The Essays of Warren Buffett : Lessons for Corporate America
Author: Warren Buffett, Warren E. Buffett, Lawrence A. Cunningham
List Price: $25.00
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ISBN: 0966446119
Publisher: Lawrence A. Cunningham (The Cunningham Group) (11 April, 2001)
Sales Rank: 599
Average Customer Rating: 4.64 out of 5
Customer Reviews
Rating: 5 out of 5
Wisdom from the Heartland
This collection of essays by Warren E. Buffett, compiled by Lawrence A. Cunningham, is an excellent introduction to basic investment concepts that have proven successful for the 'Oracle of Omaha' and his loyal following. The reader will want to supplement these papers periodically with more timely updates from the annual letter Buffett writes to the shareholders of Berkshire Hathaway. Buffett's ideas have been widely reported so there are no surprises here. To be sure, Buffett is consistent. He pokes fun at the 'efficient market' school which confuses stock price with stock value. Early on we hear him calling for the expensing of stock options and urging more transparent, segmented financial reporting by large companies. For Buffett mechanically rebalancing portfolios to achieve diversification, back in fashion, may miss the point of holding-on to your best investments for superior returns. Distinguishing between Growth and Value styles of investing is unnecessary and misleading. If you have ever wondered why Berkshire Hathaway does not pay a dividend or why it doesn't split its high stock price, Buffett gives his reasoned explanations. It was Warren Buffett's fundamental school mentor Benjamin Graham who introduced the allegory of Mr. Market and the concept of 'margin of safety' both of which get satisfactory attention here. Most importantly, I think, Buffett reminds us continually that as stock market investors we are buying for the long-term parts of real businesses that produce measurable cash flows as evidence of their intrinsic value. Real businesses that produce real value are run by dedicated, competent leaders who know how to allocate capital. Hanging-on to such deceptively simple principles can get an investor through some very rough market cycles. Reading this collection is a lot like listening to the conversation of an avuncular and very experienced elder who with great patience, common sense, and wit explains what principles have guided his (investment) life. Indeed uncommon sense and integrity are hallmarks of Warren Buffett's writings. Humor too. In what other serious investment study will you get quotations from such luminaries as Woody Allen, Mae West, and Yogi Berra. Buffett loves aphorisms to make his point. I challenge anyone reading this book not to underline or commit to memory some of these gems. For a general introduction to the fundamental school view of investing this collection is required reading.
Rating: 5 out of 5
Proper Business Practices
"The Essays of Warren Buffett" is a textbook on proper business practice used at Cardozo Law. Yeah, I know you can go to the Berkshire Hathaway website and get all of Buffett's letters to the shareholders (in fact those who truly want to know more can do this). But this book cuts to the chase. It is edited in such a way that the essays are grouped in a logical manner. Thus, you don't have to plow through all the letters ( which at times can be boring and redundant).This makes reading rather convenient and efficient. The parts of the book that are most useful for an individual investor are the sections on "corporate governance" (in which Buffett describes what makes a good CEO and Board) and on "corporate finance and investing" ( in which Buffett argues against the Efficient Market Theory and argues for the Graham-Dodd approach). I found the essays on "accounting and valuation" and "accounting policy and tax matters" a bit tedious (though the section on stock options was rather interesting).
Rating: 5 out of 5
The Wit and Wisdom of Warren Buffett
If you are used to reading public company annual reports, including the (usually) short letters from company presidents, you know how shallow, self-congratulatory and sometimes even misleading these reports can be. On the (extreme) other hand, Warren Buffett's annual letters in his Berkshire Hathaway annual reports represent detailed, on-target, lively and highly readable masterpieces of valuable education, information, and wit. You can read Buffett's annual letters for free at Berkshire Hathaway's website, but it will take you a while, since there are many of them (back to 1977) and they run 20+ pages each. Further, Buffett's various letters weren't intended to serve as serial chapters of a book. Better, you can shell out the cost of Lawrence Cunningham's thematically organized collection (220 pages or so)of Buffett's essays and gain a better appreciation of the numerous important topics that Buffett addresses. These topics include, first and foremost, the critical impact of the quality of corporate governance--Buffett was years ahead of most investors in focusing on this area. Other topics include corporate finance (addressed with a clarity that is both unusual and revealing of Buffett's powers of insight), mergers and acquisitions, accounting (Buffett is the only person I know who can regularly make accounting seem positively interesting), taxes, junk bonds and much more.Moreover, Buffett's Berkshire Hathaway is nearly unique in its intense commitment to shareholders. The opposite (a commitment to management entrenchment and exorbitant compensation) is the norm with so many companies today that it would be easy to forget how vital shareholder primacy should be. As you read Buffett's essays you will have a model to measure other companies against--which should come in handy the next time you exercise your voting rights as a shareholder.
Life is short. As an investor or a concerned citizen-shareholder, you can learn through your own experiences, of course. There's nothing wrong with that, but the process can be long and expensive. (Depending on one's experiences, it can be very expensive.) Alternately, you can learn via Warren Buffett's lifetime of experiences distilled into a very readable, lively, fascinating collection of his essays. Buy the book-I doubt that you'll regret it.
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