Great book---first tells you about how Buffett's philosophy was shaped, then goes on to give stories about the investments Buffett made. Educating andGreat book---first tells you about how Buffett's philosophy was shaped, then goes on to give stories about the investments Buffett made. Educating and highly readable....more
Great book--Lynch is a genius and his performance was fantastic. He's fantastic at what he does. My only bone to pick is that he's too much of a buy aGreat book--Lynch is a genius and his performance was fantastic. He's fantastic at what he does. My only bone to pick is that he's too much of a buy and hold guy (though he was a fund manager and I'm sure it's ingrained in him) and he clearly knows very little about options (although he admits it) Lynch tells people to stay away from options because they are risky--but then goes on to say that he actually knows nothing about options. So definatly take Lynch's advice on options for what it's worth, which in this particular case is his argument's intrinsic value. Fact is, options are alot less risky than stocks just so long as you know what you're doing.
But I digress..It's only a minor problem compared to how fantastic the book is..it really is a wonderful book, entertaining, full of stories, and I really learned quite a lot--and enjoyed-- reading it....more
I own both the hardback and peperback of this one. The paperback is the best of the two to buy because it has an extra chapter in the back of it fullI own both the hardback and peperback of this one. The paperback is the best of the two to buy because it has an extra chapter in the back of it full of great advice on 401k's.
Warren Buffett had two rules, Rule #1 is not to lose money, and Rule #2 is to remember Fight Club. Buffett was a student of Ben Graham's where he learned how to value a business on a purely quantitative level. Buffett later became also quite influenced by Phil Fisher, who was the grandfather of qualitative analysis. Graham and Fisher were polar opposites in their investing style: Graham knew all the valuations and numbers for the businesses he owned, but sometimes didn't even know the name of the busniness! And Fisher could have cared less if the business was overvalued..just so long as it had a great product and great managment and a solid moat. Buffett obviously took an approach that balanced the two extremes which proved very successful for him. What Town does is basically explain what a Rule #1 busnines has got to have which is Meaning (you have to understand the business like it was your own) a Moat (competition can't invade your investment and take all your money away on their horses) great Managment (think Steve Jobs or the Google guys) and Margin of Safety (like Buffett you want to buy a business for 50 percent off what it's trading at) As for the last one--margin of safety--Town explains in detail Buffett's method--which isn't written about in many places--how to value a business based on future earnings, rather than on p/e ratio--which is graham's method. This way, you get the odds in your favor that the business you are holding is going to beat earnings over and over again, and go up and up to it's real value (just as long as you bought it at a significant discount)
The last part of the book is Town explaining certain trading tools---the MACD, the Stocastics, and the moving average. No matter how great a stock, Town says, if the big guys are selling it, it could tank.
Trading a great company is definately something that makes Town's approach unique. Buffett never did this, but then again, Buffett is the biggest big guy--it;'s too hard for him to get in and out of a company to actively trade it--so it makes sense that he's been mostly a "buy and hold" guy. Town's approach makes definate sense in the internet age because one can, A) get the tools to track the stocks and see if the big fund managers are buying or selling and B) you can buy or sell within 10 seconds. It takes fund managers weeks or even months to get in or out of a particular stock. Why not profit from that?
ALl in all--very readable, very informative, wonderful approach. By far and away the best investment philosophy and the first book somebody should read on investing. Now go and play....more