Brady F. Anderson

The Warren Buffet Way

My Notes

Be willing to be inactive. Why rush to act on sub-par opportunities?

Bet big on your best ideas. You are more likely to get a few key decisions right rather than force yourself to make many correct choices. You will see better results and avoid more stupidity with this philosophy.

Investment mistakes:

  1. The price you paid
  2. The management you joined
  3. The future economics of the business.

Hagstrom’s Tenets of the Warren Buffet Way

Business tenets

Is the business simple and understandable?

Does the business have a consistent operating history?

Does the business have favorable long-term prospects?

Management tenets

Is the management rational?

Is the management candid with its shareholders?

Does management resist the institutional imperative?

Financial Tenets

Calculate “owner earnings”

Look for companies with high profit margins

Market Tenets

What is the value of the business?

Can the business be purchased at a significant discount to its value?