- Paperback: 368 pages
- Publisher: St. Martin's Griffin; 1 edition (August 22, 2006)
- Language: English
- ISBN-10: 0312358784
- ISBN-13: 978-0312358785
- Product Dimensions: 5.5 x 1 x 0.3 inches
- Shipping Weight: 1.2 pounds (View shipping rates and policies)
- Average Customer Review: 4.3 out of 5 stars See all reviews (66 customer reviews)
- Amazon Best Sellers Rank: #739,866 in Books (See Top 100 in Books)
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The Winning Investment Habits of Warren Buffett & George Soros: Harness the Investment Genius of the World's Richest Investors Paperback – August 22, 2006
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"Mark Tier's mapping of investment genius is simply masterful. What lifts his book even further is his infectious delight in discovery and clarity of explanation as he hands you the attitudinal and behavioral keys to becoming the consummate investor." -- David Gordon, author, Expanding Your World: Modeling the Structure of Experience
"...a stunningly simple, but highly intelligent and effective idea: Analyze the methods of Buffett and Soros and see exactly why they're so successful. Soros's and Buffett's methods are often so different -- yet, as Tier shows, the keys to their success are amazingly similar" -- Doug Casey, editor, International Speculator
"Demonstrates that Buffett and Soros both practice exactly the same mental habits and strategies" -- What Investment
"What do Warren Buffett and George Soros have in common besides their self-made investment fortunes? Well, neither takes big risks or diversifies.... Instead, both are cautious investors who have learned how to protect their capital. Oh, and neither follows analyst reports--ever." -- U.S. News & World Report
“...Tier teaches readers to invest smartly by delving into the skills, philosophies & investment strategies of some of the world's richest self-made men...” ―Publishers Weekly
“[He] has chronicled the mental habits that made Buffett and Soros the world's richest investors – and allowed him to give up the rat-race.” ―Jennifer Hill, The Scotsman
“One of the most exciting investment books to come down the pike in a while.” ―Laissez Faire Book Review
“…Tier's approach is especially valuable because Soros's and Buffett's methods are so often different- yet, as Tier shows…amazingly similar. Great book – something I rarely say about this genre.” ―Doug Casey, editor, International Spectator.
“...great read…I recommend it…gets to the essential reasons for the investment success of Soros and Buffett better than any other book I have read…” ―Chris Weber, editor, The Weber Global Opportunities Report
“Tier has written an excellent book. His chapter on exit strategies alone...is worth the price of the book.” ―Dr. Mark Skousen, editor, Forecasts & Strategies
From the Author
I also met several novice investors, analyzing their poor investment habits to contrast with the successful ones.
I gave copies the manuscript to all of them, and asked them all for their comments.
Here's how I expected they would react:
- The successful investors would come back and tell me where it sucked -- where I'd made mistakes, bloopers, and so on;
- The novice investors would use it to improve their investment results.
One point of clarification: just how successful were these two successful investors?
Both these men had achieved independent wealth through their investing. One, then in his sixties, was twenty when he arrived on Wall Street and became a millionaire before he turned thirty -- by investing on his own account, not hustling investments to others. The second started a bit later, but was also independently wealthy.
Both had made enough money from their investments to sit on their thumbs for the rest of their lives.
I had learnt from them -- what could they learn from me? Nothing at all, I assumed.
They both thought differently:
- "Here is a different way of looking at the investing process. Maybe I'll learn something."
One of them tweaked his exit strategy, based on my exposition.
This is, unquestionably, the greatest compliment I've ever received on this book.
Compare that reaction to that of "Henry," whose reaction was typical of several novice investors I talked with.
I spent enough time with Henry to get to know him reasonably well. In his early twenties, he had accumulated about $10,000 and had been investing on the stock market for about a year. His results weren't appalling, but he'd have done better if he'd left his money in a index fund.
Did he apply the habits, or attempt to?
Did it make him think more deeply about his strategy or anything else related to his investments?
Not as far as I could tell.
id it make any difference to his life?
Aside from an enjoyable read, not in any discernable way.
A psychological attack on would-be traders?
A few reviews of The Winning Investment Habits of Warren Buffett & George Soros are rather, how shall I put it? -- decidedly uncomplimentary.
One (on Amazon.co.uk) describes The Winning Investment Habits as a "psychological attack on would-be traders."
As far as I can tell, all I did was point out that trading is far more stressful than investing.
When you're under pressure, you're more likely to make mistakes.
When the pressure is unrelenting, you can burn out.
Traders burn out; investors don't.
Even Soros burnt out; Buffett never has.
Soros learnt how to deal with stress, partly by delegating some or all of the responsibility to others and acting as "coach" rather than trader. The result: he can come back into the saddle when necessary, totally refreshed.
Which is exactly what he did in the middle of the financial crisis of 2008. He took back control of his Quantum Fund: while everyone else on Wall Street was losing their shirts, he was up over 30% for the year.
If you're so good, why write a book?
I wrote this book because I'm a writer. That's what I love to do. The best way for me to learn something is to write about it.
Writing this book was the end of a long quest for the keys to successful investing. In the process of identifying the 23 Winning Investment Habits I realized my problem wasn't a lack of knowledge; the problem was me. My own mental habits. I worked hard to change them. The result: the returns from my investments now pay the rent, send the kids to school, put food on the table, and so on.
Every morning, I can choose to do with my day whatever I wish (including sleeping in).
Mostly, I choose to write.
Wouldn't you like have a life like that?
If I can do it, so can you.
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Top customer reviews
Let me make sure that everyone is clear; this book doesn't disclose any secrets or any inside information on how these guys invest. It’s basically a macro view ex post (after the fact) into their investment styles.
The author does a very good job of identifying the winning investment habits and also providing real life example to support his points.
Here are my top 3.
1) Don’t diversify - when you have done all the analysis and due diligence on an investment, invest with confidence and a decent amount of your portfolio. Theoretically you are planning to hold forever.
2) Invest in good mgmt - the people who run the company are the most important asset. You should seek out companies that have been run well and that mgmt has a long history of success
3) Don't listen to others - don't worry about the "noise" and other experts. Stick with your evaluation and be confident. Don’t listen to anyone on TV as mostly they are entertainment.
I have combined these and other habits mainly position managements and cutting losses into my investment system and I can tell you that these guys know what they are doing.
obviously we don't have the tools that Buffett has but if you read this book you are on your way to sharpen and develop your investing toolbox
At some points this book is a bit dry but overall I highly recommend to anyone who is interested in the not too technical aspects of Buffett's and Soros' investment.
There are no secrets and you can find this stuff elsewhere but the author does a good job of putting everything together.
I was very familiar with Buffett, but much less so with Soros and his investing. I think the big take away for me is how it can take years for things to materialize, and you must keep testing for the right moment to add to your positions. I have given up on winning ideas too soon, and had too much capital at risk too early. Wait until the market moves, then take sizable positions.
July 2014 Update I have been doing more of this waiting and then adding sizeable capital. So far it has been working out well.
The stock market is something that many people go into with vague hopes, with pension plans, or mutual funds for some interest, hoping that they'll pay off. Other people try to invest in a company they like--Peter Lynch's books can teach you brilliantly how he turned a mutual fund into something huge using that method--but a lot of people lack the will or the focus to do the research, the studying, and the ability to execute those buy and sell orders (emotionally) that the stock market will for most people remain a suckers bet.
With a book like this out there however, with its common and approachable language, it's to the point explainations, and it's brilliant juxtapositioning, you have a book that investors and traders alike should read long before ever buying their first stock.
To help design your own system, a few books that have helped my parents (investors) and me (trader).
Benjamin Graham: The Intelligent Investor and Security Analysis (though some things have changed in the market, much of what's written in those books are pretty much biblical in their importance for intelligent investing and well worth the money).
Philip Fisher: Common Stocks And Uncommon Profits (The Intelligent Investor and the book Security Analysis can be considered the most important books for Value investing, then Fisher's must be considered the most important book for growth stock investing. It is one of the best books on finding stocks that will grow and grow).
Peter Lynch: Beating the Street and One Upon Wall Street (he was a massive diversifier, but learning how different people did it is always important.
Dorsey: The Five Rules For Successful Stock Investing (coupled with Keys to Reading an Annual Report) (These two books are astonishing in their key to investment wisdom. Coupled with the other books, you can be finding undervalued companies with growth potential in a matter of a few months, that in a few years will be worth dozens of dollars more than you bought them for).
Jim Cramer: Real Money (I am not a huge fan of his book, but the one thing he does promote is selling the stock. Buy and Hold in the stock market needs to become a dead aphorism, and his selling rules, and emphasis on Buy and Homework, is well worth the small price of the book).
Van Tharp: Trade Your Way to Financial Freedom (A brilliant book that lays bare the mental needs one must have for a trader and how to get yourself there).
Stan Weinstien: Secrets for Profiting in Bull and Beark Markets (though completely technical analysis, in trading, if you don't couple the fundementals with technicals, you can't expect big gains.
Martin Zweig's: Winning on Wall Street (This book focuses on a style of macro-analysis, taking the big picture, and then finding stocks that fit in the big picture, with government reports, global market, and the such.
William O' Neil: The Succesful Investor, 24 Essential Lessons for Investment Success, and How to Make Money In Stocks (okay, cheesy title I will admit, and it sounds like one of those books you get at your own peril. It's also a massive add for his newspaper Investor's Business Daily--though with the information I've gotten from the book it's my experience that if you have the time you can do the same thing with Barron's magazine. William O'Neil made himself millions by analyzing the market and shorting stocks and buying stocks before they broke in either direction. He supported his fledgling paper with his trades alone. His three books come to a little more than 30 dollars which you'll make back in weeks if you follow his rules).
Nicolas Darvas: How I Made Two Million Dollars in the Stock Market, Wall Street: The other Las Vegas (Another bad title, but a brilliant system called Box System, a system that has inspired William O'Neil and countless others).
Gearld Loeb: The Battle For Investment Survival (An old timers book that aged well and is still relevant).
Michael Covel: Trend Following (a brilliant book that gives a strategy called Trend Following that many successful funds have used).
Jesse Livermore: How To Trade Stocks (This poor Massachusetts boy, went from a small job at 14 or 15, at a stock brokerage, to making a hundred million dollars in the 1920's, his insight into the psychology of the market has saved me money and made me money).
I've read all these books and I think diversifying your knowledge instead of your portfolio and focusing key things that you think are important, and not being afraid to fail, which is a hurdle every trader has to overcome (one time missed out on a 20 point jump in less than two months, because the stock dropped slightly--not even below buying point--and I got scared). Live and learn, that's the major lesson. Start with this book, it's the perfect beginners guide in my opinion.
Preservation of capital, minimizing risk by operating within areas of competence, and building upon experience and knowledge toward a level of unconscious competence all represent the hallmark of each investor's strategies. Perhaps most striking is the simplicity offered in each investor's approach; their vast fortunes perhaps having more to do with discipline and adherence to their philosophies than to genius.
Many billionaires would struggle to present reliable strategies for anyone to follow in their path, yet as Tier illustrates both Buffet and Soros do not follow complicated strategies, they are both essentially bright investors who maintain the habit of sticking to rigid guidelines. Each of these habits is dissected in detail and as a result I have full confidence any investor will benefit from reading this book.
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