A detailed look at how Warren Buffett really invests
In this engaging new book, author Prem Jain extracts Warren Buffett's wisdom from his writings, Berkshire Hathaway financial statements, and his letters to shareholders and partners in his partnership firms-thousands of pages written over the last fifty years. Jain uncovers the key elements of Buffett's approach that every investor should be aware of.
With Buffett Beyond Value, you'll learn that, contrary to popular belief, Warren Buffett is not a pure value investor, but a unique thinker who combines the principles of both value and growth investing strategies. You'll also discover why understanding CEOs is more important than studying financial metrics; and why you need an appropriate psychological temperament to be a successful investor.
Reveals Buffett's multifaceted investment principles
Discusses how Buffett thinks differently from others about portfolio diversification, market efficiency, and corporate governance
Highlights how you can build a diverse and profitable investment portfolio
With this book as your guide, you'll learn how to successfully invest like Warren Buffett.
Table of Contents
I. INTRODUCTION AND BACKGROUND
- 1. The Thrill of Investing in Common Stocks
2. 1965–2009: Lessons from Significant Events in Berkshire History
- 2.1. 1965: Not Throwing Good Money after Bad
- 2.2. 1967: Invest in Your Circle of Competence
- 2.3. 1973: Cash Flow Is King
- 2.4. 1977: Successful Growth
- 2.5. 1980: Buying Shares after Prices Fall
- 2.6. 1984: Reported Versus True Financial Results
- 2.7. 1985: Capital Expenditures
- 2.8. 1986: Corporate Jets and Other Luxuries
- 2.9. 1988: Holding Period of an Investment
- 2.10. 1989: Looking Foolish Versus Acting Foolish
- 2.11. 1990: Pessimism Is Your Friend
- 2.12. 1991: Risk
- 2.13. 1992: Stock Splits
- 2.14. 1993: Identifying Excellent CEOs
- 2.15. 1994: Extraordinary Results in Ordinary Businesses
- 2.16. 1995: Corporate Acquisitions
- 2.17. 1996: Selling Too Early
- 2.18. 1996: Hiring Practices
- 2.19. 1997: Patience
- 2.20. 1999: Taking Responsibility
- 2.21. 2000: Selling in Euphoria
- 2.22. 2001: Not Losing Focus When Disaster Strikes
- 2.23. 2002: Financial Weapons of Mass Destruction
- 2.24. 2008–2009: Market Crashes
- 2.25. Conclusions
II. BUFFETT INVESTING = VALUE + GROWTH
3. Value Investing—It's Like Buying Christmas Cards in January
- 3.1. Value Investing and Two Essential Principles
- 3.2. Other Helpful Guidelines for Value Investing
- 3.3. Does Value Investing Really Work?
- 3.4. Frequently Asked Questions
- 3.5. Conclusions
4. Growth Investing
- 4.1. Coca-Cola as a Growth Stock
- 4.2. How to Identify Growth Stocks
4.3. Importance of Track Record: Sales and Earnings
- 4.3.1. Is There Potential to Grow Sales and Earnings for Several Years?
- 4.3.2. How Are Relations with Employees?
- 4.3.3. Is Research and Development Important?
- 4.3.4. How Does the Company Respond to Challenges?
- 4.3.5. Is Management Quality Excellent?
- 4.3.6. How Important Are Profit Margins?
- 4.3.7. What Is the Company's Achilles' Heel?
- 4.4. One Example of a Non-Technology Growth Stock
- 4.5. Conclusions
- 5. Intrinsic Value
6. Buffett Investing = Value + Growth
- 6.1. Berkshire Hathaway Is a Growth Stock
- 6.2. Value Plus Growth
- 6.3. Examples from Berkshire Investments
- 6.4. Conclusions
- 3. Value Investing—It's Like Buying Christmas Cards in January
III. OTHER PEOPLE'S MONEY
- 7. Insurance: Other People's Money
- 8. Reinsurance: More of Other People's Money
- 9. Tax Deferment: Interest-Free Loans from the Government
IV. SUCCESS IN RETAILING, MANUFACTURING, AND UTILITIES
- 10. If You Don't Know Jewelry, Know Your Jeweler
- 11. Compete Like Mrs. B
- 12. Why Invest in Utility Companies?
- 13. High Profits in Honest-to-Goodness Manufacturing Companies
V. RISK, DIVERSIFICATION, AND WHEN TO SELL
- 14. Risk and Volatility: How to Think Profitably about Them
- 15. Why Hold Cash: Liquidity Brings Opportunities
- 16. Diversification: How Many Baskets Should You Hold?
- 17. When to Sell
VI. MARKET EFFICIENCY
- 18. How Efficient Is the Stock Market?
- 19. Arbitrage and Hedge Funds
VII. PROFITABILITY AND ACCOUNTING
- 20. M = Monopoly = Money
- 21. Who Wins in Highly Competitive Industries?
- 22. Property, Plant, and Equipment: Good or Bad?
- 23. Key to Success: ROE and Other Ratios
- 24. Accounting Goodwill: Is It Any Good?
- 25. How Much Psychology Should You Know?
- 26. How to Learn from Mistakes
IX. CORPORATE GOVERNANCE
- 27. Dividends: Do They Make Sense in This Day and Age?
- 28. Should You Invest in Companies That Repurchase Their Own Shares?
- 29. Corporate Governance: Employees, Directors, and CEOs
- 30. Large Shareholders: They Are Your Friends
- Conclusion: B = Baseball = Buffett
- A. A Summary of the Book
- About the Author
- Title: Buffett Beyond Value: Why Warren Buffett Looks to Growth and Management When Investing
- Release date: March 2010
- Publisher(s): Wiley
- ISBN: 9780470467152