You are previewing The Warren Buffett Way, + Website, 3rd Edition.
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The Warren Buffett Way, + Website, 3rd Edition

Book Description

Warren Buffett is the most famous investor of all time and one of today's most admired business leaders. He became a billionaire and investment sage by looking at companies as businesses rather than prices on a stock screen. The first two editions of The Warren Buffett Way gave investors their first in-depth look at the innovative investment and business strategies behind Buffett's spectacular success. The new edition updates readers on the latest investments by Buffett. And, more importantly, it draws on the new field of behavioral finance to explain how investors can overcome the common obstacles that prevent them from investing like Buffett.

New material includes:

  • How to think like a long-term investor - just like Buffett

  • Why "loss aversion", the tendency of most investors to overweight the pain of losing money, is one of the biggest obstacles that investors must overcome.

  • Why behaving rationally in the face of the ups and downs of the market has been the key to Buffett's investing success

  • Analysis of Buffett's recent acquisition of H.J. Heinz and his investment in IBM stock

The greatest challenge to emulating Buffett is not in the selection of the right stocks, Hagstrom writes, but in having the fortitude to stick with sound investments in the face of economic and market uncertainty. The new edition explains the psychological foundations of Buffett's approach, thus giving readers the best roadmap yet for mastering both the principles and behaviors that have made Buffett the greatest investor of our generation.

Note: The ebook version does not provide access to the companion files.

Table of Contents

  1. Cover
  2. Contents
  3. Title
  4. Copyright
  5. Foreword: The Exception
  6. Foreword to the Second Edition
  7. Foreword to the First Edition
  8. Introduction
  9. Preface
  10. Chapter 1: A Five-Sigma Event
    1. Personal History and Investment Beginnings
    2. The Buffett Partnership Ltd.
    3. Berkshire Hathaway
    4. Insurance Operations
    5. The Man and His Company
    6. Five-Sigma Event
  11. Chapter 2: The Education of Warren Buffett
    1. Benjamin Graham
    2. Philip Fisher
    3. Charlie Munger
    4. A Blending of Intellectual Influences
  12. Chapter 3: Buying a Business
    1. Business Tenets
    2. Management Tenets
    3. Financial Tenets
    4. Market Tenets
    5. Anatomy of a Long-Term Stock Price
  13. Chapter 4: Common Stock Purchases
    1. The Washington Post Company
    2. GEICO Corporation
    3. Capital Cities/ABC
    4. The Coca-Cola Company
    5. General Dynamics
    6. Wells Fargo & Company
    7. American Express Company
    8. International Business Machines
    9. H.J. Heinz Company
    10. A Common Theme
  14. Chapter 5: Portfolio Management
    1. The Mathematics of Focus Investing
    2. Focus Investors in Graham-and-Doddsville
  15. Chapter 6: The Psychology of Investing
    1. The Intersection of Psychology and Economics
    2. Behavioral Finance
    3. And on the Other Side, Warren Buffett
    4. Why Psychology Matters
  16. Chapter 7: The Value of Patience
    1. For the Long Term
    2. Rationality: The Critical Difference
    3. Slow-Moving Ideas
    4. System 1 and System 2
    5. The Mindware Gap
    6. Time and Patience
  17. Chapter 8: The World’s Greatest Investor
    1. The Private Buffett
    2. The Buffett Advantage
    3. Learning to Think Like Buffett
    4. Finding Your Own Way
  18. Appendix
  19. Acknowledgments
  20. About the Website
  21. About the Author
  22. Index
  23. Advertisement