The Warren Buffett Way

While Graham is the pioneer of value investing, there’s no question that his student, employee, and, ultimately, close friend Warren Buffett is its most successful practitioner. Although the essence of their respective approaches is similar, there are some important differences to understand. As the best book about Buffett’s investing style that I’ve encountered thus far, Hagstrom’s The Warren Buffett Way highlights some of Buffett’s most astonishing investment coups and the logic behind them. Upon reading both of those books, the reader will have gained a nuanced understanding of how Buffett took the Graham approach to business valuation/security selection and improved… show more.

Books written about Warren Buffett have become a cottage industry, one of which I am a part of. The first bestselling book in the space was written by Robert Hagstrom, which sold more than a million copies. Hagstrom’s book provides several pithy summaries of Buffett’s investment approach. For example:

Step 1: Turn off the stock market. Step 2: Don’t worry about the economy. Step 3: Buy a business not a stock. Step 4: Manage a portfolio of businesses.