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The Warren Buffett way!

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I have been an ardent follower of Warren Buffett and his investment practices since a long time. I bought my copy of the book “Buffettology” by Mary Buffett in 2003 when I first heard of Warren Buffett. Ever since, I was itching to know more about this man who can make compound interest work wonders for the world of investing! For the uninitiated, he is the only billionnaire who has made all his money just from the stock market and later on, by buying businesses! He also posts something like a CAGR in his holdings of over 21.5% (wow!) against the S&P’s index of roughly half of that (10%) from 1965 till 2005!

Needless to say, when I read a book called “The Warren Buffett way” by Robert G Hagstrom, I was not dissapointed.

It told me a lot about Berkshire Hathaway and Warren Buffett that I did not know. It taught me his investment practices and gave me a firm foundation about reading up and assimilating the multitude of facts presented on the Berkshire annual reports and his annual letters to his shareholders.

It also told me that I have the qualities of being rational, level headed, going against the crowd – all prerequisites to jump into the world of investing.

I have deliberately stayed away from the stock market for the large part of the last 3 years. I did create online trading accounts at and ICICIDirect way back in Spring 2004 but as usual it was driven by pure speculation.

I bought a couple of navratna stocks of ONGC and GAIL to test the waters then and made profit on GAIL (reasonable sum) while I lost money on ONGC.

I realized that is not investing – its trading and therein lies the difference!

Of course, one has to be extremely smart to be Warren Buffett and I would do wonders to even do 1/1000th as well as Warren Buffett did but I have made up my mind to move towards investing and not gambling/speculating. That mindset in itself speaks volumes for the influence the book (and Warren Buffett) has had on me.

I also did not go for some senseless real estate investments after reading this book. Thanks for that – a stitch in time saves nine.

If I invest Rs. 1 of my money anywhere, I want to make sure I do it sensibly knowing fully well about where I am putting my money. Lets see how things go!

Successful investing!

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Written by Naveen Athresh

January 17, 2007 at 3:00 pm

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