Today, I would like to add a review on a fantastic value investing guide “The Buffettolgy Workbook”. Written by Mary Buffett and David Clark, The Buffettology Workbook being a must have to any investors library due to the excellant guidance providing to the investor to be a successful value investor. It is of course, designed to walk you step by step through how to identify a Buffett type investment.
‘The Buffettology Workbook’ has been released by the writers once after the success of the guide “The New Buffettology”. The later is certainly different from any similar books available in the market with its simple and solid explantion along with ample real world examples to understand each section, described in the guide.
As a person read all the books about Warren Buffett, this book attracted me a lot because if its style of writing. I am sure, it’s authors put enough effort to simplify each section in this book by using most relevant examples and better, simple explanations.
Broken into 23 chapters, The Buffettology Workbook virtually divided and considered as two parts. Qualitative and Quantitative. In the first part, focus given more to the qualitative aspects of a company to select and invest. This part totally focused to Buffett’s investment philosophies and value investing. In this area, you will find the most required qualities to be a value investor and the required approach to select a stock and deal with market. You can see the ability of writers to explain the qualities of a real business and the ways to identify such qualities prior to make any investment decisions. It include identifying a real monopolistic company to invest and identifying a sick commodity business to stay away.
Following the above, writers explaining the factors an investor should take care of to buy the company in a right price. It explains various possible factors that can drag the price of any company down.Following section, the quantitative part, describing the most required financial formulas to identify the real returns and value of the stock. It explaining the ways to examine financial status of a company to identify the buying suitability of a business or stock. Excellent explanations to calculate the initial rate of return from the buying price, compounding annual growth rates of a company, identifying the return on share holders equity, relative returns comparing with bonds and many other using good examples are totally new and incomparable with any similar books available in the market.
To have better understanding, each chapter in this book ends with a few rather simplistic questions, review of the ‘key points’ in each chapter. ‘The Buffettology Workbook” ends with three excellant case studies on the points Warren considered while select in invest on three companies. This is a good area to focus while reading, to get good information on Warren’s real world considerations.
Overall, I rate the book to be worthy of reading and get real value to your money spent here. This is a great book if you are really into Warren Buffett. It is designed to walk you step by step through how to identify a Buffett type investment. It presents very simple and straightforward investment guidance, which does not require any advanced degree of knowledge to implement. If you focus exclusively on Part One of this book and Chapter 22, then you will see dramatic improvements in your investment results going forward.