Warren Buffett's Way

老板推薦我讀這本書, 據說是有史以來，分析Warren Buffett最好的書. Buffett那樣的大牛也算是天才，若幹年出一個，看他何用？而且Fisher在序言裏麵說了，Buffett 那一套是他獨有的，別人的模仿或許根本無用。

Anyway,我就把它當作催眠曲來讀，不想，居然讀出了興趣來。
雖然此牛人堪稱天才，他也不是橫空出世，落地就投資不敗的。先來看看how did buffett come to his investment philosophy---the four people who influenced buffetts' investment approach. and they also have much to offer modren-day investors as well.

Benjamin Graham
Grahamn is considered the dean of financial analysis, before him there was no financial analysis profession and after him they began to call it that. at 1919, when he was 25, his annual salary was $600,000.

the basic ideas of investing are to look at stocks as businesses, use market fluctuations to your advantage, and see a margin of safety. that is what Ben Graham taught me, a hundread years from now they will still be the cornerstones of investing---Warren Bufett 1994.

The critial defination that Graham made--- a true sound investment must have two qualities--some degree of safety of principle and a satisfactory rate of return. later, he  reduced the concept of sound investing to a motto he called the " margin of safety".

in essence, a margin of safety exists when stocks are selling at less than its real value. for this strategy to work systematically, investors need a way to identify undervalued stocks. Graham defines the real value as the value determined by facts. facts included a company's assets, earnings and future prospects.

there are two rules of investing, said Graham. the first rule is donot lose. the second rule is donont forget the rule number one. the" donot lose" philosophy steered Graham toward two approaches for selecting stocks that adhered to the margin of safety.
the first way was buying a company for less than 2/3 of its net asset value and the second was focusing on stocks with low P/E ratios.

Graham's conviction rested on certain assumptions. first, he believes that the market frequently mispriced stocks, usually because of the human emothions of fear and greed.  the second assumption was based on the statistical phenomenon known as " reversion to the mean". it believes that an investor could profit from the corrective forces of an inefficient market.

to be continued.