In the past two years, there have been a lot of people who have started to write a book in the domestic market for a few years. Recently, I have seen several books in the bookstore, and I have written some books and then opened some private placements. At the beginning of this kind of book, I also seriously turned over it. Later, the interest in turning over was not great, because the overall quality is not high. Instead of reading these books, it is better to read the investment classics that have been tested over time.
Exploring Buffett’s investment ideas
Talking about securities investment books, the most easy to think of is Benjamin Graham’s Securities Analysis. Gee is the originator of value investing. This book is respected in the investment world and is referred to as the “investor’s Bible.” To really understand this book requires very solid financial knowledge. The US accounting system is different from the Chinese accounting system. The early US accounting treatment is different from the current accounting treatment.
As the most outstanding disciple under the Ge’s door, Buffett’s most respected is actually another book of Gee’s “Smart Investor.” “Securities Analysis” is aimed at professional investors, and this book is for general investors. The so-called avenue to Jane, this book based on methodology is actually more influential.
Buffett said that in his rich collection of books, there are four special cherished, and they are all long-standing works of publication. The top two are Adam Smith’s The Wealth of Nations (first edition of 1776) and Graham’s Smart Investor. Shortly after the publication of the book in 1949, Buffett, who was still very young, was greatly impressed after studying. He decided to apply for an MBA from Columbia Business School and worship at Gers.
In fact, Ba students also applied for an MBA at Harvard Business School, but they were not admitted. Harvard also missed the most outstanding investment master in history. From a utilitarian point of view, Harvard has no loss. After all, the minibus became the enemy of the old Pakistani rich, and did not give money to Columbia. Most of the money was donated to the “Bill and Melinda Gates Foundation.”
Of course, Buffett also praised Securities Analysis. He has a 1940 edition of Securities Analysis, which has been read four times. Walter Schloss, another outstanding disciple under the door of Ge’s, is also an investment master. He is the master of Buffett. Shortly after the publication of Securities Analysis, a partner of his company recommended the book and said to him, “Read this book. When you know everything in the book, you don’t have to read any other books.” Los later joined Graham’s advanced securities analysis course and became one of the earliest disciples of Griffith. In Schloss’s long investment career, he has repeatedly read “Securities Analysis”.
Unlike his teacher, Buffett has no habit of writing a book. If you want to understand the original Buffett investment ideas, the best reading is his letter to Berkshire shareholders, his investment philosophy, stock picking ideas, corporate governance, management evaluation, investment portfolio, accounting treatment Etc. In the early days, Buffett also wrote a letter to investors when he was running his investment partnership. These letters are also worth reading.
The excerpts of Buffett’s shareholder letter have been published both at home and abroad. I also read this excerpt, I feel a bit like reading the essence of Jin Yong’s novels. No matter how vivid, it is better to see the whole leopard directly. I have searched for Buffett’s shareholder letter. The common way is to go to Berkshire’s official website. The downside is that the shareholder letter is not complete. In the afternoon, I found out that Amazon has started selling “Berkshire Hathaway Letters to Shareholders”. The rhubarb skin is thick and thick, unpretentious and original.
It’s hard work to sink into the hearts of these shareholders’ letters. It’s not as good as calling friends to attend the annual Buffett’s shareholder meeting. At that time, Qian Zhongshu became famous because of the heat of “The Besieged City”. He was too tired to visit the visitors. It is said that he complained: If you eat an egg and feel good, why do you need to know the hen that lays eggs? But now the pilgrimage to Omaha every year to see this “golden hen” will be much more than the people who read his letter to shareholders.
In addition to the shareholder letter, Buffett actually has a short article, “The Superinvestors of Graham-and-Doddsville.” This is a famous speech delivered by Buffett at the Columbia Business School to commemorate the 50th anniversary of the publication of Securities Analysis. This presentation refuted the market’s effective theory with the true performance of many famous value investors (many are Graham students or believers) and proved the validity of value investment. To this day, this article is still the designated reading material for many business school securities analysis classes.
Although old Buffett is not willing to write a book, his book on investment ideas and investment strategies can be described as full of enthusiasm, and there are many high-quality books. I think the best one is “The Way of Buffett.” The author Robert Hagstrand is a leading financial writer and is known for his expertise in explaining Buffett and Munger. Translator Yang Tiannan has studied abroad and privately raised people in the industry. Translation majors are in place, unlike many financial translations of books that are often missed.
Reading a biography is also an option. The best in this regard is the 1999 edition of Buffett: A Growth of American Capitalists, by Roger Lowenstein. He is a senior reporter in The Wall Street Journal and a leading American financial writer. His books are almost classic, such as “When Genius Failed” (the domestic simplified Chinese version translated as “the gamblers: the rise and fall of long-term capital management companies”), “The Endof Wall Street”, etc., are all in the United States A must-read reference book for business schools.
Another more widely known Buffett biography, Snowball, published in 2008, was written by Alice Schroeder, an analyst at Morgan Stanley. The main difference between the two books is that Roger’s book was published earlier, and there is no Buffett license, mainly based on public information. Alice is different. She has obtained the exclusive authorization of Buffett, and has repeatedly communicated with Buffett to get a lot of exclusive materials. In short, old Buffett is completely open to her. After the book was published, the two fell out. Originally in the book, Alice revealed that Buffett was very unhappy in the field of love when he was young, and others fell in love with him. His first wife, Susan, originally had a boyfriend. Buffett had been patiently waiting for Susan to break up with her ex-boyfriend, and then saved the country by curve, first settled the old man, and finally married Susan. Their married life is very calm, but it is hard to say that the music is harmonious. Alice may have told the truth, but it turned out, and of course, Buffett’s face could not be hanged.
From the perspective of understanding Buffett’s investment ideas and mental journey, although Roger’s book was written earlier, it is obviously higher, not only fluent, but also a well-described description of Buffett’s investment growth. “Snowball” is more embarrassing, like to entangle in the fine details, a little see the feeling of the trees without the forest. So, Roger’s book has been read several times, but Alice’s book is all over. Of course, if you want to know more about Buffett’s private life, Snowball may be a better choice.
From Fisher to Cairns
Not everyone is admiring Graham, such as Buffett’s close comrade, Charlie Munger, who has reservations about Graham. But Buffett and Munger are very admired by one person, that is, Philip Fisher. In the early days, Buffett said that his investment system was “85% Graham +15% Fisher”, but later he admitted that he was probably “50% Graham + 50% Fisher.” Graham taught him to buy stocks at a price below the company’s intrinsic value, focusing on safety margins. Fisher explained that from the perspective of medium and long-term investment, buying a good company at a reasonable price may result in higher returns than buying a good company at a cheap price.
Fisher is also a master who likes to talk about books. His first book, How to Choose Growth Stock, has long been regarded as an investment classic and has been studied by countless people. Ge’s book focuses on quantitative and financial reasons, hoping to buy something worth 1 yuan at a price of 5 cents or less. Fisher’s book emphasizes qualitativeity, and studies the essence of the enterprise through various means, and holds it in the medium and long term.
Fisher’s master status is unquestionable, but perhaps considering the non-professional investors, this book is awkward and quite embarrassing. He also wrote two other investment monographs, but the impact is not as good as “How to choose growth stocks.” Philip’s son, Kenneth Fisher, is also a well-known fund manager. He has also published several investment monographs such as “Super Strong Stocks” and has long written a column for Forbes magazine, a better author than his father. From the perspective of the scale of fund management, the son is also far better than his father.
In addition to Graham and Fisher, John Maynard Keynes actually has a greater impact on Buffett, such as the idea of concentrated investment. Perhaps Cairns, a macroeconomist, has a reputation for being too popular. Many people ignore that he is actually a master investment person. From 1928 to 1945, he managed the Chester Fund of the University of Cambridge in the United Kingdom, with an annualized rate of return of 13.1%, far exceeding market peers. Keynes has written a lot in his life. In addition to the macro book “General Theory of Employment, Interest and Money”, he has also been involved in finance and taxation. However, Keynes has only sporadic discussions on stock investment, and there is no systematic monograph. Perhaps he believes that stock investment is a “small path” compared to macroeconomic policies that can affect millions of people.
After Buffett, the youngest generation of the most famous value investing master is Seth Karaman. Someone asked Buffett’s successor in the past few years. He gave three candidates, and Karaman was the first. He is the president of Boston-based famous “Baupost” hedge fund company, nicknamed “Little Buffett”, with a fund management scale of more than $30 billion. He does have something like Buffett. For example, Buffett is known as the “Omaha Prophet”, and some people call Karaman “Boston Prophet.”
From the teacher’s generation, Buffett is probably equivalent to Karaman’s uncle. Because Karaman graduated from Harvard Business School, but the two people who are deeply influenced by them are Michael Pres and Max Heine, both of whom are directly or indirectly taught by Graham. It can be regarded as the same generation as Buffett. After graduating from Harvard, Karaman joined the two funds “Mutual Shares”, which are at the helm of the big investment, and got first-hand training. Later, Karaman felt that what really benefited him was not Harvard Business School, but Prius and Heine.
Karaman also wrote a book, but only wrote one book called “Safety Margin”. From the title of the book, he can be seen as a deep value investor. This book was published in 1995. As Karaman’s reputation grew, the “Margin of Safety” began to become expensive in Luoyang. However, he has neither released an updated version nor reprinted it. Therefore, in order to buy the original version, you can only buy second-hand books on eBay or Amazon. At the height of the book, the book was smashed to more than 2,000 US dollars. Currently on Amazon, it is still priced at more than 1,500 US dollars.
