Book Review - The Warren Buffet Way

It’s book report time! In addition to stuffing my face, I have put the holidays to good use by catching up on my reading, so here is a book that any investor of any kind of investment should consider a “must read”!

It’s called “The Warren Buffett Way - Investment Strategies of the World’s Greatest Investor”, written by Robert Hagstrom Jr. and published by John Wiley and Sons, Inc. For those who aren’t familiar with Warren Buffett, he is probably the most famous investor in North America, and a man who has turned a $100 investment in 1956 into a 1994 net worth of approximately $10 Billion. When he talks, everyone should listen!

Although he has made his fortune by buying (and mostly keeping) businesses on the stock market, his investment principles and strategies apply equally well to other investments - including real estate. The book reveals the basic simplicity of Buffett’s thinking and common sense approach - an approached based on the ability to assess value by doing the necessary homework, and then being willing to act upon the knowledge without regard to the “mood” of the market.

On Market Timing:

“The most common cause of low prices is pessimism....We want to do business in such an environment, not because we like pessimism but because we like the prices it produces.” “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

On Investment Decisions:

“From his experience, Buffett has learned that good businesses enable the investor to make an easy decision, but tough businesses require difficult decisions. If the decision to purchase... is not easy, he will not pursue the (investment).”

On Basic Rules for Investment Success:

“Invest within your circle of competence” Buffett observes that investment success is not a matter of how much you know but how realistically you define what you do not know. “An investor needs to do very few things right as long as he or she avoids big mistakes.”

The book is available at most good bookstores in the Vancouver area and sells for approximately $20 or less at Costco. It’s a great investment!

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