More Praise for The Warren Buffett Way, First Edition

The War ren Buf fett Way,
in which Robert Hagstrom outlines Buf-
fett’s career and presents examples of how his investment technique and
methods evolved as well as the important individuals in that process.
The book also details the key investment decisions that produced Buf-
fett’s unmatched record of performance. Finally, it contains the think-
ing and the philosophy of an investor that consistently made money
using the tools available to every citizen no matter their level of wealth.
P
ETER
S. L
YNCH

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Preface
A
lmost exactly twenty years ago, while training to become an in-
vestment broker with Legg Mason, I received a Berkshire Hath-
away annual report as part of the training materials. It was my
very f irst exposure to Warren Buffett.
Like most people who read Berkshire’s annual reports, I was in-
stantly impressed with the clarity of Buffett’s writing. As a young pro-
fessional during the 1980s, I found that my head was perpetually
spinning as I tried to keep up with the stock market, the economy, and
the constant buying and selling of securities. Yet, each time I read a
story about Warren Buffett or an article written by him, his rational
voice seemed to rise above the market’s chaos. It was his calming inf lu-
ence that inspired me to write this book.
The principal challenge I faced writing 
The War ren Buf fett Way
was to prove or disprove Buffett’s claim that “what [I] do is not beyond
anybody else’s competence.” Some critics argue that, despite his success,
Warren Buffett’s idiosyncrasies mean his investment approach cannot be
widely adopted. I disagree. Warren Buffett is idiosyncratic—it is a source
of his success—but his methodology, once understood, is applicable to
individuals and institutions alike. My goal in this book is to help in-
vestors employ the strategies that make Warren Buffett successful.
The War ren Buf fett Way
describes what is, at its core, a simple ap-
proach. There are no computer programs to learn, no two-inch-thick
investment manuals to decipher. Whether you are f inancially able to

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P R E F A C E
purchase 10 percent of a company or merely a hundred shares, this book
can help you achieve prof itable investment returns.
But do not judge yourself against Warren Buffett. His f ive decades
of simultaneously owning and investing in businesses make it improba-
ble that you can imitate his historical investment returns. Instead, com-
pare your ongoing results against your peer group, whether that group
includes actively managed mutual funds, an index fund, or the broader
market in general.
The original edition of this book enjoyed remarkable success, and I
am deeply gratif ied that so many people found it useful. The success of
The War ren Buf fett Way,
however, is f irst and foremost a testament to
Warren Buffett. His wit and integrity have charmed millions of people
worldwide; and his intellect and investment record have, for years, mes-
merized the professional investment community, me included. This un-
paralleled combination makes Warren Buffett the single most popular
role model in investing today.
I had never met Warren Buffett before writing this book, and I did
not consult with him while developing it. Although consultation
surely would have been a bonus, I was fortunate to be able to draw
from his extensive writings on investing that date back more than four
decades. Throughout the book, I have employed extensive quotes from
Berkshire Hathaway’s annual reports, especially the famous Chair-
man’s Letters. Mr. Buffett granted permission to use this copyrighted
material, but only after he had reviewed the book. This permission in
no way implies that he cooperated on the book or that he made avail-
able to me secret documents or strategies that are not already available
from his public writings.
Almost everything Buffett does is public, but it is loosely noted.
What was needed, in my opinion, and what would be valuable to in-
vestors, was a thorough examination of his thoughts and strategies
aligned with the purchases that Berkshire made over the years, all com-
piled in one source. And that was the starting point for the original
edition of