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Book: The New Buffettology: The Proven Techniques for Investing Successfully in Changing Markets That Have Made Warren Buffett the World's Most Famous Investor :: Robert Kiyosaki|Books :: Book
Date: Thursday, 08 January, 2009 :: 04:10
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The New Buffettology: The Proven Techniques for Investing Successfully in Changing Markets That Have Made Warren Buffett the World's Most Famous Investor
List Price: USD $30.00
from USD $15.99
Product Group: book
Manufacturer: Scribner
Studio: Scribner
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Editorial Review: Product Description
If you read the original Buffettology, you know exactly half of what you need to know to effectively apply Warren Buffett's investment strategies. Published in 1997, the bestselling Buffettology was written specifically for investors in the midst of a long bull market. Since then we've seen the internet bubble burst, the collapse of Enron, and investors scrambling to move their assets -- what remains of them -- back to the safety of traditional blue chip companies. As price peaks turned into troughs, worried investors wondered if there was any constant in today's volatile market. The answer is yes: Warren Buffett's value investing strategies make money. The New Buffettology is the first guide to Warren Buffett's selective contrarian investment strategy for exploiting down stocks -- a strategy that has made him the nation's second-richest person. Designed to teach investors how to decipher and use financial information the way Buffett himself does, this book guides investors through opportunity-rich bear markets, walking them step-by-step through the equations and formulas Buffett uses to determine what to buy, what to sell -- and when. Authors Mary Buffett and David Clark explore Buffett's recent investments in detail, proving time and again that his strategy has earned enormous profits at a time no one expects them to -- and with almost zero risk to his capital. In short, The New Buffettology is an essential companion to the original Buffettology, a road map to investment success in the worst of times.
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Reviews:
Average Customer Review: 
1 of 1 people found the following review helpful:
Summary: A Total Frustration!!
Date: 2008-12-10 - 
Comment: Don't be deceived by the high ratings on Amazon.
This book might be the worst book I have read on investments. I like Warren and I thought this book would give some insight into how he made certain investment decisions and the process thru which he went. However, the authors simply speculate on what Buffet might have thought making the investments. The fact of the matter is Buffet didn't even participate in the writing of the book.
The context is extremely simple and repetitive. Authors explain what shareholders equity is twice in the book with using the same home ownership example.
When I first got the book, I was excited and started reading. 10 pages, 20 pages, 50 pages.. I did not find anything interesting or new. Oh, except the "durable competitive advantage" which was explained throughout the book about 112 times. Anyway, I thought more will come and kept reading, page 130 still nothing. On top of the very shallow context the real frustrating part was the language of the authors. It was almost like the book was written for kids (or retards).
Not over yet!!! The quantitative part at the end of the book has many flaws. The authors seem to confuse shareholders equity and market value from time to time. And comparing equity to bonds all the time? Using interest rates to discount earnings? In Essays of Warren Buffet, he mentiones that he utilizes free cash flow for valuation. Predicting the future growth rate from the compounded historical growth as if is a very precise method? So many mistakes, I am sure the authors know little to nothing about equity valuation. THIS BOOK IS A WASTE OF MONEY AND TIME. If you want to read Buffet, buy Essays of Warren Buffet, its a very good book (and the essays are written by Warren Buffet himself), and also I believe the authors wrote this book from what they tried to learn from Buffet's Essays.
Summary: Nothing really new here
Date: 2008-11-19 - 
Comment: The title of this book is a misnomer because the content is really not particularly new or fresh. Readers might buy this, or the previous Buffettology book by the authors, but one's investment knowledge base is not significantly enhanced by the two books in tandem.
Summary: Best Buffett Book!
Date: 2008-10-24 - 
Comment: "The New Buffettology" not only summarizes Buffett's approach to investing, it also provides a large number of illustrative examples. Examples of both follow.
"Transforming" industries (eg. radio, autos, airlines, Internet, biotech) create visions of wealth in investors' minds. Buffett, however, sees them as seldom, if ever, establishing a sustainable competitive advantage due to the intense competition in the infancy of any industry. Further, they lack of track record of profits in their early years.
The best buying opportunities occur in a bear market with firms that just encountered bad news specific to them. Examples: American Express in the mid-1960s after it lost $60 million in a salad oil swindle, but still had a strong credit card and traveler's check business. Bought into Mattel after its 1999 Learning Co. acquisition bled cash and lowered Mattel's stock from $46 in 1998 to $9 in 2000; Mattel still had Barbie, sold off Learning Co., and the stock rebounded. Bought Wells Fargo @ $58 in 1991 after it fell in a down real-estate market - saw it as a low-cost producer. Early 1980s invested in Philip Morris and R.J. Reynolds after tobacco-related lawsuits hammered their stock prices. GEICO in 1975 was on the edge of insolvency for insuring all driver (not just safe) - went back to its roots.
Conversely, when analysts and media pundits proclaim earnings are no longer important in valuation (eg. look at total sales, instead), a bubble is in progress.
Buffett likes businesses that fulfill a repetitive consumer need (food, fast food), or repetitive consumer services (tax preparation, security services, pest control), low-cost producers or vendors of common products (eg. furniture, jewelry, insurance).
Companies with some kind of desirable competitive advantage typically have high consistent returns on stockholders' equity (eg. 12+%), such as H&R Block (25%), coca-Cola - 33%, Philip Morris - 20%. Also looks for rising EPS, and debt less than 5X current net earnings (except banks - leveraged much higher).
Privately owned companies often can be bought at 4-6X earnings because of their inability to expand. Bought Nebraska Furniture Mart at a 24% return price.
Arbitrage is a favorite Buffett source of income - looks for CASH acquisitions AFTER they've been announced.
1 of 1 people found the following review helpful:
Summary: One of the best Buffett books
Date: 2008-09-05 -
Comment: This is probably the best Buffett book that I have read. Most of the books about Buffett talk about his life history and how he bought shares of Company X twenty years ago for $10 and it's now worth $200, but they don't give you specifics of how he evaluates companies that he purchases. This book gives you the specific and quantifiable criteria that he uses to evaluate a stock for purchase. For example, a company must have a ten year record of return on capital above 15%, a debt to equity ratio below 1.5, etc.
There has been some debate about the credibility of this book in regards to how much Mary Buffett actually knew about her former father-in-law's business. I can say that the principles outlined in this book are consistent with many other texts that I have studied on value investing, and I have used the same criteria when evaluating stocks for my own portfolio.
1 of 1 people found the following review helpful:
Summary: Get the Audio Instead
Date: 2008-03-15 -
Comment: Many books have been written about Warren Buffet's way of picking the right stocks at the right time, but this one is the most sound, concise and actionable. There is another book similar to this one: "The Warren Buffet Way" by Robert G. Hagstrom, but it misses the important topics laid out in the "Buffettology". These major topics are: what are the differences between a "consumer monopoly" and a "commodity"; how to calculate the rate of return over a long period of time before choosing the investment; and so on. There is another great book about Warren Buffet and his investment strategy - "Buffet: The Making of an American Capitalist" by Roger Lowenstein, but it better describes Mr. Buffet's biography and his relations with family, friends and the society, rather than how did he evaluate the companies. But please note that "Buffettology" is not a replacement of the book by Roger Lowenstein, I highly recommend reading both of them. What is you can omit is the book by Robert G. Hagstrom, above mentioned.
I would recommend an abridged audio version of the "Buffettology" instead of the printed hardcover. The audio version discloses the most important factors of Mr. Buffet's investment principles pretty well. Some of the background information is available on free letters to shareholders and Mr. Buffet's lectures, but you might not want to crawl thought all these; you might want to save time and just listen the "Buffettology" audio or read the "Buffettology" book, where all this information is perfectly summarized and laid out in a consistent way.
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