Buffett Beyond Value: Why Warren Buffett Looks to Growth and Management When Investing

Appendix A. A Summary of the Book

Warren Buffett is a genius in the same league as Benjamin Franklin, Ernest Hemingway, and Henry Ford. Their ideas are simple to understand, but their successes are difficult to duplicate. However, geniuses abide by certain principles that we can learn from. In this book, I have tried to explain the principles that I believe Buffett follows. This appendix provides a succinct summary.

Table A.1. Summary of Warren Buffett's Investment Principles

	Principle	Explanation
(i)	Develop a Mind-Set to Win	You play a game because it's fun and even exhilarating when you win. You will win often when you play to your strengths. In the stock market game, this means staying within your circle of competence.
(ii)	Stick with Value Investing	Examine historical records, price-to-earnings ratios (P/E), and other financial measures.
(iii)	Combine Growth Investing with Value Investing	Management with integrity and competence is the key to growth. Make sure the quality of a company's management is outstanding.
(iv)	Maintain Low Risk	Low debt level. Reread (ii). Learn some accounting to look for possible hidden risks.
(v)	Act Rationally	Knowledge is the best antidote to irrationality. Know the company's business, and project what the company will look like in 10 years.
(vi)	Do Not Pay a High Price	Estimate a company's intrinsic value by learning about the company's business. Invest only when the price is low compared with the intrinsic value.
(vii)	Find Good People	Try to find and invest with outstanding ...