The Warren Buffett Way Book Summary - The Warren Buffett Way Book explained in key points
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The Warren Buffett Way summary

Robert G. Hagstrom

Investment Strategies of the World's Greatest Investor

4.4 (20 ratings)
18 mins
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    The Warren Buffett Way
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    A promising start

    When he was eleven years old, Warren Buffett made his first investment. He’d saved $120 from entrepreneurial endeavors like selling soda and peanuts. So he studied the price charts and confidently made his purchase. But as it often happens, the stocks dipped, immediately losing value. When they rose again to slightly above what he paid, Buffett panicked and sold at a profit of $5. Shortly after that, the stock value skyrocketed.

    He’d learned two tough lessons: He would never again obsess over what he paid for a stock. And he would never sell for anything less than a substantial profit.

    After that, everything Warren Buffett touched seemed to turn to gold. Not that he didn’t work for it – he graduated college and then fought for a position at Graham-Newman Corporation, where he got his real education in trading. Then, at the age of 25, he started his first limited liability partnership with a $100 investment and the simple goal of beating the Dow Jones by 10 percent a year. He ended up beating it by 22 percent – and, over a 12 year period, grew his investment to $25 million. 

    In 1965, four years before ending the partnership, Buffett bought Berkshire Hathaway, which had begun in 1889 as a cotton manufacturer. As the textile part of the business was slowly dying, Buffett made a decision that would shape the rest of his life. In 1967, he bought up the outstanding stock in two decently healthy firms: National Indemnity Company and National Fire & Marine Insurance Company. It was a dramatic departure from textiles – and it took Berkshire Hathaway from $2.9 million in securities to $5.4 million in just two years. This decision set the company on course to becoming the investing giant it is today.

    From his first limited liability investment of $100, Warren Buffett is now worth over $100 billion. Many people consider him to be a systemic anomaly. There’s a long-accepted school of thought in the investor world called the Efficient Market Hypothesis that says you can’t beat the market. And Buffett himself expresses that he won a genetic lottery, having the right skills in the right moment in time to flourish. 

    That said, the rest of this Blink will explore Buffett’s ability to beat the market not with chance, but with skill.

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    What is The Warren Buffett Way about?

    The Warren Buffett Way (2013) chronicles the unprecedented success of one of the world’s greatest investors. From his first $120 investment to his ultimate $120 billion net worth, it focuses on the history and strategies of the man who seemed to do the impossible: beat the market.

    Who should read The Warren Buffett Way?

    • Amateur and advanced economists and investors
    • People interested in success stories
    • Anyone who wants to learn about Warren Buffett’s life

    About the Author

    Robert G. Hagstrom is a New York Times best-selling author with 30 years of investment experience. He’s Chief Operating Officer of EquityCompass and Senior Portfolio Manager of the Global Leaders Portfolio. 

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