Robert Hagstrom set out to conduct the most detailed analysis of the principles of Warren Buffett (Warren buffett). He clearly succeeded: for decades, new editions of the book “Warren Buffett. How to turn 5 dollars into 50 billion ”and in different countries and are scattered in large circulations. This indicates that over the years, work has not lost its relevance.
Something had to be added, especially since Buffett himself continues his activities, but the basic principles outlined in the book are universal and unchanged, which is why they can suit any investor.
Robert Hagstrom was influenced by Buffett in his youth. The amount of all sorts of data that has to operate in the stock market can make your head spin, but Buffett seemed to be ordering all this chaos: the Berkshire Hathaway reports he wrote were invariably clear, and that was what impressed R. Hagstrom in the first place.
Although Buffett has achieved tremendous success, some believe that only he can apply his methods. Buffett himself disagrees. R. Hagstrom is sure that anyone can really use his methods, therefore he described them in his book. He consistently showed the origins of Buffett’s principles, how they began to take shape and strengthened, how he became more and more successful in applying them.
The author analyzed the strategies and reflections of the richest investor, accumulated over all these years, as well as the investments he made.
He also explored how the events of recent decades have influenced Buffett’s principles, and how they should be adapted.
Globally, everything remained the same, the author notes – rising and blowing bubbles gave way to falls, but Buffett continued to adhere to all his principles, and Berkshire Hathaway investors benefited from this.
In the rarely considered early stages of the biography of the billionaire, there are also many interesting things, so a significant place is devoted to them in the book.
The lessons of managing relatively small capital can teach a lot for investors.
On the other hand, Buffett himself believed that he made mistakes in those days – and it is also useful to learn from them.
The book details the criteria by which to determine the shares of which companies to acquire. It discusses what an investor should know about the management of the company, its finances and value. Another important aspect – portfolio management, is also not bypassed.
The reader will gain a lot of valuable knowledge by studying the principles of billionaire investments, while they are quite simple, do not require digging into obscure graphs or studying many pages of terminology. The psychological aspect is also being investigated – attention is paid to behavioral problems such as overconfidence and aversion to losses.
Download “How to Turn $ 5 into 50 Billion”
- Download the book “Warren Buffett. How to turn $ 5 into 50 billion ”in Fb2, ePub, PDF, Mobi and Fb3 can be right here. There are also other books on the topic here.
- You can read the full version of the book by Robert Hagstrom online or listen to the audiobook in the reader. Here you can very nicely and conveniently adjust fonts, indents, color and brightness, switch from text to audiobook and back, as well as get other books on the topic.
The main ideas and principles of the book
Here are some of Buffett’s key tenets:
When buying shares, consider that you are acquiring part of the business… If a company is going through hard times, it often attracts speculators, but not Buffett, if he does not see the prospects for sustainable development in the future. Likewise, if her business itself is not to her liking.
Business needs to be scrutinized… However, Warren is not guided by market theories, industry or macroeconomic trends. Three main topics are covered:
- How simple and straightforward the business is. According to Buffett, invest only in what you yourself can understand. If a company is working on things incomprehensible to you, then investing in it will be like a lottery. It is necessary to understand the most important aspects of her business. This will make it possible to give a correct assessment of the events in the company itself and around it, without which a conscious investment is impossible.
- Whether the results are stable. Investors are often attracted to companies going through reorganization, but Buffett has the opposite strategy – he invests in stable companies that perform well and without reforms, the consequences of which are unpredictable.
- Long term prospects. A sustainable competitive advantage is needed. The factors that provide protection from competitors are called the “moat,” and the wider it is, the easier it is for a company to get Buffett’s attention.
The guide should also be studied. – both in terms of personalities and the system by which appointments are made. Key aspects:
- Are the leaders’ actions rational? When the growth rate slows down, a choice arises: to reinvest profits in the company, acquire growth through acquisitions, or return the funds to investors. Here you should check whether reinvestment in the company is capable of increasing profitability in the first or second way, and if not, then only the third will be a rational choice.
- How sincere they are with investors – whether they provide comprehensive information and whether they are ready to admit mistakes.
- To what extent are they able to resist the “institutional imperative”, that is, ill-considered imitation of other leaders. Even experienced managers often make mistakes in this matter and begin to copy the actions of other market participants, although there is no such need – for Buffett, this was the most unexpected discovery.
Be sure to check the state of the company’s finances… Too detailed checks are not needed, it is enough just to find out a few basic indicators, including both classic ones and those developed by Buffett himself.
Establish the actual value of the company… To do this, you need to make a cash flow forecast. If it cannot be calculated with a sufficient degree of certainty, then Buffett does not invest in such a business.
The principles are considered here, and R. Hagstrom sets them out in much more detail, so that they form a harmonious system that allows you to make long-term investments and get almost guaranteed profit – the system is aimed at minimizing risks and investing in a well-functioning, well-functioning business with understandable prospects.
- “Despite all the vicissitudes of the financial market, it still obeys the laws of common sense. Buffett’s success is due to the fact that, guided by these laws, he knows how to find the right path and never deviates from it. “
- “Warren Buffett is convinced that cash flow data is often used by real estate and securities professionals to justify what has no justification, and thus sell what is not in demand.”
- “The main goal is to identify a company with above-average business profitability. Then buy the shares of this company at a price lower than its actual value. “
- “… If an investor is not able to calmly, without panic, watch the fall in the share price by 50%, he has no place in the stock market. In fact, he should welcome the fall in the price of these shares, regarding this as an opportunity to profitably increase his assets. “
- “The book is very interesting, from it you can learn that Buffett achieved his amazing success with the help of painstaking work. Most importantly, he developed his own principles and strictly adhered to them. It is very interesting to learn these principles, for this it is worth reading “How to turn 5 dollars into 50 billion.” Moreover, a detailed analysis is also given. “
- “For those who wish to learn more about Buffett’s ideas, this work will be very useful. Everything is stated in great detail and with examples. The book was published in Russian, so you can buy or download “Warren Buffett. How to turn 5 dollars into 50 billion ”in Fb2, PDF or some other formats. An audiobook has also been recorded – everything for the convenience of the reader or listener “
- “The book is replete with important tips for an investor, so I strongly advise everyone who is going to invest their money to read it. A solid approach focused on minimizing risks is proposed. At the same time, the author managed to make it easy to read ”.
- “If you want to become an investor, but do not know where to start, you can try reading the online book“ Warren Buffett. How to turn 5 dollars into 50 billion ”by Robert Hagstrom, and after that you will understand whether it is worth trying. This is a rather curious literature, although it is written dryly and can be difficult to digest. “
- “For beginners in the field of investing, this book can be important. Buffett is undoubtedly a great investor and his principles should be known. But their analysis in this book is rather superficial, only the most general ideas are given. In fact, the important could fit into 30 pages, no more, the rest of the information is not particularly needed – this is the main problem. “
Became famous Robert Hagstrom (Robert G. Hagstrom) primarily thanks to this book: its full title in translation is “Warren Buffett. How to turn 5 dollars into 50 billion. Strategy and tactics of a great investor ”. The original title more accurately conveys the essence and looks like this – The Warren Buffett Way: Investment Strategies of the World’s Greatest Investor.
Already in 1994, when the book was published, more than a million copies were sold, it was on the New York Times bestseller list for 21 weeks. A decade later, a second, updated edition was released. During this time, the book has established itself as one of the most important for understanding the key principles of investing. On account of Hagstrom and other popular books, in which he addresses a variety of aspects of investing.
At the same time, his own successes allow us to speak of the highest qualifications: he is not a journalist at all, just writing about the stock exchange. R. Hagstrom was born in 1956, and thus became the representative of the next generation of financiers in relation to Buffett (he is 26 years older). He studied Buffett as an example when he started his career, it was his lessons that helped in 14 years to rise from an ordinary investment broker to senior vice president and managing director of Legg Mason – a company that manages assets worth over $ 700 billion.
Hagstrom has over 30 years of experience in various investment-related positions and a number of achievements. He has received important awards as one of the most effective managers on several occasions. You can hardly imagine a more savvy book author on Buffett’s methodology.
Buffett’s principles are available to everyone. You do not need to constantly worry about the news and try to predict quotes: you just need to study the business well before buying shares, and be firmly aware that in the end the market obeys common sense and good business will flourish. Warren Buffett will tell you exactly how to study companies and find the best ones to invest in in this book.
The author did a great job when writing it: I processed Buffett’s notes and talked about him with many people to better understand his concepts. This is its main value: all important data in it are processed and systematized. And what has been done is a good indication of its success: high circulations, awards, translations into many languages and reprints decades after the first publication.