The New Buffettology: How Warren Buffett Got and Stayed Rich in Markets Like This and How You Can Too!

by David Clark and Mary Buffett

Book Overview

If you read the original Buffettology, you only know half of what you need to effectively apply Warren Buffett's investment strategies.

Published in 1997, the bestselling Buffettology was written specifically for investors in the midst of a long bull market. Since then we've seen the internet bubble burst, the collapse of Enron, and investors scrambling to move their assets--what remains of them--back to the safety of...

• Format: Hardcover
• Language: English
• ISBN: 0684871742
• ISBN13: 9780684871745
• Release Date: September 2002
• Publisher: Scribner Book Company
• Length: 288 Pages
• Weight: 1.25 lbs.
• Dimensions: 1.3" x 6.4" x 9.1"

Customer Reviews

Get an audio version instead

Many books have been written about Warren Buffet's way of picking the right stocks at the right time, but this one is the most sound, concise and actionable -- the formulas and algorithms given in this book aren't given anywhere else. There is another book similar to this one: "The Warren Buffet Way" by Robert G. Hagstrom, but it misses the important topics laid out in the "Buffetology". These major topics are: what are the differences between a "consumer monopoly" and a "commodity"; how to calculate the rate of return over a long period of time before choosing the investment; and so on. There is another great book about Warren Buffet and his investment strategy - "Buffet: The Making of an American Capitalist" by Roger Lowenstein, but it better describes Mr. Buffet's biography and his relations with family, friends and the society, rather than how did he evaluate the companies. But please note that "Buffetology" is not a replacement of the book by Roger Lowenstein, I highly recommend reading both of them. What is you can omit is the book by Robert G. Hagstrom, above mentioned. I would recommend an abridged audio version of the "Buffetology" instead of the printed book. The audio version discloses the most important factors of Mr. Buffet's investment principles pretty well. Some of the background information is available on free letters to shareholders and Mr. Buffet's lectures, but you might not want to crawl thought all these; you might want to save time and just listen the "Buffetology" audio or read the "Buffetology" book, where all this information is perfectly summarized and laid out in a consistent way.

An Illuminating Peek Into The World Of Warren Buffett

This book is a "most of what you need to know about value investing but didn't know what to ask" approach to the investment philosophy of Warren Buffett. I also own the first book, but didn't review it. This one is much better. The New Buffettology is a book of examples. I think that's what I like most about it. It has plenty of theory about the importance of a company having a durable competitive advantage, honest and able management, staying within a circle of competence, ensuring a margin of safety exists, how interest rates affect stock prices, and more. That's great, but the rubber hits the road with the numerous case studies of actual Buffett investments and how he applied the above concepts to help him decide to invest in Coca Cola, Gillette, the Washington Post, and Geico, to name a few. Along with the case studies come the formulas. Lots and lots of formulas. Does the company have strong earnings with an upward trend? Plug 10 years worth of earnings into your spreadsheet and calculate the annual earnings growth rate. Does the company return an above average Return-On-Equity? Mary Buffett & David Clark show you how to break out those Value Line reports and plug in 10 years worth of ROE numbers into your spreadsheet to calculate the average annual return on shareholders equity for the last decade. What's the stock's value relative to a Treasury bond? You'll learn how to calculate the answer here. The exercises go on case study after case study. I love it. Roll up your sleeves; dust off your BA-35 solar calculator and get ready to rock. If you want the skinny on value investing ala Buffett style, you had better be prepared to get your hands dirty because this is a thinking investor's book. This book doesn't just TALK about financial analysis. It shows you how to DO it. Nothing is more boring than long windy theories with no "meat" to back them up. This book serves up the meat in Texas sized portions. Exactly where does one go for 10 years of financial information? Where do you find the current government bond rate? What's important in an annual report? Just how do you find companies that make products with a durable competitive advantage? What should you read? What should you watch? What habits should you develop? How do smart investors use "scuttlebutt" to help them form an opinion about a company? The answers may surprise you. If value investing is what you want to do, then you have much to learn. And indeed, this book is a great place to start. It's not the only value investing book you should ever read, but is should definitely be one of the first.

A simple, easy to use antidote to irrational exuberance.

I recently retired at 30...or so I thought. Unfortunately, one can never truly retire, unless you have a particular immunity to the sound of your cash devaluing. It was like nails on a blackboard to me, my dreams of ignoring business and wrapping myself in the arts; good food, better wine...all gone. Gone with the realization of inflations dastardly influence on assets kept in cash. I knew I had to put money to work, but where? Coming from "inside" corporate america, that is, with an operational focus, I've always had an aversion to investing time or money into that which I didn't know, and I know there's an art to everything (especially investing). As a former CEO, I came into contact often with investors, and whether they were willing to pay more or less than my company's stock was worth wasn't the principal difference among them, the most striking difference was the amount of intelligence they brought to the analysis. I would often sit in on meetings and wonder when they'd start asking the important questions, instead, most would work their understanding through totally different (and I thought much less efficient) vectors. I always knew there was a much simpler means of analysis. This wonderful book is, for me, that analysis. Laid out in plain easy to understand terms and instructions, Buffettology taught me how to objectively value publicly traded stock with discipline. So what did I do when I put my first money to work? I ignored Buffettology's teachings, and bought stock in a company that I've always wanted, but Buffett would never buy. That cost me a car in my first week. Probably a cheap lesson in the grand scheme of things. I'm dumping that stock tomorrow, sharpening my pencil, buying that BA 35 Solar calculator, and applying some Buffett style discipline from here on out. Wish me luck...no cancel that, just pray that I have the good sense to follow his sage advice. Christian Hunter Santa Barbara, California

Great book, now improved

This book is an improved version of their original. Particularly better was the coverage on what makes a durable competitive advantage. Also, the formulas and approach was organized better.By reading the negative reviews of this book and its original you will find that this is a book written to be easily read. The authors did a great job of cleaning up the the "I knew Warren" tone of the first book.The only drawback of this book is its over-simplifying the complications that can occur when you do a value approach - particularly when you look at real data. Still, this new book gives many examples to walk the reader through the methodology.There is no statistical results shown that this method does indeed beat the market. You have to take it on faith that this methodology is used by Buffet, that it is what produced his great success, and that it can be duplicated in today's market.Still, this is a great book, and I recommend it to investors, and to businessmen who need to understand more about "durable competitive advantage" and the kinds of businesses they should be creating. There is much more that needs to be said about competitive advantage. There are several books on this (starting with Michael Porter). This book gives a simplified version.I think it is important to know that Buffet is not a Jack Welch type of manager. I would say he is closer to a Harold Geneen in that he is more of a "rentier" than a get-in-the-trenches manager/leader like Welch. This effects his choice of businesses. His approach is to own the only gravel pit in the county, and milk it for many years. This is certainly a good approach, but one that is difficult to pull off because a competitive advantage is difficult to hold on to.It appears that significant monies were made by Buffet using investments not following this method (hedging, speculating on interest rates). These have provided buffers against when the value investing techniques didn't work.Perhaps most important in the author's and Buffet's approach is the use of stock selection criteria that are outside of the radar of the average investor. And, that criteria is the screening on "durable comepetive advantage." Few investors screen stocks on this qualitative data. If this criteria indeed selects successful companies then you will do better than those without this information (assuming you buy right). After reading this book, you can find out more on competitive advantage and stock prices by reading the books by A. David Silver (Quantum Companies). He is one of my favorite authors on durable competitive advantage. You should also read some of the recent books on how to research companies, like the one by Hoover.There are many books on value investing. There is even a "Dummies" book on it. All of these are recommended because you will find that there can be a lot more to it than presented in this book. I would think that some kind of value investing test should be a requirement for all CEO's.

A Great Book For Making Money In Bear Markets

I've read all the "Buffett Books" and the Buffettology seies is the by far the best! Proof is pudding and these books have made me lots of money and, most important, have kept me from losing money. The New Buffettology explains how Warren Buffett avoided being slaughtered when the high-tech bubble imploded. It also explains in great detail how Buffett determines what companies to invest in during bear markets - a great thing to know! I bought this book (and I buy few new books because I sell used books for a living) because of the recommendation on the back by Tim Vic the celebrated author of "Wall Street on Sale" - in the world of value investing Tim Vic is the man - and I'm glad I didn't wait for it to come into the store! I highly recommend it for all serious investors who are interested in making money in this market! (If you read the original Buffettology -like I did -you are going to find that The New Buffettology explores new material that wasn't in the original - specifically how Warren determines when a market has topped or bottomed, plus the book contains the calculations that Buffett uses to determine when to sell a stock - something I've never seen before. Also there is an updated list of every stock Buffett has invested in - including his most recent investments - and a list of stocks that he will probably be looking to buy in this market. I also liked the in-depth study of Warren's arbitrage operations.) All in all it's a great book on the investment methods of Warren Buffett - the greatest investor of all time. I give it five stars and two thumbs up!!!