Word Warriors Public Speaking Club

Friday, January 25, 2008

Partial Review of "The New Buffettology" by Mary Buffett & David Clark

THE NEW BUFFETTOLOGY: The Proven Techniques for Investing Successfully in Changing Markets That Have Made WARREN BUFFETT the World's Most Famous Investor by Mary Buffett & David Clark

I am really excited to tell everyone about this book! Although, I have only partially reviewed the book (I have read 109 of the 278 pages in 2 days!). This book is phenomenal and turns the world of stocks on its head with both authors analysis of Billionaire Warren Buffett's stock picking style. His style is called "the Selective Contrarian Investment Philosophy" and this book takes off where "Buffettology" finished.

In a stock market that is guided by shortsighted investors looking for a quick buck, "The New Buffettology" explains the intricacies involved in picking stocks for the long term. Most of the methodologies used to pick stocks the "Buffett" way go against normal human intuition and the ingrained shortsighted stock market methodologies. The Here are a few interesting topics that I have learned thus far from the book:

There are two types of stocks:

1) Price-competitive, "Sick", Commodity-type Businesses (These are businesses Warren Buffett doesn't buy) - Businesses where price is the single most important motivating factor in the consumer's decision to buy.


2) Durable Competitive Advantage, "Healthy" Businesses (These are businesses Warren Buffett loves to invest in at the right price!) - Businesses that have a competitive advantage that allow it to earn monopoly like profits and are durable against competitive attacks

There are two types of businesses that possess competitive advantage:

1) Competitive advantage created by producing a unique product.


2) Competitive advantage created by providing a unique service.

There are 2 different things that Warren Buffett looks for when deciding to buy a business:

1) High Profit Margin


2) High Inventory Turnover

For a stock to appeal to Warren Buffett, it must have one of the three following relationships:

1) High Profit Margin and High Inventory Turnover
2) High Profit Margin and Low Inventory Turnover
3) Low Profit Margin and High Inventory Turnover

These are just a few things that I have learned from reading half of the book "The New Buffettology" by Mary Buffett & David Clark. I give this book a thumbs up and suggest everyone who is interested in reading about the 2nd richest man in the world, Warren Buffett, read this book to learn about his investing techniques.

If you have a book that you have written and are interested in having me review it, please send it to:

Raymond Miller
P.O. Box 718
Yucca Valley, CA 92286

along with a monetary donation in the form of a check made out to: Raymond Miller. (Books will not be returned to the author)

I hope you enjoyed the review of the book and be sure that you buy this book, which can be found at your local book store

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