Warren Buffet

Investment Style
Warren Buffett's investing style of discipline, patience and value has consistently outperformed the market for decades.

John Train, author of "The Money Masters"(1980), provides us with a succinct description of Buffett's investment approach: "The essence of Warren's thinking is that the business world is divided into a tiny number of wonderful businesses – well worth investing in at a price – and a large number of bad or mediocre businesses that are not attractive as long-term investments. Most of the time, most businesses are not worth what they are selling for, but on rare occasions the wonderful businesses are almost given away. When that happens, buy boldly, paying no attention to current gloomy economic and stock market forecasts."

Buffett's criteria for "wonderful businesses" include, among others, the following:
-> They have a good return on capital without a lot of debt.
-> They are understandable.
-> They see their profits in cash flow.
-> They have strong franchises and, therefore, freedom to price.
-> They don't take a genius to run.
-> Their earnings are predictable.
-> The management is owner-oriented.

Publications
Buffett has not, as yet, authored any books. However, his annual letters to the shareholders in Berkshire Hathaway's annual report are a suitable substitute. Back copies of these 20-page masterpieces of investing wisdom are available from 1977 through 2006 (updated annually) from Berkshire's Website.

-> "Buffett: The Making of an American Capitalist" by Roger Lowenstein (1996).
-> "Warren Buffett Speaks: Wit And Wisdom From The World's Greatest Investor" (1997)
-> "The Warren Buffett Way" by Robert G. Hagstrom (2005)