapter is especially helpful during the 2008-2009 Recession. Exploiting market's shortsightedness worked very well during the first half of 2009. If you follow Warren Buffett, you will like this book.

- 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

This is probably the best Buffett book that I have read. Most of the books about Buffett talk about his life history and how he bought shares of Company X twenty years ago for $10 and it's now worth $200, but they don't give you specifics of how he evaluates companies that he purchases. This book gives you the specific and quantifiable criteria that he uses to evaluate a stock for purchase. For example, a company must have a ten year record of return on capital above 15%, a debt to equity ratio below 1.5, etc.

There has been some debate about the credibility of this book in regards to how much Mary Buffett actually knew about her former father-in-law's business. I can say that the principles outlined in this book are consistent with many other texts that I have studied on value investing, and I have used the same criteria when evaluating stocks for my own portfolio.