The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

by Robert G. Hagstrom

Book Overview

The Warren Buffett Way provided the first look into the strategies that the master uses to pick stocks. A New York Times bestseller, it is a valuable and practical primer on the principles behind the remarkable investment run of the famed oracle of Omaha. In this much-awaited companion to that book, author Robert Hagstrom takes the next logical step, revealing how to profitably manage stocks once you select them. THE WARREN BUFFETT PORTFOLIO will...

• Format: Hardcover
• Language: English
• ISBN: 0471247669
• ISBN13: 9780471247661
• Release Date: April 1999
• Publisher: John Wiley & Sons
• Length: 246 Pages
• Weight: 1.20 lbs.
• Dimensions: 0.9" x 6.4" x 9.4"

Customer Reviews

Warren Buffett Portfolio---An Investment Gem

Hagstrom's second book is outstanding, especially for anyone looking to develop and define a rational investment style and process for managing their own money. As a professional money manager, I have read many books on investing, and like to refer the better ones to my clients. This one would be at the top of my recommended list, because it is clearly written, logical in its approach (Hagstrom backs up the tenets of his "focused portfolio" approach to investing with good empirical data), and provides a consistent and rational framework for people to invest their money. Hagstrom advocates that investors own relatively few stocks (maybe 10-15), and concentrate their holdings in companies that have a high probability of enjoying financial success over the long term. He points out the risks of this approach (fewer stocks in a portfolio can result in higher than average portfolio volatility in the short run, which can be disconcerting to some investors), but also highlights the success that Buffett and other practicioners of a long term, focused approach have had historically. Hagstrom includes interesting discussions of the math underlying his strategy, and the psychological factors that predispose a person to embrace or reject the principles of investing he recommends. The beauty of the book, and the focused portfolio approach to investing, is that it is logical, supported by solid mathematical principles, makes sense intuitively, is relatively easy to apply, skews the odds of outstanding absolute and relative total returns in the investor's favor, and provides a solid framework against which to invest in a world that is fraught with risk and dominated by a media culture that probably hurts more individual investors it helps (CNBC, internet sites, mutual fund advertising, etc). Hagstrom's approach is obviously not for everyone--despite its simplicity and logic, few professionals or individuals, in my experience, have the patience or discipline to concentrate their investments and stay with them over a period of years. But for those people looking for an approach that cuts through all the clutter in the investment world, this book is worth a read. For what it is worth, the best book on Buffett himself is Lowenstein's "The Making of an American Capitalist;" other must read or own books for do-it-yourself investors would include "Investment Policy" by Ellis, "Against the Gods" by Bernstein, "The Gorilla Game" (for technology stock investing) by Moore, "Classics" and "Classics II " by Ellis, and "When Genius Failed" by Lowenstein.

Invaluable to understanding how Buffett invests

I read Hagstrom's previous book, The Warren Buffett Way, years ago. This book taught me to apply Buffett's strategies in a whole portfolio -- in a way that is easy to learn and to apply.

This book adds something to the existing literature.

I read this book the week before the annual meeting and hoped Warren or Charlie would comment on it. Charlie Munger did not disappoint. He recommended it even though he did not care for Hagstrom's first book. As someone who enjoys reading Charlie's ideas and philosophy, which are usually published in Outstanding Investor's Digest, I found this book to be quite interesting. New and different ideas are covered which may inspire the reader to investigate further. The topics of probability and psychology are discussed as they relate to investing and some actual data is presented instead of the usual anecdotal evidence. If Charlie recommends it, it must be worth reading. Other books he recommended at the meeting were Ron Chernow's "Titan: The Life of John D. Rockefeller, Sr." and David Landes' "The Wealth and Poverty of Nations." Warren Buffett recommended reading Washington Post Chairman Katherine Graham's autobiography "Personal History" and John Bogle's "Common Sense on Mutual Funds."

Sound Methodology for Anxious Times

As a reader of a good number of investment books, I appreciate the service Hagstrom has done for both novice and serious investors with both of his books on Warren Buffett's investing. While I enjoy reading Buffett's annual reports courtesy of Berkshire Hathaway, I particularly enjoy the context provided in The Warren Buffett Portfolio. Of all the books on Buffett I find Hagstrom's the most educational and applicable to my own investment decisions. He also discusses various types of investments Buffett might not pursue give his own "core of competence" belief. I know the investment business would love to churn our stocks for us or the online brokerages want us to churn ourselves but Hagstrom makes a powerful case a better way of investing.

Investing not trading is for me!

I thoroughly enjoyed Hagstrom's book The Warren Buffett Portfolio. It took me step-by-step though what seems to me a very wise approach to investing. I would much rather emulate Buffett's strategy and avoid the droning talking heads on the financial tv who in the long run make much ado about nothing. This is a breath of cool clean mountain air. He delivers.