Warren Buffett

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Warren Buffett

Warren Buffett, the ‘Sage of Omaha', is generally considered to be the world’s most successful investor. His investment vehicle, Berkshire Hathaway, is legendary.

Investors would love to know the secret of his success - to know how he became America’s second or third richest man, and a living legend.

Warren Buffett does not give stock tips, and why should he? He does however, from time to time, sound out investment principles in his annual letters to Berkshire Hathaway stockholders, in reports to annual meetings and, from time to time, in the media.

His investment secrets can be gleaned from these comments. This web page represents what we think those secrets are, but we can never know for sure.

What we can say is that as you discover them, and think about them, they invariably seem to spell out good, common sense, investment principles.

The best place to start exploring Buffett's ideas is our article on Warren Buffett's investment principles, which will lead you, step-by-step, through the tests we believe Buffett uses in determining which companies to invest in. Or go here for a biography of Warren Buffet

Full list of Warren Buffett articles available at this site

Investment principles of Warren Buffett - A summary of investment principles explained over the years by the Oracle of Omaha
Warren Buffet biography - A brief summary of his life to date.
Warren Buffett's Annual Letter to Shareholders, 2003   - new - Our analysis and summary
Charlie Munger biography - A look at the life and investment philosophy of the man considered by Warren Buffett a friend and investment genius
Five things we like about Warren Buffett - new - A few things that we think contribute to his success, reputation, and character.
Warren Buffett and brand names -  - the importance of a company having a good brand name.
Warren Buffett on debt - Why successful investors like buying into companies with financial strength and little debt.
Understanding a company - Buying shares in a company is just buying a part of a business. You need to understand the business before you invest
Dealing with Inflation - The ability of a company to raise prices to maintain profitability is what distinguishes a non-commodity company from a commodity one.
Letting the shareholders nominate the charity - new  - The approach that Warren Buffett's Berkshire Hathaway takes to corporate donations is highly innovative
Sticking to what you know - Company managers should focus on a company’s core activities and not wander off onto strange paths
Share buy backs - A company can add value to its shares by buying some of them back, but only for the right reasons
Return on equity - The ability of a company to earn and increase high returns on its capital is considered by Warren Buffett essential to a share investment in that company.
Owner earnings - Warren Buffett looks beyond the balance sheet and concentrates on genuine owner earnings.
Price/earnings ratio - Determining the right ratio of price to earnings of a company can influence the decision to invest or not.
Retained earnings - If a company cannot earn more for shareholders on retained earnings than owners can, it should distribute the profits instead.
Book value - Different intelligent investors have different opinions about the importance of book value to an investment decision.
Company growth - It is not so much the growth in earnings of a company that is important, it is how they grow, and in what areas.
Sound management - Successful investors invest in companies whose management is sound and honest.
The compounding factor
The right price to pay - Determining the correct price at which to buy.
Bringing it all together - A quick question and answer session, before you invest

see also

Reviews of Buffett books
Benjamin Graham articles

Other resources

Berkshire Hathaway company website
Berkshire Hathaway letters to shareholders
Yahoo's Warren Buffett directory