THE WARREN BUFFET WAY

Book Review: “The Warren Buffet Way”



Book Review: “The Warren Buffet Way”

Introduction

“The Warren Buffet way” is one of the classic books on investment which tells the readers on how to efficiently invest in different capital markets to gain maximum return from their money. This book tells us about all the experiences which Warren Buffet has gone through his life as an investment guru. This book recommended to those individuals who are serious about investing in the stock market and also for all those people who works hard to have their money to be lazy. According to the Forbes magazine, Warren Buffet has been one of the top five richest people in the world. He has reached this point only through investing efficiently and cleverly in different markets and with different companies. Therefore unlike many other billionaires Buffett seems to be one of the few that can consistently stay on the list, showing that he knows not only how to not lose money, a trait that several billionaires seem to lack, he knows how to make money. At age 25 Buffett started his investment partnership with a 100 dollar investment. He started this partnership after he had worked in New York City for two years under his mentor, Ben Graham. Through management fees and capital appreciation, he left his partnership with 25 million dollars. All of this took place within the span of 13 years.

Critical Review of the Book

The time horizon of Warren Buffet is measured in decades. Think you have to buy shares as if the next day to buy the stock were to be closed for 10 years. This means that you have to put all attention on the future evolution of the company's business, forgetting what you can do in the short term trading. Buffet analysis focuses only on companies from a fundamental standpoint. It makes no foresight or study on the evolution of the quote, the macroeconomic variables, interest rates, etc. Always seeks to minimize the risks when investing, based on making a good fundamental study of each potential investment. Warren Buffet has not written any book. The annual report of his company, Berkshire Hathaway, is the only place where Warren Buffet writes about his investment philosophy. These reports are known in the investment community worldwide. Buffet included on many investment lessons.

This book describes the career of Warren Buffet as an investor, as well as the developments that have had their investment philosophy over it. It describes some of the most important transactions you made during your life and the reasons that led him to make Warren Buffet's philosophy is very useful for a small investor who has an eye on the long term. It is not directly applicable because some things are not within reach, as talking regularly with company management, access boards or influence company decisions.  It's a pretty safe investment style, as it avoids investing in anything that ignores and participate in high-risk situations, such as bubbles. For example, Warren Buffet had no share of technology companies during the Internet bubble, or during the ascent or during the descent. That means giving up potential, and riskier, higher benefits in exchange for equity safe ...