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An insightful new take on the life and work of one of the world’s most remarkable investors: Warren Buffett
In the 30th Anniversary Edition of The Warren Buffett Way, celebrated author and investor Robert Hagstrom delivers the definitive version of his bestselling compendium of the investment strategies made famous by Warren Buffett. The Warren Buffett Way describes the twelve investment tenets of Warren Buffett’s strategy called business-driven investing and his distinct approach to managing a portfolio of businesses. You’ll learn how you can apply these same principles to building your own portfolio and find discussions on the psychology of long-term investing, its optimal benefits, and how to avoid the most common pitfalls and mistakes encountered by investors.
This latest edition includes:
A new author preface to complement the existing forewords from Peter Lynch, Bill Miller, and Howard Marks.Insights on how to achieve worldly wisdom advanced by Warren Buffett’s longtime business partner Charlie Munger.Footnotes and references to academic work that supports and expands on Warren Buffett’s investment approach and portfolio management.The complete Berkshire Hathaway common stocks portfolios from 1977-2021.
An indispensable guide to the remarkable work and accomplishments of Warren Buffett, The Warren Buffett Way is a can’t-miss resource for professional and individual investors who want to learn from the world’s greatest investor.
From the Publisher
It has been a decade since you wrote the last edition of The Warren Buffett Way. How has the world of investing changed since then?
Much has changed in investing over the past ten years including market structure caused by rapid increase in the assets under management of quant-driven, algorithmic portfolio strategies that, in turn, is having a profound impact on the speed and magnitude of stock prices changes. At the individual stock level, we are witnessing an ever increasing appetite to purchase technology and communication services stocks – once thought to be untouchable by most value investors. The best example being Warren Buffett’s sizable investment in Apple.
What makes Warren Buffett’s principles stand the test of time?
Without question, what makes Buffett’s principles timeless is the focus on thinking about stocks and portfolio management from a businessperson’s perspective. As he likes to say, “I’m a business-picker not a stock-picker.” Stock theories and portfolio strategies change quite often whereas business principles – what makes for a great business, what management qualities are necessary, and what economic returns are attractive – absolutely stand the test of time in an ever changing world.
What role does psychology play in a long-term investing strategy?
In the first edition of The Warren Buffett Way and then soon after the publication of The Warren Buffett Portfolio, I was keenly focused on Buffett’s methods of picking stocks and managing a portfolio. I spent little time thinking about the psychology of his approach. It wasn’t until I wrote Inside the Ultimate Money Mind that I recognized how important psychology and philosophy, what Buffett called “the Money Mind,” was to successful long-term investing. You need both parts: methods and temperament to achieve outstanding returns. In the 30th Anniversary Edition, we combine The Warren Buffett Way, The Warren Buffett Portfolio, and Inside the Ultimate Money Mind into one book.
Do you have a favorite of the twelve investment tenets? What draws you to that tenet the most?
Obviously, all twelve tenets are important as they were thoughtfully laid-out by Buffett. But if forced to choose one, I would say under Business Tenets: “Does the business have favorable long-term prospects?” Because The Warren Buffett Way seeks to compound the long-term growth of above-average businesses, understanding how a company is able to maintain a long-term period of outperformance is crucial. It also happens to be the one tenet that Buffett himself admits is the hardest to figure out. It is not enough to be a great business today, you have to figure out if the company has the potential to be a great company 5-10 years from now.
What is the most important takeaway for new investors in this book?
Over the years, Buffett prophetically reminds all investors that “investing is easier than you think but harder than it looks.” Easier than you think in that investors don’t have to be market forecasters, macro-economic thinkers, geopolitical strategists, or stock theorists. All this is unnecessary when you invest and hold great businesses for the long-term. The harder than it looks part is the psychology, the temperament, of being a long-term investor in a market that is constantly screaming at you to make changes, buys and sells, in order to not fall behind. But as we point out in the book, “when the stock market is speeding up and everyone is blindly, fanatically racing for short-term performance, there invariably comes a point when the business owner simply slows down. And in doing so, sees everything.”
What is the best piece of investment advice you’ve personally received?
Read-Read-Read! Reading imparts you with knowledge which feeds your self-confidence that enables you to compete in a marketplace where independent thought is necessary to achieve-above average returns. Without knowledge your confidence crumbles leaving you to latch-on to soothsayers never knowing whether their ideas are good or bad.
Publisher : Wiley; 4th edition (April 23 2024)
Language : English
Hardcover : 352 pages
ISBN-10 : 139423984X
ISBN-13 : 978-1394239849
Item weight : 1.05 kg
Dimensions : 14.48 x 3.3 x 18.03 cm
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Some Guy –
Essential Reading
Everyone should read this book, as it is essentially a textbook on psychology, economics, investing, and such through the eyes of Warren Buffett. Thus, it is filled with tips and insights in living itself. So if you are not an investor or rich, you can learn so much that is good from it. If you are an investor, you will learn how to take your money and invest it wisely.The book is a win-win for everyone.
None –
The Warren Buffett Way
Excellent book, with the understanding of the great mind of the inverter.
Good Guy –
Good book that outlines the basic principles that Warren Buffet and Charlie Munger used to build their empire
axel carpezat –
Great
Without Fear or Favour –
I read the original/first edition about 27 years ago and I truly liked the book! When I came across this 30th anniversary edition, I immediately purchased it to update myself, as there have been so many developments and changes over the intervening years.Although Mr. Buffett’s investment tenets are timeless, this latest edition is basically a new book with the old chapters in the first edition revamped. Others like me who have read the first edition can seriously consider picking up this latest edition (despite my 3 star rating which is due to the considerations below).However, there is room for improvements:1) More can be shared about Warren Buffett’s failure. Sadly, errors of omission is a mere short section in Chapter 4. I believe no one is perfect and surely Mr. Buffett has had his fair share of omissions and mistakes. One can learn just as much from failures as from successes. An example is the Tesco investment that Mr. Buffett characterised as a “huge mistake” … this should have been included in the book.2) I would also love to get the author’s assessment of the Kraft-Heinz merger. Was it a success or a failure? Why did Mr. Buffett pursue the deal? And what about the purchase of various airlines stocks? Was this decision made by Mr. Buffett or his lieutenants? In recent years, some common stocks are no longer held for the long-term by Berkshire Hathaway … why is this so? A coverage on this would be extremely helpful as well.3) The author could have shared the mathematical formulae for coming out with the figures/numbers in the book. This way, the reader does not have to spend time figuring it out on his/her own.4) This 30th anniversary edition was published in 2024, but in Appendix B we only have Berkshire Hathaway’s Common Stock Portfolio up until 2021 only.
RandoTrader –
Author has really distilled Warren’s simple yet difficult to execute concepts down very well and in a orderly coherent format.Walks you through multiple of his investments, and if Warren himself liked the book then you know it’s good.
SA –
If you like reading great book ship pretty fast ! My son enjoyed reading it