A Few Lessons For Investors and Managers From Warren Buffett – Peter Bevelin

This book is essentially a compilation of quotes from Warren Buffett on investing and his strategy. There are so many great points throughout this book but here are the points that I have taken away:


1. When looking at the price of an investment, it is the rough approximation of how much you will receive over the life of that investment at it’s present value (time value of money).The value of any stock, bond or business today is determined by the cash inflows and outflows – discounted at an appropriate interest rate – that can be expected to occur during the remaining life of the asset.


2. When deciding on investing, ask yourself what the intrinsic (real) cost of that investment is worth. Don’t invest in it if you believe it’s worth less than its stated price.Book value is almost unrelated to value. It’s per-share intrinsic value, not book value, that counts. You can gain some insight into the differences between book value and intrinsic value by looking at one form of investment, a college education. Think of the education’s cost as its “book value.” If this cost is to be accurate, it should include the earnings that were foregone by the student because he chose college rather than a job.


3.Managers that always promise to ‘make the numbers’ will at some point be tempted to make up the numbers.


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4. This is how Warren Buffett invests. This is exactly why he holds a significant amount of shares in Coke. They meet the criteria of all 3.THE REALLY GREAT BUSINESS: High returns, a sustainable competitive advantage and obstacles that make it tough for the new companies to enter.


5.Don’t confuse ‘cheap’ with a good deal.”


6. “We believe that short-term forecasts of stock or bond prices are useless. The forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.


By Ryan Lee


My rating:
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Check out the book here:
Amazon USA

Amazon Canada


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