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Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage
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Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage

3.82 of 5 stars 3.82  ·  rating details  ·  450 ratings  ·  52 reviews

With an insider's view of the mind of the master, Mary Buffett and David Clark have written a simple guide for reading financial statements from Warren Buffett's succccessful perspective.

Buffett and Clark clearly outline Warren Buffett's strategies in a way that will appeal to newcomers and seasoned Buffettologists alike. Inspired by the seminal work of Buffett's mento
ebook, 224 pages
Published October 14th 2008 by Scribner (first published 2008)
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I am an accounting and finance professional with 10 years' experience in advising clients on cross-border merger & acquisition transactions, international tax structuring and business model optimizations. I read companies' financial statements regularly to gain understanding of a company's business operation, source of revenue, financing situation, cash flow, global effective tax rate, and etc. I wanted to read a book about interpretation of financial statements from investors' perspective, ...more
This was one of the most redundant books that I've ever read. If I ever hear "durable competitive advantage" again or see the word "superrich", I will literally scream. She used the terms at least once a page. Near the end of the book, the author had the audacity to say "at the risk of being redundant" to express yet another oversimplified concept. This was unintentionally hysterical given that her redundancy was noticeable on page 5. Not only was this book redundant, it was poorly written. The ...more
If you've never taken an accounting course, you may find this book worth the read as it does a fairly decent job at defining the main line items on financial statements. That is, if you can get through the constant repetition and massacre of the phrases "durable competitive advantage" and "Warren says...".

Personally, I found the writing to be poor, and the book is full of errors - the "gain" on the income statement is treated as a loss, and worst of all, the balance sheet doesn't balance! Anywa
Mary Buffett seems like a ghastly parasite - capitalising (and no doubt making lots of money) from her surname, obtained during a 12 year marriage to Warren Buffett's son. Why this should make her an expert on his investment process is not clear.

Despite these grave and continuous reservations on my part, and her persistent use of "Warren" this and "Warren" that, this book is fairly useful for individual investors who want a crash course in basic accounting.
Krishna Kumar
A dry, short book that explains which elements of financial statements does Warren Buffet pay attention to when he estimates the value of a company. In a typical company’s annual statements, there are many different figures. It is a mistake to focus on each of those figures because they can obscure the real truth of what is going on. This book provides insight into which numbers are more meaningful than others.

The book does more or less what it claims to do. The authors use a point-by-point anal
Aug 25, 2009 Tess is currently reading it  ·  review of another edition
A good intro to evaluating financial statements to pick investments or simply understand the strength of companies.
Effendy Yahaya
Excellent book. Compact and full of direct detail from finance, account and economic impact that Mary & David elaborate in a very straightforward meaning. It touches on previous financial crisis in 2007, reasons on why the effect of increase in bond and stock prices. The economic value, share prices, the effective on how companies doing sales up to how board functioning, reasoanably. This book has brought the gist idea of what Warren Buffett focusing on, diligently and considerably. Will lik ...more
Terry Koressel
Ok, the title makes the book sound like a guaranteed bore. With all honesty, the book deals entirely with interpreting financial statements with the aim of finding companies with a sustainable competitive advantage. Most great companies in this category exhibit certain financial characteristics and the authors explain Warren Buffet's positive signals that he identifies as he examines such potential companies. However, be prepared. It is a walk through each account on the balance sheet....through ...more
John Hibbs
The Book accomplishes what it intends to be, a simple primer on how Warren Buffett invests, which means reading financial reports for critical details that tell you the financial health of the company and from that understanding, where it is going in the future.

The book features over 60 short chapters starting with Buffett's philosophy on investing for the long haul and then, in a very simple format, breaks down financial statements; income statements, balance sheets and cash flow statements. T
Pui San
This is a good reminder for those equipped with accounting knowledge, and a great stater kit for those with none.

Pro and seasoned investors may find this book elementary but this is definitely recommended to any newcomers who are in search of their first book on the subject of "accounting" or "investing". I find this is a good how-to book for people who are keen in breaking down the rocket science of reading a set financial statements and to ultimately learning how to distinguish a quality stock
At first, it seemed like a stupid book.
But then, the objective of the book became clear. It is a simple breakdown of the essential elements of analysing a company.
It is a book for people who want to acquaint themselves with the basic tenets of a fundamental approach to investing.
The last part of the book was also quite different an approach towards choosing companies.

If you think you know all there is to know about valuations, this will give it a new spin.
A quick, easy read about the basic principles of investing in solid, well-run companies. The book, for the most part, hits on the key points and sometimes glosses over more important points, but it is a decent guide to investing.

I wish the authors had spent more time on determining the "correct" price to buy securities. They did touch on this point towards the end, but went from more basic discussion to very technical, with little explanation as to their figures. Quite honestly, I think this mi
Clement Ting
Overly simplistic, but a good starting point for people that does not know what is a balance sheet, income statement and cashflow statements. The explanations are draggy and half the book are a huge waste of time. 1 chapter on average lasts about 2 to 3 pages, and all its chapters end with almost the same philosophy which can range between an annoying 2 to 3 paragraphs on average.
Vaishali Joglekar
This is it, guys. This is the primer on stock selection, and all you really need to know. One of the most valuable books I've ever come across. Very smart, very succinct, and immediately applicable. Do everything she outlines (why would you not ??????) and wait patiently. Very helpful if you're a business-owner as well, since it inadvertently tells you what investors look for.
As an introduction to balance sheets and profit/loss statements this book is quite effective. The links to Warren Buffet are very tenuous and painfully repetitious, suggesting the book was conceived only to extract value from a name. It's a shame, because if this book was marketed as a small beginners guide to financial statements, it would have achieved its goal admirably.
Includes some interesting observations about Warren's investment strategies. It did renew my interest in perhaps doing some investing as a hobby. The descriptions of basic accounting terms would be good for the uninitiated, and the equations she describes are all easy to follow. (though not as easy while driving...)
I got this book because I had realized in my MBA classes that I needed to get better at reading financial statements and figuring out the story behind the numbers. I can't say this book helped me with that. While it was interesting enough and is good for a beginner, if you have had any accounting classes it becomes a bit simplistic. The book was extremely repetitive - it definitely took the approach of trying to grill specific points into you - and simplistic to an almost offensive point. Did it ...more
The Oracle from Omaha didn't even write this book, but there is so much you can learn here. Financial statements should never be an obstacle to your comprehension of a company financial strength - or weakness. Highly recommended for non-finance managers.
It is a good book if you've just started investing and want to be more familiar to financial language.
No, definetely, it is not possible to invest without reading Financial Statements. If you don't read, you gamble, don't invest.
The book is very simple. It was very easy to understand difficult concepts. So I recommend reading it.
But I feel the name 'Warren Buffett' is on the title only for selling more books. If the title were 'Pratical Tips for All Investitors Interested in Reading Financia
Ezra Crangle
Excellent book for starters in the fundamental analysis world by Warren Buffett eye's. You're gonna know how Warren reads the income statement, balance sheet & the cashflow statement.
Stella Liang
A must-read book to understand Annual Reports (AR) interpretation.

It will teach you how to comprehend the numbers in every company AR, how to access their health etc.
Read this in the car on the way to Disneyworld. My only wish is that I had made my pen and paper more accessible so I could have taken notes.

I'd really give this closer to a 3.75 than a 4, only because of the chipper, cheerleader-like method of closing the chapters that gave me a headache. However, the information was very clearly explained, and there were several comparisons to stocks Buffett holds/has held. She broke the math down into understandable chunks and highlighted what makes a compan
Christopher Durand
good walk through on financial statements as well as some decent insight behind them. most with an accounting / finance background probably won't get much from it though.
Shreyans Daga
Excellent insights on finding a business with Durable Competitive Advantage by analyzing the Financial Statements of a company. Will recommend to persons who want to start their journey on true value investing.
Sound, basic, reading for any investor; perhaps more so to members of investment clubs.

Personally, I found the style of writing annoyingly American in idiom; but then, this is an American text. Even the dimensions of the book are an American format! So that gripe of mine is difficult to justify.

The end message is very simple. Do not invest in what you do not know or do not understand. Simple, yes. But isn't it incredible how many people ignore that!
I guess some will say it is repetitive, but I think this gives you an understanding of what makes a "good" business and by good I mean large businesses that have been around for a while and should be around in five years time with some sort of advantage over the competition. I have no business experience whatsoever so this book gave me a starting point to cut out all the less successful companies and appreciate what makes a business what it is.
Warren Buffett's mentor, Benjamin Graham, was all about cheap -- buy a portion of a company at much less than it's worth. Buffett, on the other hand, has said that he would rather buy a great business at a fair price than a fair business at a great price. So what's a great business? One that's abnormally profitable, & likely to continue being so -- one that has a "durable competitive advantage," says Mary Buffett.
This book did an excellent job of explaining each component of the three different types of financial statements. This book was a very good accounting course in addition to being a guide that helps the reader to understand how Mr. Buffett uses financial statements to make his investment decisions.
Отличная книга, в которой шаг за шагом описан алгоритм выбора компаний для инвестирования. В книге уделено внимание различным аспектам деятельности компаний.
Очень хорошее руководство для начинающих.
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