The Warren Buffett Way

Foreword: The Exception vii
Howard Marks
Foreword to the Second Edition xvii
Bill Miller
Foreword to the First Edition xix
Peter S. Lynch
Introduction xxv
Kenneth L. Fisher
Preface xxxi
Chapter One A Five-Sigma Event: The World's GreatestInvestor 1
Personal History and Investment Beginnings 3
The Buffett Partnership Ltd. 10
Berkshire Hathaway 13
Insurance Operations 15
The Man and His Company 17
Five-Sigma Event 18
Chapter Two The Education of Warren Buffett 21
Benjamin Graham 21
Philip Fisher 30
Charlie Munger 35
A Blending of Intellectual Influences 38
Chapter Three Buying a Business: The Twelve Immutable Tenets45
Business Tenets 46
Management Tenets 50
Financial Tenets 59
Market Tenets 64
Anatomy of a Long-Term Stock Price 69
Chapter Four Common Stock Purchases: Nine Case Studies71
The Washington Post Company 72
GEICO Corporation 81
Capital Cities/ABC 91
The Coca-Cola Company 100
General Dynamics 110
Wells Fargo & Company 114
American Express Company 120
International Business Machines 123
H.J. Heinz Company 130
A Common Theme 135
Chapter Five Portfolio Management: The Mathematics ofInvesting 137
The Mathematics of Focus Investing 143
Focus Investors in Graham-and-Doddsville 155
Chapter Six The Psychology of Investing 179
The Intersection of Psychology and Economics 180
Behavioral Finance 182
And on the Other Side, Warren Buffett 194
Why Psychology Matters 199
Chapter Seven The Value of Patience 201
For the Long Term 202
Rationality: The Critical Difference 205
Slow-Moving Ideas 206
System 1 and System 2 207
The Mindware Gap 210
Time and Patience 211
Chapter Eight The World's Greatest Investor 213
The Private Buffett 216
The Buffett Advantage 218
Learning to Think Like Buffett 224
Finding Your Own Way 232
Appendix 235
Notes 253
Acknowledgments 263
About the Website 267
About the Author 269
Index 271