New book, Beyond Value by Prem C Jain, explains Warren Buffett approach to investing By Sanjay Kumar Singh, The Economic Times
Many books have analysed Warren Buffett’s investment approach that has led to the maestro amassing a fortune of more than $60 billion over a career spanning more than half a century. Prem C Jain’s book adds to that rich corpus. Contrary to popular perception, says Jain, Buffett is not a pure value investor. He was indeed Benjamin Graham’s favourite pupil and in his early years he did bet on low-priced stocks. Since the results he got were not to his satisfaction, he scouted around for other approaches. His quest led him to Philip Fisher’s approach. What Graham is to value investing, Fisher is to growth investing. The essence of this approach is that you identify a stock that has the potential to increase its earnings for years to come, and hold it for long. Buffett’s investment approach today is a synthesis of value and growth investing. As Jain’s analysis of many of Buffett’s stock purchases reveals, he is willing to pay a valuation that is reasonable, but not high, for stocks with strong growth prospects. He then holds on to them for years, often decades.
The author has explained both value and growth investing in a lucid manner. He urges readers not to limit themselves to either style but to use both. By not buying overvalued stocks, investors will curtail their downside risk. And if the stock is of a high quality, the investor need not necessarily sell it once its price approaches its intrinsic value, as a value investor would. Instead, he can hold it for years and partake of its growth.
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Buffett Beyond Value – Description
A detailed look at how Warren Buffett really invests
In this engaging new book, author Prem Jain extracts Warren Buffett’s wisdom from his writings, Berkshire Hathaway financial statements, and his letters to shareholders and partners in his partnership firms-thousands of pages written over the last fifty years. Jain uncovers the key elements of Buffett’s approach that every investor should be aware of.
With Buffett Beyond Value, you’ll learn that, contrary to popular belief, Warren Buffett is not a pure value investor, but a unique thinker who combines the principles of both value and growth investing strategies. You’ll also discover why understanding CEOs is more important than studying financial metrics; and why you need an appropriate psychological temperament to be a successful investor.
- Reveals Buffett’s multifaceted investment principles
- Discusses how Buffett thinks differently from others about portfolio diversification, market efficiency, and corporate governance
- Highlights how you can build a diverse and profitable investment portfolio
With Buffett Beyond Value as your guide, you’ll learn how to successfully invest like Warren Buffett.
Buffett Beyond Value -Book Review
From the Inside Flap
While Warren Buffett’s investment ideas are simple to understand, his success can be difficult to duplicate—unless you become familiar with how he really goes about the process of investing.
In this engaging new book, “Buffett Beyond Value: Why Warren Buffett Looks to Growth and Management When Investing“, author Prem C. Jain extracts Warren Buffett’s investment wisdom from Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) annual reports, Buffett’s letters to shareholders and partners in his partnership firms, and as many of Buffett’s other writings as he could find—thousands of pages written over the past fifty years. Through this effort, Jain uncovers the key elements of Buffett’s approach and offers an accessible way to apply it to your own investment endeavors.
With Buffett Beyond Value, you’ll quickly learn that, contrary to popular belief, Warren Buffett is not a pure value investor, but a unique thinker who combines the principles of both value and growth investing strategies. You’ll also discover why Buffett emphasizes the importance of high-quality management above many other metrics when evaluating a company he’s interested in.
Written for anyone serious about stock market investing, this unique guide skillfully outlines the proven principles Buffett has followed over the course of his long and successful career and shows you what it takes to make them work for you. Topics include:
- How to build a diverse and profitable portfolio the Warren Buffett way
- Why you need an appropriate psychological temperament to be a successful investor
- Buffett’s thoughts on market efficiency and the ways in which you can incorporate them into your investment decision making
- How issues related to profitability and accounting can provide you with a perspective that is uncommon in investing circles
- Why Buffett thinks differently from others about portfolio diversification, corporate governance, and much more
If there’s one person worth listening to when it comes to investing—whether you’re an individual investor, a student, an academic, or a professional portfolio manager—it’s Warren Buffett. And with Buffett Beyond Value as your guide, you’ll gain valuable insights that could enhance your understanding of investing and improve your ability to make more profitable decisions in today’s markets.
From the Back Cover
“Many books about Warren Buffett describe him as simply a ‘value’ investor. Jain gives us a clearer understanding of the techniques of the man known as ‘the world’s greatest investor’ and shows that his investment principles are consistent with many of the precepts of modern financial theory.” —BURTON MALKIEL, Professor, Economics Department, Princeton University; author of A Random Walk Down Wall Street and The Elements of Investing
“This is required reading for all Buffettologists looking for more than just sound bites and folk wisdom in their quest to peer into the mind of one of the greatest investors of all time. Read Buffett Beyond Value slowly and savor every page while sipping a Cherry Coke!” —ANDREW W. LO, Harris & Harris Group Professor, MIT Sloan School of Management
“What better way to become a successful investor than to study the teachings of Warren Buffett? And, what better way to study those teachings than to read Buffett’s forty-year writings contained in his annual reports? Prem C. Jain jump-starts those lessons by culling Buffett’s most salient investment secrets and summarizes them in a wonderful and easy-to-read book.” —HOWARD M. SCHILIT, author of Financial Shenanigans; founder, Financial Shenanigans Detection Group
“Post the 2008-2009 financial crisis, everyone from New York to New Delhi is looking for investment advice. The advice has just arrived! Prem C. Jain’s lucid, accessible encapsulation of Buffett’s investment wisdom is a page-turner—it’s full of investment nuggets and entertaining anecdotes, and yet the write-up is faithful to economic theory. Buffett’s investment thesis is now out in the open, and therefore may a thousand Buffetts bloom!” —S.P. KOTHARI, Managing Director, Blackrock; Gordon Y Billard Professor of Management, Sloan School of Management, Massachusetts Institute of Technology