Read this book review to see if The Warren Buffett Way is the right investing book for you…
The Warren Buffett Way, by Robert G. Hagstrom, is a New York Times best seller with over 1 Million copies sold. And in this book review, I’ll tell you why it’s such a great investing book.
And you better listen up…
Because to be honest, The Warren Buffett Way drastically exceeded my expectations. Seriously! I thought I was in for a drab overview of Buffett’s investment style and life.
I was pleasantly surprised to find The Warren Buffett Way offered much more insightful advice for value investing disciples trying to apply the Oracle of Omaha’s wisdom.
In this book review, I’ll explain why I liked The Warren Buffett Way as much as I did. Thus, by the time you’re done reading this book review, you should have a good idea as to whether or not The Warren Buffett Way is the right investing book for you.
And since I just finished reading The Warren Buffett Way this morning, the lessons and ideas are still fresh in my mind. Now let’s get down to business…
What To Expect From The Warren Buffett Way:
I was a bit hesitant to read The Warren Buffett Way because I’ve already read so much about Buffett. I’ve read all of the Berkshire Hathaway Annual Shareholder Letters. I’ve read The Snowball. And I’ve read Lowenstein’s excellent biography, Buffett: The Making of an American Capitalist.
But I’m glad I decided to give it a shot.
The Warren Buffett Way isn’t about Buffett, as much as it’s focused on understanding how Buffett makes investing decisions (and how you can copy him). I was pleasantly surprised to find that The Warren Buffett Way cuts right to the chase.
The Warren Buffett Way introduces and explains important investing concepts that have shaped Buffett’s outlooks, like the Margin of Safety idea, and the allegory of Mr. Market.
Beyond the ideas, The Warren Buffett Way identifies other investors like Benjamin Graham, Phil Fisher and Charlie Munger, and shows you how they shaped and influenced Buffett’s investing methods.
Finally, all of this information is nicely wrapped up in a summary of Buffett’s 12 investing tenets. These 12 questions are a great jumping off point to evaluate your own investing ideas and stock picks like Buffett might. This thought-framework is especially helpful for readers looking to apply the lessons found in this investment book.
Having read so much about Buffett, none of these ideas or topics on their own were new to me. But the book was a valuable refresher on these important schools of thought. And the added clarification about Buffett thought about these ideas was more eye-opening than I had imagined it would be.
And I haven’t even told you about my favorite part of The Warren Buffett Way yet…
What I Liked Best about The Warren Buffett Way:
The Warren Buffett Way really dispelled with all of the fluff and mythology around Warren Buffett. Instead, it got right down to the business of value investing, and how Buffett applied it.
I think the best part of The Warren Buffett Way is how the author looks back on some of Buffett’s most prominent investments, and compares them to the 12 value investing tenets Buffett lives by. It’s neat to see how the ideas stack up compared to these criteria. Additionally, the investment examples span a course of 30-40 years, so it’s neat to see how Buffett’s investment selection criteria truly do stand the test of time.
Additionally, there is a section of the book on portfolio management that provided a lot more insight into how Buffett thinks about position sizing and risk management. I hadn’t seen these topics discussed from a Buffett perspective in this much depth before, so I also really liked this aspect of the book.
My only “complaint” about The Warren Buffett Way is that some of the chapters were quite long (like the one with the 9 investment examples). This is hardly a real criticism. But it’s the biggest drawback of the book I could think of. So anyway, by now you must be wondering…
Is the The Warren Buffett Way the best investing book for you?
The Warren Buffett Way – The Final Word:
The Warren Buffett Way is a fantastic summary of the way Warren Buffett makes investment decision. While Buffett didn’t provide input on the book himself, he did review the book and apparently didn’t spot any major red flags. So whether you are new to value investing, or a dedicated student of Buffett, I recommend you buy The Warren Buffett Way on Amazon today.
The Warren Buffett Way is an easy and fast read that provides a concise synopsis of Warren Buffett’s investment decision-making methodology. With that in mind, can you really afford not to read The Warren Buffett Way?
If you’re still curious to learn more about The Warren Buffett Way, I encourage you to watch the video book review below….
The Warren Buffett Way - Video Book Review: