Bringing Buffett to the Beach
Classic books will help you buy and selland offer some juicy bits, too
You can explore Warren Buffett's winning investment strategies, plus take a peek into his personal life, in these books.
Buffett: The Making of an American Capitalist by Roger Lowenstein (Broadway Books). Many people know of Warren Buffett's riches and investment savvy. But here you'll get to know the boy who searched the local golf course for "used but marketable golf balls" and started a lemonade stand on a heavily trafficked street in front of a friend's house instead of his own quieter street. And you can explore the psyche of a father of three who, while married to one woman, lived with another, among other personal details about the man behind the investments.
The Winning Investment Habits of Warren Buffett and George Soros by Mark Tier (Truman Talley Books). What do Warren Buffett and George Soros have in common besides their self-made investment fortunes? Well, neither takes big risks or diversifies, says Tier, who reports he has adopted all the advice in this book and now lives solely off his investment returns. Instead, both are cautious investors who have learned how to protect their capital. Oh, and neither follows analyst reportsever.
The Intelligent Investor by Benjamin Graham (Collins Business Essentials). A cornerstone guide to investing written by Buffett's professor at Columbia Business School, former boss, and friend. Graham, Buffett has said, influenced his life "more than any other man except my father." Buffett wrote the preface and appendix in the revised edition. From both Graham and Buffett, you can learn to "control the self-defeating behavior that keeps most investors from reaching their full potential."
The Warren Buffett Way by Robert Hagstrom (John Wiley & Sons). In the past decade, investors have seen a market bubble burst and stocks tank before turning up again. Hagstrom describes Buffett principles, such as constructing a low-turnover portfolio and risking money only in companies you can understand and analyze, that he says will help you successfully invest under all market conditions. Hagstrom's advice may not necessarily make you rich, but he strives to protect readers from catastrophic losses in stocks.
The New Buffettology by Mary Buffett and David Clark (Rawson Associates). Grab a calculator, and brush up on your algebra before tackling the mathematical equations Buffett uses to decide which stocks he will buy. Buffett's former daughter-in-law Mary Buffett and a 30-year Buffett family friend, David Clark, walk you through calculations that show whether an out-of-favor stock is selling at a low enough price that you can buy it with almost no risk of losing capital. They also address how and why Buffett, who is famous for holding companies over the long term, decides it's time to sell a stock.
This story appears in the August 6, 2007 print edition of U.S. News & World Report.