Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The Worlds BY MARY BUFFETT, DAVID CLARK

About the book

Warren Buffett, the most well-known and highly regarded investor of all time, made his name by building his trading career from the ground up. Investors widely quote him for his ideas, principles, and trading techniques, which soon had a name called Buffettology. This is a compilation of Buffett’s ideas and principles in trading, with additional input and explanation by Buffett’s former daughter-in-law, Mary Buffett, and Buffettologist David Clark.

Review

This book is direct to the point explanation of Warren Buffett’s investment analysis model. It uses a much better approach when compared to other finance books that discuss Buffett’s ideas and goes on a great length at explaining it, all the while losing its readers. The book begins with how Buffett’s developed this investment analysis model and how it has evolved. Mary Buffett does a good job of discussing Warren Buffett’s ideas and shows her expertise on the matter, with the assistance of David Clark. Together, the two create a comprehensive guide to Warren Buffett’s investment analysis model. It shows investment in a new light and emphasizes important factors such as key management principles. Overall, this book is recommended to all Buffettologists and even traders who want to know and understand more of Buffett’s principles and approach to investing.

About the Author

MARY BUFFETT is an author, speaker, and entrepreneur. She is regarded as among the leading finance experts in America. She has served as a speaker for many esteemed organizations globally. She works with an array of businesses, such as acting as a consultant to Fortune 500 companies.

DAVID CLARK is an expert on Warren Buffett’s philosophies on investing. He graduated with two university degrees, law, and finance. He wrote seven books on finance, especially on Warren Buffett’s investment methods, along with Mary Buffett.

Table of Contents

PART I: THE ART OF BASIC BUFFETTOLOGY

  1. Before You Begin This Book
  2. How to Use This Book
  3. Roots
  4. Investing from a Business Perspective
  5. What Is Businesslike Investing?
  6. Warren’s View of Earnings
  7. The Price You Pay Determines Your Rate of Return
  8. The Corporation, Stocks, Bonds—a Few Useful Explanations
  9. Valuing a Business
  10. The Only Two Things You Need to Know About Business Perspective Investing: What to Buy—and at What Price
  11. What We Can Learn from Warren’s Secret Weapon: The Magic of Compounding
  12. Determining What Kind of Business You Want to Own
  13. The Theory of an Expanding Intrinsic Value
  14. The Mediocre Business
  15. How to Identify the Excellent Business—the Key to Warren’s Good Fortune
  16. Nine Questions to Help You Determine If a Business Is Truly an Excellent One
  17. Where to Look for Excellent Businesses
  18. More Ways to Find a Company You Want to Invest In
  19. What You Need to Know About the Management of the Company You May Invest In
  20. When a Downturn in a Company Can be an Investment Opportunity
  21. How Market Mechanics Whipsaw Stock Prices to Create Buying Opportunities
  22. Inflation
  23. Inflation and the Consumer Monopoly
  24. A Few Words on Taxation
  25. The Effects of Inflation and Taxation on the Rate of Return, and the Necessity to Obtain a 15% Return on Your Investment
  26. The Myth of Diversifications Versus the Concentrated Portfolio
  27. When Should You Sell Your Investments?
  28. Warren’s Different Kinds of Investments

PART II: ADVANCED BUFFETTOLOGY

  1. The Analyst’s Role in Ascertaining Earning Power
  2. The Mathematical Tools
  3. Test #1, to Determine at a Glance the Predictability of Earnings
  4. Test #2, to Determine Your Initial Rate of Return
  5. Test #3, to Determine the Per Share Growth Rate
  6. Determining the Value of a Company Relative to Government Bonds
  7. Understanding Warren’s Preference for Companies with High Rates of Return on Equity
  8. Determining the Projected Annual Compounding Rate of Return, Part I
  9. Determining the Projected Annual Compounding Rate of Return, Part II
  10. The Equity/Bond with an Expanding Coupon
  11. Using the Per Share Earnings Annual Growth Rate to Project a Stock’s Future Value
  12. How a Company Can Increase Its Shareholders’ Fortunes by Buying Back the Company Stock
  13. How to Determine If Per Share Earnings Are Increasing Because of Share Repurchases
  14. How to measure Management’s Ability to Utilize Retained Earnings
  15. Short-Term Arbitrage Commitments
  16. Bringing It All Together: The Case Studies
  17. How Warren Got Started: The Investment Vehicle
  18. Fifty-four Companies to Look At
  19. Waiting for the Perfect Pitch

Epilogue

Index

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