Value investment Books (22) - Tao of Warren Buffett

The Tao of Warren Buffett: Warren Buffett's Words of Wisdom: Quotations and Interpretations to Help Guide You to Billionaire Wealth and Enlightened Business Management
By Mary Buffett, David Clark

A collection of pithy and inspiring sayings from America's favorite businessman that reveal his secrets of success


Like the sayings of the ancient Chinese philospher Lao-tzu, Warren Buffett's worldly wisdom is deceptively simple and enormously powerful in application. In The Tao of Warren Buffett, Mary Buffett -- author of three books on Warren Buffett's investment methods -- joins noted Buffettologist and international lecturer David Clark to bring you Warren Buffett's smartest, funniest, and most memorable sayings with an eye toward revealing the life philosophy and the investment strategies that have made Warren Buffett, and the shareholders of Berkshire Hathaway, so enormously wealthy.

Warren Buffett's investment achievements are unparalleled. He owes his success to hard work, integrity, and that most elusive commodity of all, common sense. The quotations in this book exemplify Warren's practical strategies and provide useful illustrations for every investor -- large or small -- and models everyone can follow. The quotes are culled from a variety of sources, including personal conversations, corporate reports, profiles, and interviews. The authors provide short explanations for each quote and use examples from Buffett's own business transactions whenever possible to illustrate his words at work.


As Warren says:


"You should invest in a business that even a fool can run, because someday a fool will."

"With enough inside information and a million dollars, you can go broke in a year."


"No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant."


"Our method is very simple. We just try to buy businesses with good-to-superb underlying economics run by honest and able people and buy them at sensible prices. That's all I'm trying to do."


The Tao of Warren Buffett inspires, amuses, sharpens the mind, and offers priceless investment savvy that anyone can take to the bank. This irresistibly browsable and entertaining book is destined to become a classic.

Value investment books

Value Investment Books (21)- Active Value Investing

Active Value Investing: Making Money in Range-Bound Markets (Wiley Finance)
By Vitaliy N. Katsenelson

A strategy to profit when markets are range bound–which is half of the time

One of the most significant challenges facing today’s active investor is how to make money during the times when markets are going nowhere. Bookshelves are groaning under the weight of titles written on investment strategy in bull markets, but there is little guidance on how to invest in range bound markets. In this book, author and respected investment portfolio manager Vitaliy Katsenelson makes a convincing case for range-bound market conditions and offers readers a practical strategy for proactive investing that improves profits. This guide provides investors with the know-how to modify the traditional, fundamentally driven strategies that they have become so accustomed to using in bull markets, so that they can work in range bound markets. It offers new approaches to margin of safety and presents terrific insights into buy and sell disciplines, international investing, "Quality, Valuation, and Growth" framework, and much more.

Vitaliy Katsenelson, CFA (Denver, CO) has been involved with the investment industry since 1994. He is a portfolio manager with Investment Management Associates where he co-manages institutional and personal assets utilizing fundamental analysis. Katsenelson is a member of the CFA Institute, has served on the board of CFA Society of Colorado, and is also on the board of Retirement Investment Institute. Vitaliy is an adjunct faculty member at the University of Colorado at Denver - Graduate School of Business. He is also a regular contributor to the Financial Times, The Motley Fool, and Minyanville.com.

Recommended Value investment book

Value investment books (20) - Even Buffett Isn't Perfect

Value investing books collection:
What You Can--and Can't--Learn from the World's Greatest Investor
By Vahan Janjigian

A contrarian look at how Warren Buffett thinks about investing and related issues

Warren Buffett is the most successful and revered investor of all time. His ability to consistently find undervalued companies has made him one of the world’s richest men.

Despite many previous books about him, it’s rare to find an objective assessment—one that praises him when appropriate, but also recognizes that even Buffett makes mistakes. For instance, is he right to call for higher taxes and an end to earnings guidance? Should Buffett fans copy his avoidance of technology stocks?

In this penetrating look at how Buffett thinks, Vahan Janjigian shows readers how to learn from the master’s best moves while avoiding strategies that don’t apply to small investors. And he explains Buffett’s favorite valuation methodology, the discounted cash flow model, and how it can significantly reduce the odds of overpaying for a stock

Value investment textbooks
Value investing books

Value investment books (19)- Warren Buffett and the Interpretation of Financial Statements

Warren Buffett and the Interpretation of Financial Statements
The Search for the Company with a Durable Competitive Advantage
By Mary Buffett, David Clark


With an insider's view of the mind of the master, Mary Buffett and David Clark have written a simple guide for reading financial statements from Warren Buffett's succccessful perspective.

Buffett and Clark clearly outline Warren Buffett's strategies in a way that will appeal to newcomers and seasoned Buffettologists alike. Inspired by the seminal work of Buffett's mentor, Benjamin Graham (The Interpretation of Financial Statements, 1937), this book presents Buffett's interpretation of financial statements with anecdotes and quotes from the master investor himself.

Potential investors will discover:

• Buffett's time-tested dos and don'ts for interpreting an income statement and balance sheet
• Why high research and development costs can kill a great business
• How much debt Buffett thinks a company can carry before it becomes too dangerous to touch
• The financial ratios and calculations that Buffett uses to identify the company with a durable competitive advantage -- which he believes makes for the winning long-term investment
• How Buffett uses financial statements to value a company
• What kinds of companies Warren stays away from no matter how cheap their selling price

Once readers complete and master Buffett's simple financial calculations and methods for interpreting a company's financial statement, they'll be well on their way to identifying which companies are going to be tomorrow's winners -- and which will be the losers they should avoid at all costs.

Destined to become a classic in the world of investment books, Warren Buffett and the Interpretation of Financial Statements is the perfect companion volume to The New Buffettology and The Tao of Warren Buffett.


Value investment textbooks

Value Investment Books (18)- Buffett: The Making of an American Capitalist

Since its hardcover publication in August of 1995, Buffett has appeared on the Wall Street Journal, New York Times, San Francisco Chronicle, Los Angeles Times, Seattle Times, Newsday and Business Week bestseller lists. The incredible landmark portrait of Warren Buffett's uniquely American life is now available in paperback, revised and updated by the author.

Starting from scratch, simply by picking stocks and companies for investment, Warren Buffett amassed one of the epochal fortunes of the twentieth century--an astounding net worth of $10 billion, and counting. His awesome investment record has made him a cult figure popularly known for his seeming contradictions: a billionaire who has a modest lifestyle, a phenomenally successful investor who eschews the revolving-door trading of modern Wall Street, a brilliant dealmaker who cultivates a homespun aura.

Journalist Roger Lowenstein draws on three years of unprecedented access to Buffett's family, friends, and colleagues to provide the first definitive, inside account of the life and career of this American original. Buffett explains Buffett's' investment strategy--a long-term philosophy grounded in buying stock in companies that are undervalued on the market and hanging on until their worth invariably surfaces--and shows how it is a reflection of his inner self.

Value investment textbooks
By Roger Lowenstein

Time value of money

Time value of money is the concept of measuring the value of money over time. The concept derived from the fact that money does not remain static and over time does change value.

The money in your wallet, for example, is more likely to buy you more gasoline today than it will next year (perhaps even more than it will tomorrow based on surging oil and gas prices). In other words, due to inflation alone, chances are that you will not enjoy the same purchasing power next year as you would today because over time the value of your money will likely decrease.

Conversely, let's say you purchase a rental property today for $300,000 that's worth $350,000 next year. In this case, the effect of time value of money has upon your investment is a good thing because it grew your investment.

Understanding time value of money, therefore, is crucial to real estate investing, and explains why we try so desperately to measure and solve for those changes with such elements as internal rate of return (IRR) and net present value (NPV). We need to measure an investor's rate of return with consideration for time value money.

Two components are intrinsic to time value: present value and future value.

Present value defines what a dollar is worth today and future value defines the worth of a dollar at some future time. It's straightforward, simply think about it in terms of purchasing power. In our rental property example, for instance, the present value of our $300,000 could purchase that rental property today but not next year. Why, because next year, based on a future value of $350,000, our purchasing power has diminished.

This relationship between present and future value is why some very bright people concluded that real estate investors must consider the timing of receipts from their real estate investments as important (if not more important) than the amount received. That is, due to time value of money, given the opportunity to collect some money within a shorter time could be wiser than collecting a larger sum of money in the distant future.

Let's look at a scenario. Suppose we're given the choice to invest $300,000 in one of two investment opportunities knowing we can collect either (1) $350,000 in one year, or (2) $400,000 in two years. Which yields us the better return on our investment? The answer may surprise you.


$350,000 in one year yields us 16.7%
$400,000 in two years yields us 15.5%

Without consideration for time value of money, a real estate investor might have opted for the larger sum and lost money. This is why the analysis of a real estate investment requires an understanding of the time value of money. Remember the concept. Inflation erodes purchasing power over time and therefore makes having $10 today preferable to having that same amount one year or five years from now. With time value of money computations, you can measure the present value of each and make wiser real estate investment choices.

by James R Kobzeff ,the developer of ProAPOD Real Estate Investment Software

How Does The Stock Market Work?

Many people who are beginning to invest or even thinking of investing are wondering how the stock market works. There is a large learning curve when it comes to learning how the stock market works especially when you take into account things like the Dow Jones Industrial Averages and the like. The stock market itself plays a largely important role in the overall economy in our country and while it may not personally affect you in a visible sense, it does affect the economy around you.
Let's pretend for a moment that you wanted to start your own business. You of course will need a bit of capital in order to do this and in an attempt to do this you have a number of options to choose from. You can opt to go to the bank for a loan, but chances are, that unless you have perfect credit this is not a viable option. You can also attempt to attract venture capitalists, but this is an extremely difficult task for almost anyone. As a result, the most viable option to start your business is by selling portions of ownership in the business. So you take your business, figure out the value of the business and then split it up into "shares" of the business. You as the main owner still get to run the business and get paid for it, the other owners that now own shares in the business also want to get paid. They are paid for their business in dividends.

This allows in investor in exchange for dividends to become a partial owner in the business without all the hassles with running it. This is what a share of stock is; it is a partial ownership in a company in which you do not have to do anything for it on a day today basis.

While you can sell these stocks to your friends, selling them to strangers is a difficult task. Well, not actually a difficult task, because that what a stock exchange is; a stock exchanges is a place for different investors to get together in order to buy and sell shares of someone else's company.

The biggest factor which affects a stock's value is its demand. If a stock is popular because a company regularly pays out dividends or even if they are going to be bought out, then the demand for the stocks increase and with that demand so does the stock's value. Furthermore, the lower amount of stock available in a particular company, the more that demand will affect its value.

Likewise, when people are trying to unload or sell their stocks in a particular company, the price goes down. The goal of any true investor is knowing when to purchase a certain company's stocks and knowing when to sell them before the price goes back down. As time goes by, you will develop more experience in dealing with this and will also develop your own investment strategies to ensure you are making the most profit you can in a given period.

Investment article
by Ray Baker
The Author's website Stock Market Investing For Dummies features articles, tips and advice about investing in the stock market

Criteria investors should follow for better stock performance

Many a time stock market investors do not know what is the criterion behind choosing stocks of a particular company. Stock performance depends upon a number of factors. Following are a few points which should be kept in mind before deciding to buy stocks of any company.
Earnings-Earnings reflect a company's profit. It is advisable to select companies which have substantial earnings that too not only at present but had been consistently earning for a long period of time. Also, source of company's earning is important. Companies receiving their earning from regular operations are better than companies displaying earnings from one-time occurrence. Firms having low dividend payout ratio indicates that it is re-investing a major part of its earning, thus investors should give more weightage to such organisations, while selecting stocks.

Price-earnings (P/E) ratio- It is advisable to identify those companies which have a lower P/E ratio than other companies in its industry. This is because such discounted stocks of companies are not generally affected by slowdown in the business cycles and pick up fast during favourable times.

Book value- It is advisable to select stocks trading at atmost 1.3 times book value. This is because the lower the stock price in comparison to the book value per share, the better would be the value.

Return on equity- Return on equity indicates the well-being of any company. It is advisable to choose companies which posses higher return on equity as compare to other companies in the industry. Generally, a value of 15 percent or higher is considered good.

Debt-equity ratio- While buying stocks of a particular company, it is advisable to choose companies which have low debt-equity ratios. Below 35 percent is believed to be fine.

Price volatility- It is advisable not to buy stocks which are volatile in nature. Volatility is often related to risk. It is better that stocks move in consistency to the overall sense.

Investment article
by Nisha Acharya

Calculating Your Net Worth

Have you ever heard of wealthy people being described as 'worth X (amount of dollars)'? Maybe, this celebrity is worth 5 million dollars, or that heir is worth 35 million dollars. This is called their net worth, and believe it or not, we all have one. Some people have a 0 net worth or a negative net worth, but it's still their net worth. Knowing your net worth may be useful from time to time when filling out some financial forms or when planning your finances.
Your net worth is equal to your total assets minus your total liabilities. To begin, add up all of your assets. You might be surprised at how many assets you have. The obvious are your house and investments including any retirement accounts such as a 401K or IRA, stocks, bonds, mutual funds, commodities, and real estate. Your vehicles are also assets, but make sure you only include their fair market value. In other words, if you were to sell them today, how much would you get? Some other assets include high valuables such as antiques, collectibles, and valuable art.

Next, you will need to calculate all your liabilities, or simple debt, money you owe. This includes the amount you owe on your mortgage and vehicles, whatever you owe on items you financed such as computers and other high price items, credit card debt, student loans, and absolutely any other debt you owe. A liability means you are held liable to whoever you borrowed the money from. This money is not yours which is why it's subtracted from your assets.

Finally, subtract. Assets minus liabilities equals equity. In other words, subtract what you owe from what you have and you get what your worth, your net worth. Figuring out your net worth is a good way to see where you are in your life financially so you can set goals and make a plan of action. If your net worth is a negative number, this means you are in bad debt. Even if you get a number close to zero, you are still nowhere near where you should be for retirement. You can't live off of social security alone unless you don't mind downgrading how you are living now considerably.

Take your net worth as a starting point. If you have a net worth of $100,000 or more and you are under 30, you have a good start. Keep saving and investing your money so that you are at least able to maintain your standard of living when you retire. If you have an equal net worth and you are much older, you may need to be a little more aggressive in your savings, but not so aggressive in your investments to avoid losing money. Let your net worth now be a starting point for the large nest egg in your future.

by David Tang

What is the winning stock portfolio for investors?

Yes, it is very crucial for stock market investors to know what the winning stock portfolio is. Generally there are two investments strategy followed by the stock market investors. One is growth and another is value investing.

Growth stocks are the stocks that usually have above-average prospects for long term growth based on measures like dividends, earnings and book value. Growth stocks are high priced but their prices appreciate in the future ensuring the investors that they get their reward. However, growth stocks yield lesser dividends.

On the other hand value stocks are low priced in relation to their earnings, dividends and book value, but they yield above-average dividend income.

Let us assume that Mr. X belongs to the group of growth investors who look for stocks that outperformed the growth rate of the overall market. Growth stocks are more volatile in nature and focus on capital appreciation. Stock market investors like Mr. X consider that a company's present earnings are not as important as the expected growth of those earnings.

Another group of investors like Mr. Y are value investors who seek to buy valuable assets at sale prices. Value stocks have the tendency to lag the overall stock market during market upswings and to outperform it during market declines. Value stocks are more stable in nature as they give more dividend income because many companies pay dividends even when stock prices are declining. Value investors like Mr. Y are concerned to identify stocks that are trading at lower prices than their actual prices and do not bother about the expected future growth of the company.

It is advisable to achieve the right mix of growth and value stocks either by combining growth and value oriented mutual funds or by identifying a fund that already includes the two types of investments. Growth stocks yield capital gains, which receive preferred tax treatment whereas value stocks give the investors more downside protection.

by Nisha Acharya ,a blogger who frequently writes on various topics.

Several Important, Common Stock Ratios for Stock Investing

There are several important, common ratios stock investors can use when evaluating stocks including small cap stocks, value stocks, penny stocks and growth stocks. Ratios are tools for investors based on a company's financial or other information. There is no one magic number, but as a whole ratios can be powerful when used in combination.

One of the most well known, if not the most well known stock ratio is the P/E ratio, known as just the PE ratio or Price to Earnings ratio or even known as the earnings multiple/ multipler. The P/E ratio of a stock is a measure of the price paid for a share relative to the annual income or profit earned by the firm per share. A higher P/E ratio means that investors are paying more for each unit of income. Quite simply, the P/E ratio is calculated by dividing the stock price of a share by the annual earnings per share. Annual earnings per share is known as EPS. Generally, stocks with higher earnings growth will have a higher P/E and those with lower earnings growth will have a lower P/E.

Another famous stock ratio is the Price / Sales ratio or the P/S ratio, or price-to-sales ratio. It is another valuation metric for stocks. It is calculated by dividing the company's market cap by the company's revenue in the most recent fiscal year, or the most recent four fiscal quarters. Another way to calculate the P/S of a stock would be to divide the per-share stock price by the per-share revenue. The P/S ratio can be used to determine the value of a stock relative to its past performance. It can also be used to determine the relative valuation of a sector or the market as a whole.

The price-to-book ratio, or P/B ratio, is another common ratio used when evaluating stocks. It is a financial ratio to compare a company's book value to its current market price. Book value describes the amount of the company held by the shareholders. To calculate the P/B ratio, stock market investors should divide the company's market capitalization (market cap) by the company's total book value from its balance sheet. This is another way to find the best stocks out of the large group of value stocks out there.

Another common stock investing ratio is the PEG ratio. The PEG ratio is also known as the Price/Earnings to Growth ratio. It is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company's expected growth.

In general, the P/E ratio is higher for a company with a higher growth rate. Thus using just the P/E ratio would make high-growth companies overvalued relative to others. It is assumed that by dividing the P/E ratio by the earnings growth rate, the resulting ratio is better for comparing companies with different growth rates.

by Gusher Stocks

Types of Stocks: Penny Stocks, Value Stocks, Growth Stocks, Technology Stocks, Small Cap Stocks

Types of Stocks: Penny Stocks, Value Stocks, Growth Stocks, Technology Stocks, Small Cap Stocks by Gusher Stocks

There are several types of stocks in the stock market. We can not address all of them in this article, but we will address a few including penny stocks, value stocks, growth stocks and technology stocks.

A penny stock is a common stock that trades for less than $5 a share and are traded over the counter (OTC) through quotation services such as the OTCBB or the Pink Sheets. There are several stocks that trade on the NASDAQ and AMEX that trade under the $5 level as well. Penny stocks generally have market caps under $500M, trade under $5.00 per share and are considered speculative, particularly those that trade on low volumes over the counter. Other terms used to describe a penny stock include microcap stocks, nano caps and small caps. Many consider penny stocks risky and speculative. Investors considering penny stocks have to evaluate their risk tolerance.

Value Stocks are those stocks that trade at a low price relative to its fundamentals and considered undervalued by a value investor. Fundamentals include dividends, earnings, revenue, balance sheet items and other. Some characteristics of a value stock include a high dividend yield, low price-to-book ratio and/or low price-to-earnings ratio. Value stocks are created out of a market inefficiency creating a company that is trading for less than they are worth and thus creating value. Value investing was established by Benjamin Graham and David Dodd.

Growth stocks are stocks that appreciate in value and yield a high return on equity, known as ROE. To calculate ROE, divide the company's net income by the company's equity. As a rule of thumb, for a stock to be in the growth stock class, analysts expect to see at least 15 percent return on equity. During some years growth stocks do well, in other years value stocks perform better.
Several technology stocks are traded on the NASDAQ. Technology stocks are some of the more popular stocks in the market as investors see them as exciting investments. There are several technology stock sectors including the Internet, Cable & Satellite, Computers & Chips and others. Technology stocks were very popular in the late 1990's. Today, technology stocks are still a highly covered segment of the stock market.
Small cap stocks, also known as small caps are a popular stock market segment for stock research by investors. Small cap stocks are stocks of companies with a market capitalization of less than one billion dollars.

Microcap stocks are stock of companies with a market capitalization of less than $250 million. Both generally, have more risk than Blue Chip stocks represented by the Dow Jones Industrial Average. It is important to understand market capitalization. Market cap is a measurement of corporate or economic size. It is calculated by multiplying the number of shares outstanding times the share price of a public company.

Value Investment Books (17) -Get started in value investing

Getting Started in Value Investing
By Charles Mizrahi
An accessible introduction to the proven method of value investing

An ardent follower of Warren Buffett-the most high-profile value investor today-author Charles Mizrahi has long believed in the power of this proven approach. Now, with Getting Started in Value Investing, Mizrahi breaks down this successful strategy so that anyone can learn how to use it in his or her own investment endeavors. Written in a straightforward and accessible style, this book helps readers gain an overall understanding of the value approach to investing and presents statistics that reveal the overwhelming success of this approach through a variety of markets. Engaging and informative, Getting Started in Value Investing skillfully shows readers how to look for undervalued companies and provides them with the tools they need to succeed in today's markets.

Charles S. Mizrahi (Brooklyn, NY) is Managing Partner of CGM Partners Fund LP. He is also editor of Hidden Values Alert, a monthly newsletter focused on value investing. Mizrahi has more than 25 years of investment experience and is frequently quoted in the press. Many of his articles appear online at gurufocus.com as well as on other financial sites.

Value investing book

Value Investment Books (16) - 5 Key in value investing

The 5 Keys to Value Investing
By J. Dennis Jean-Jacques
The investing style that made Warren Buffett the world's wealthiest investor!

Strategies for Identifying Today's Best-Run Corporations--Then Buying Them for Pennies on the Dollar

As an investor, you don't buy stocks; you buy companies. The Five Key Steps to Value Investing shows you how to ensure that the company you're investing in is solid and wellmanaged and, most important of all, worth more than you are paying.

J. Dennis Jean-Jacques, who made his name as an investment analyst working with legendary value investor Michael Price, presents in the form of a clear framework a time-proven value investing strategy for identifying well-run companies, then investing only in those that are undervalued. Find out here how today's best value investors:

Obtain insights and information from a company's financial statement
Buy strong, growing companies at a significant discount to their true values
Identify and capitalize on events destined to spur stock price appreciation
Accomplished value investors pay little attention to the ebb and flow of the stock market; instead, they concentrate on the intrinsic worth of a company. The Five Key Steps to Value Investing introduces you to the tenets of value investing. It then provides you with the hands-on tools and long-term confidence you need to construct a portfolio of solid, low-maintenance, and high-value stocks--each bought at a substantial discount to their true worth.

It shows you how to become a value investor, investing only in companies with market-proven performance and track records of superior growth. This commonsense guidebook will help you:

Understand--and apply--the Five Levers of Value to each investment decision
Analyze the strengths and weaknesses of a company's management team
Properly assess price, and locate gaps between market price and actual value
Determine a stock's current safety levels through margin-of-safety analysis
Know when the time is right to sell a company's stock and move on
The Five Key Steps to Value Investing is about companies: what makes a solid company, and how you can uncover companies with those attributes that have been overlooked by today's stock-of-the-minute marketplace. In-depth yet inherently readable, this value investing guide will show you how to assemble a strong portfolio of value stocks built to withstand temporary market gyrations--and make you wealthy over the long term.

Proven effective by decades of investors from Benjamin Graham through Warren Buffett, value investing is an essential strategy for making intelligent investment decisions in turbulent times. Let The Five Key Steps to Value Investing put you on the right road to becoming a value investor, buying today's best-run companies at a discount and selling them at a premium--if you decide to sell them at all.

Value investing book

Value Investment Books (15) -Value investing made easy

Value Investing Made Easy: Benjamin Graham's Classic Investment Strategy Explained for Everyone
By Janet Lowe

Discover the principles that made Warren Buffett a billionaire! Developed by legendary Wall Street wizard Benjamin Graham, mentor of Warren Buffett, value investing strategies are the most reliable, fail-safe, and successful money-making methods ever invested for investing on Wall Street. Janet Lowe presents these methods in a crisp, readable, and easy-to-understand style, covering, how to: Size up a company's growth prospects; Spot intentionally manipulated and misleading balance sheets and income figures; Create a "margin of safety" for your investments.

From the Back Cover
An investing classic—now in paperback! Now every investor can profit from the proven techniques of Benjamin Graham, "the most influential investment philosopher of the 20th century."—Smart Money. For more than 60 years, savvy stock market pros like Warren Buffett have practiced Benjamin Graham’s principles of value investing, the technique that ferrets out undervalued stocks and uncovers hidden winners—with minimal risk. What was once an insider’s secret is now a wealth-building strategy every investor can use! In a clear, easy-to-understand style laced with entertaining stories and quotes, financial writer Janet Lowe demystifies value investing and gives you simple-to-use trading tactics that can help you reap enormous rewards. Praise for Value Investing Made Easy: "A book whose time has come."-Richard Russell, Editor and Publisher, Dow Theory Letters. "The best guidance possible for the investor."-Charles Brandes, Managing Director, Brandes Investment Partners and author of Value Investing Today.

Value investment book

Value Investment Books (14) -Essential Buffet

Applying Buffett's principles to technology and international investing

From the bestselling author of The Warren Buffett Way and The Warren Buffett Portfolio comes The Essential Buffett: Timeless Principles for the New Economy. In this fresh take on Buffett's irrefutable investment methods, Robert Hagstrom shows readers how to apply Buffett's principles to technology and international investing using real-life case studies of successful fund managers like Legg Mason's Bill Miller.

Following the Buffett model, Hagstrom explains Buffett's four timeless principles: 1) analyze a stock as a business; 2) demand a margin of safety for each purchase; 3) manage a focus portfolio; 4) protect yourself from the speculative and emotional forces of the market. Then Hagstrom shows how Buffett's thinking can be applied in the new economy, addressing technology investing, international investing, small cap stocks, and socially responsible investing. Perhaps most valuable are Hagstrom's insights into the psychology behind Buffett's focus investing. For the first time, we are given sure-fire guidelines on how to become a winning Buffett disciple.

The Essential Buffett will include convenient sidebars featuring key Buffett ideas, enabling readers to quickly compare Buffett's fundamental tenets.

Value investment book

Value Investment Books (13) -How to think like Graham, Invest like Buffet

Using the ways of the best moneymakers to invest wisely

"An intelligent and thoughtful guide."­­BusinessWeek

". . . a welcome addition to the bookshelf of anyone who wants to take control of his or her financial life."­­United Press International

The bestselling hardcover edition of How to Think Like Benjamin Graham and Invest Like Warren Buffett was widely hailed for its straightforward approach to making wise investment choices. This paperback version makes these same tools and tactics available to a wider audience. Explaining how to analyze investment targets based on honest value instead of hype and mirrors, Lawrence Cunningham's top-ranked book reveals:

How to ask valuable questions, and demand meaningful answers
Market-proven methods for evaluating managers and CEOs
Value investing techniques that made Warren Buffett a billionaire­­and today's number one investor


Value investment book

Value Investment Book (12) -The best investment advice

The Best Investment Advice I Ever Received: Priceless Wisdom from Warren Buffett, Jim Cramer, Suze Orman, Steve Forbes, and Dozens of Other Top Financial Experts
By Liz Claman

Wouldn't you like to sit in a room and ask the following people for their investment advice?

-John C. Bogle (Founder, Vanguard Group)
-Warren Buffett (CEO of Berkshire Hathaway)
-Bill Gross (Founder and CIO, PIMCO)
-Susan Ivey (CEO, ReynoldsAmerican Inc.)
-A.G. Lafley (Chairman, Procter & Gamble)
-Georgette Mosbacher (CEO, Borghese Cosmetics)
-John Myers (CEO, GE Asset Management)
-Suze Orman (bestselling author)
-Steve Forbes (President, Forbes magazine)

These and dozens of other investment professionals offer their personal secrets of success when it comes to making money. And along the way, they provide their own insights on whether you should diversify your portfolio (or put your cash somewhere else), whether you should pick your own stocks (or let a pro do it for you), if investing in real estate is really the answer to great wealth, if saving a few pennies here and there really do add up, and much, much more.
The book is edited by Claman to be extremely accessible to all investors, regardless of their financial background.

Value investment book

Value Investment Book (11) -How to pick stock like Warren Buffet

A $10,000 investment in Warren Buffett's original 1956 portfolio would today be worth a staggering $250 million ... after taxes! What are his investing secrets? How to Pick Stocks Like Warren Buffett contains the answers and shows, step-by-profitable-step, how any investor can follow Buffett's path to consistently find bargains in all markets: up, down, or sideways.

How to Pick Stocks Like Warren Buffett sticks to the basics: how Buffett continually finds bargain stocks passed over by others. Written by an actual financial analyst who uses Buffett's strategies professionally, this tactical how-to book includes:

Comprehensive financial tools and information
Strategy-packed "Buffett in action" boxes
Buffett's own stock portfolio­­continually updated on the author's website!

Learn How Warren Buffett Consistently Beats Wall Street to the Best Stocks­­and What He Plans Next

Warren Buffett is the only billionaire in history to amass his fortune entirely through shrewd investing. And while many books have chronicled Buffett's story, none have examined his legendary value investing techniques­­where he looks, what he looks for, and what signals tell him it's time to buy.

How to Pick Stocks Like Warren Buffett shows, step by profitable step, how any investor can follow Buffett's path and find consistent bargains regardless of the overall market. Value investing practitioner and chronicler Timothy Vick packs the book with:

Comprehensive value investing tools and information

Methods for appraising today¿s popular technology stocks

Insights on how Buffett assesses risk and potential reward

Praise for How to Pick Stocks Like Warren Buffett

"This is a must read for anyone wanting to learn the investing techniques of Warren Buffett."­­Mary Buffett, Author, Buffettology

"I have seen no trend toward value investing in the 35 years I've practiced it. There seems to be some perverse human characteristic that likes to make easy things difficult."
--Warren Buffett

Warren Buffett is widely considered history's greatest investor. This fascinating man­­humorous and homespun on the outside, serious and ready for battle on the inside­­would have the world believe his success was as simple as adding 2 + 2. But the truth is entirely different. As How to Pick Stocks Like Warren Buffett reveals, Buffett has a clear and consistent set of investment rules and methods that have brought him and his investors unparalleled good fortune. These tools­­including which performance numbers Buffett considers most critical, strategies he employs to take advantage of consistently irrational markets, management attitudes that make him look favorably on a situation, and more­­are, for the first time, analyzed with the attention to detail investors require.

The resulting book is nothing less than a step-by-step rulebook for emulating Buffett's startling investment successes.

"What doesn't work is when you start doing things you don't understand or because they worked last week for somebody else. The dumbest reason in the world to buy a stock is because it's going up."

Far from a scratch-the-surface biography filled with interesting but extraneous biographic material, How to Pick Stocks Like Warren Buffett takes you straight to the core of Buffett's investing genius. Timothy Vick tells you how Buffett did it, how he continues to do it, and how you can follow Buffett's lead to build an impressive portfolio of your own.

Nowhere else will you find this depth and breadth of Buffett's keen market insights:

Three strategies for gaining market-beating results without assuming excessive risks
Techniques for estimating a company¿s future earnings­­one of the fundamental bases of intrinsic value
Why per-share book value growth remains Buffett's favorite yardstick of a company's investment potential
How Buffett seeks to avoid losses through convertibles, options, and his secret weapon­­arbitrage
Warren Buffett has left a clearer, more profitable set of tracks to follow than any other great investor. Discover how to uncover, interpret, and follow those tracks­­for consistently high rates of return and a portfolio of solid, predictable, and long-term profitable stocks and investments­­in How to Pick Stocks Like Warren Buffett.

Value investment book

Value investment Books (10) - Warren Buffet way

Buffett is back . . . and better than before!

A decade has passed since the book that introduced the world to Warren Buffett -- The Warren Buffett Way by Robert Hagstrom -- first appeared. That groundbreaking book spent 21 weeks on the New York Times Hardcover Nonfiction Bestseller list and sold over 1 million copies.

Since then, Warren Buffett has solidified his reputation as the greatest investor of all time -- becoming even richer and more successful, despite the wild fluctuation of the markets. How does this value investing legend continue to do it? That's where Robert Hagstrom and the Second Edition of The Warren Buffet Way come in. This edition is a completely revised and updated look at the Oracle of Omaha -- comprising Buffett's numerous investments and accomplishments over the past ten years, as well as the timeless and highly successful investment strategies and techniques he has always used to come out a market winner. This edition is especially accessible as Buffett's basic tenets of investing are presented and illuminated with relevant and up to date examples.

Editorial Reviews
From Publishers Weekly
Starting with $10,000 in 1956 and today worth some $8.5 billion, with significant holdings in Coca-Cola, Capital Cities/ ABC and the Washington Post Company, Omaha, Nebr.-based Buffet is a major player on Wall Street. Financial consultant Hagstrom, who did not interview his subject but obtained permission to quote from his Berkshire Hathaway annual reports, here outlines Buffet's iconoclastic tenets for investing. Unlike many entrepreneurs who take over companies to sell them off in bits, Buffet buys and holds. He rejects the "efficient market theory"; he doesn't worry about the stock market; and he buys a business, not a stock. He manages with a small staff, no computers and a "hands off" strategy. Learning his secrets here, now the rest of us can do a Buffet? Illustrations. Fortune Book Club dual main selection.
Copyright 1994 Reed Business Information, Inc.

Valur investment book

Value Investment Books (9) -Essay of Warren Buffett

The definitive work concerning Warren Buffett and intelligent investment philosophy, this is a collection of Buffett's letters to the shareholders of Berkshire Hathaway written over the past few decades that together furnish an enormously valuable informal education. The letters distill in plain words all the basic principles of sound business practices. They are arranged and introduced by a leading apostle of the 'value' school and noted scholar, Lawrence Cunningham.

What's new in the second edition? This new edition has extensive additional content that highlights topics of vital national or international significance, including:
- the proliferation of stock option compensation and excessive CEO pay;
- Berkshire s shareholder-designated contribution program and the controversy over the abortion issue that led to its termination;
- the explosion of derivative financial instruments and related perils and how Berkshire dealt with managing a sizable portfolio of them after buying Gen Re;
- the dramatic increase in foreign currency trading in the past five years along with the astonishing growth in the US trade deficit;
- management succession at Berkshire Hathaway as Mr. Buffett ages;
- commentary on his philanthropic thinking in giving his entire fortune to charities; and
- the fairness and other matters concerning taxation of corporations.

Here in one place are the priceless pearls of business and investment wisdom, woven into a delightful narrative on the major topics concerning both managers and investors. These timeless lessons are useful to members of a wide range of professions, including law, accounting, finance and management, and provide rich teaching materials for courses in those fields.


Customer Reviews
Topical and timely additions
Without a doubt, The Essays of Warren Buffett : Lessons for Corporate America was a definitive and clear insight into the mind of a genius - just see my review for this first edition. The Second Edition, however, adds another dimension reflective of today's business and investing environment.

Value investment book

Value Investment Textbooks (8)- Common Stock and uncommon profit

One of the most important works ever written on investment theory, Common Stocks and Uncommon Profits lays out the fundamental principles of intelligent investing. Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies are not only studied and applied by today's finance professionals, but are also regarded by many as gospel. Abridged.

Editorial Reviews
From AudioFile
This program takes a fundamental view of what it takes to be a top-drawer business worthy of your investment dollar. It's based on traditional company variables like capitalization, market position, and labor relations, and some new variables like organizational adaptability and leadership depth and vision. The broad thinking and nuances are so intuitive and clearly drawn that listeners won't even realize how abstract and intelligent this writing is. The impressive piece of work is nicely abridged, and George Guidall is as connected to the material as anyone could be. Still, this is not for the cognitively challenged, nor for overly aggressive investors nor those with money hang-ups. A great resource for understanding why some companies are great and which ones will be. T.W. © AudioFile 2001, Portland, Maine-- Copyright © AudioFile, Portland, Maine

Book Info
Text presents some of the writings of Philip Fisher, with a new preface and introduction by Kenneth Fisher. Previous edition: c1996. Softcover. DLC: Stocks.

The publisher, John Wiley & Sons
Regarded as one of the pioneers of modern investment theory, Philip A. Fisher's investment principles are studied and used by contemporary finance professionals including Warren Buffett. Fisher was the first to consider a stock's worth in terms of potential growth instead of just price trends and absolute value. His principles espouse identifying long-term growth stocks and their emerging value as opposed to choosing short-term trades for initial profit. First published in 1958, this investment classic is considered a must-read as the foundation for many of today's popular investment beliefs.

Value investment book

Value Investment Textbooks (7)- Beating the street

Develop a Winning Investment Strategy -- with Expert Advice from "The Nation's #1 Money Manager"

Peter Lynch's "invest in what you know" strategy has made him a household name with investors both big and small.

An important key to investing, Lynch says, is to remember that stocks are not lottery tickets. There's a company behind every stock and a reason companies -- and their stocks -- perform the way they do. In this book, newly revised and updated for the paperback edition, Peter Lynch shows you how you can become an expert in a company and how you can build a profitable investment portfolio, based on your own experience and insights and on straightforward do-it-yourself research. There's no reason the individual investor can't match wits with the experts, and this book will show you how.

In Beating the Street, Lynch for the first time:

* Explains how to devise a mutual fund strategy

* Shows how he goes about picking stocks, step-by-step

* Describes how the individual investor can improve his or her investment performance to rival that of the experts of the investment clubs.

Value investing book

7 Traits of Highly Profitable and Sustainable Companies

Value investing guru Warren Buffett have followed these rules to identify good stocks. Don't invest in stock unless you have read this. Stable and increasing sales, earnings and cash flow
Good companies worth investing in should have stable and increasing sales, earnings and cash flow for a 5 years track record in a row. You can find these information in the income statement to find out more information on this. You can find financial statements for companies at sites like http://anualreportservice.com , http://finance.google.com and http://www.morningstar.com

Competitive advantage

My favorite book on competitive advantage is "Competive Advantage: Creating and Sustaining Superior Performance" by Michael E. Porter. Basically, there are two basic types of competitive advantage. They are cost advantage and differentiation advantage.

A good company must have sustainable competitive advantage in order to prevent competitors from coming in and steal the market share. Other types of competitive advantage could come in the form of brand loyalty, patents, technology, economy of scale (which results companies to purchase cheaper supplies or lowers the cost of production than other competitors due to the size of the organization), high switching costs for customers and market leadership

Companies that are not worth investing in are companies that sell commodity type of products or services and compete on cost efficiency. A good company is one where the company increases the prices and the demand is not that much affected. For companies like MacDonalds, Gillette and Harvley Davidson, they have strong brand loyalty. It would be impossible for new companies to come in and compete on pricing along.

However, stock prices of such companies might seem significantly overpriced at this point in time. The secret is to purchase when the market has underpriced the stock.

Future Growth

Look under shareholder's reports for companies for news on future growth like development of new product lines, expansions for production, new patents and new stores,

Conservative Debt

A healthy financial statement should not have long term debt 3-4 times current net earnings (after tax) It means that a company is able to clear its debt within 3 - 4 years. Return on Equity

Return on equity is another important figure to look at in a company's statement. A high return on equity shows that the company has a high sustainable competitive advantage. It is recommended that you choose a company with at least 12% return on equity

Return on Equity (ROE) = (Net Income / Total Shareholder Equity) x 100%

Low Capital Expenditure (CAPEX) to maintain current operations

Our investment guru Warren Buffett avoids companies that have high CAPEX as the companies have to spend a significant amount of their earnings to replace and maintain expensive machinery, instead of spending the earnings to expand its operations. If Warren Buffett doesn't choose that, why should you?

Whether management is selling or buying their own stock

If the top management has been selling a significant amount of their shares, it shows that they do not have confidence in their own shares at the current prices. Perhaps, the prices have been overvalued and they are selling the shares for profit.


by by Keith Lee

8 Money Secrets From Warren Buffett

We all have someone whom we admire and respect. For me one person on my shortlist is Warren Buffett who is sometimes referred to as the "Sage of Omaha". I first heard about Buffett back in 2001 when I first started getting serious about investing and so I started reading all the titles with his name on it. Off course Buffett hasn't actually written any of them but they were priceless none the less.
If you have never heard of Buffett, Forbes currently ranks him as the third richest man in the world and he is arguably the world's greatest investor. He has amassed his fortune by making astute investment decisions and investing in businesses. Here is what I have learnt from Buffett:

1. Rich Is A State Of Mind "I always knew I was going to be rich. I don't think I ever doubted it for a minute." - Warren Buffett

The difference between being poor and being rich is really just a state of mind. Poor people think thoughts of poverty and lack, rich people think thoughts of abundance and prosperity. Your beliefs are going to determine the way you perceive wealth, the decisions you make and the way you act towards it.

2. Success Is More Than About Your Bank Balance When asked by CNBC what is the secret to success, Buffett replied "If people get to my age and they have the people love them that they want to have love them, they're successful. It doesn't make any difference if they've got a thousand dollars in the bank or a billion dollars in the bank... Success is really doing what you love and doing it well. It's as simple as that. I've never met anyone doing that who doesn't feel like a success. And I've met plenty of people who have not achieved that and whose lives are miserable."

3. Spend Less Than You Earn "Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks." -Warren Buffett

It seems like common sense advice and you've no doubt heard financial experts preaching about it for years. You can't possibly get ahead financially if you're spending more than your paycheck. Buffett is famous for living a simple and frugal lifestyle. He is the only billionaire I know that still lives in the same house he bought back in 1958 for $31,500. He drove a 2001 Lincoln Town Car for years which he bought second hand. Buffett has a net worth in excess of $52 billion and yet lives off an annual salary of $100,000. The relative percentage of his spending based on his overall net worth is minuscule.

4. Avoid Consumer Debt The sooner we realize that consumerism is a social plague that has been propagated by billion dollar marketing machines to keep you shackled to your job, the sooner we can stop spending money on useless stuff. It is a fool's game to spend today so that you can work tomorrow to pay it off. It is a losing proposition because one day your working days are going to be over but the debt is still going to be hanging over your head. Clever marketing has convinced our society that to be happy you have to have more, be more and do more. Buffett abhors consumer debt instead choosing to use debt wisely by leveraging it in investments.

5. You Are Who You Associate With "It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction." -Warren Buffett

If you want to succeed financially you need to associate with people who are most conducive to encouraging and cheering on your financial journey. If the people you associate with see money as evil, object to capitalism and find wealth a foreign concept then your financial health and well being is going to be influenced by their views. Whether we like it or not we are all influenced to some extent by the people we spend our primary time with. If you aspire to achieve financial security then you need to find a mastermind of people in your life whom you can all encourage and help each other.

6. Gambling Is A Fools Game "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." - Warren Buffett

While we are young and naive we choose to take risks with our money that are dumb and stupid. Trying to hit a home run with your money every time is a losing proposition with long term consequences. To chase investments that offer a high rate of return you must also assume that it also comes with a higher rate of risk. Bill Gates once quipped "Warren's and my betting has always been confined to $1 bets" when talking about them paying poker together. If two billionaires take risk management this seriously, it's time we average punters did the same thing.

7. Give Back To The Community "Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars." - Warren Buffett

They say that to have more you need to give more. A contradiction in terms, maybe, but it's a simple truth that is as enduring as time. As the bible says "It is more blessed to give than to receive -Acts 20:35". Buffett has announced in 2006 that he was giving away over $30 billion to the Bill and Melinda Gates Foundation making it at the time of writing the largest charitable donation in history. He also contributes large sums to his children's charitable foundations.

8. Generosity and Abundance Goes Hand In Hand "Even though Ben Graham [Buffett's mentor] had everything he needed in life, he still wanted to give something back by teaching, So just as we got it from somebody else, we don't want it to stop with us. We want to pass it along too." - Warren Buffett

A famous bible quote goes: "What benefit will it be to you if you gain the whole world but lose your own soul?" - Mark 8:36. The path to wealth isn't a solo endeavor. How sad would life be if you come to the end of your life and there is no one to share it with. So as you journey on your path to financial abundance remember that there will be many people who generously helped you on your journey so it is only fitting to pay it forward when the opportunity arises. Generosity with your time, with your money, with your resources are great virtues to have. The greatest ally to building a strong friendship is to help others achieve what they want from life.

I leave you with this last quote "You only have to do a very few things right in your life so long as you don't do too many things wrong." - Warren Buffett

by Terence Young
Being 4 Eva Young is not about age, it's about attitude. 4 Eva Young is dedicated to inspire, motivate and encourage anyone who is young at heart to live a life of significance filled with peace, joy, and contentment. For more information visit: http://www.4evayoung.com

Mr. Market, Benjamin Graham, and DailyStocks

A wise man said, "Price is what you pay for; Value is what you get." This one sentence encapsulates the concept of the value investing discipline.
Benjamin Graham, the father of Value Investing, and Warren Buffett's mentor, extended this concept to the stock market by illustrating the following parable. From Intelligent Investor:

Imagine that in some private enterprise you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very indeed very obliging. Every day he tells you what he thinks your share ownership is worth and furthermore offers either to purchase you out or sell you an additional share of ownership on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his euphoria or his pessimism run away with him, and the value he offers seems to you a little short of silly.

If you were a prudent investor or a sensible businessman, you would not let Mr. Market's daily communication determine your view of the value of your share ownership in the business. You may be willing to sell out to him when he quotes you an extremely high price, and equally willing to buy from him when his price is ridiculously low. But at the rest of the time, you would be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position."

Put another way, one must distinguish "quotational loss" versus "permanent loss of capital". The former is movement in the price of a stock due to psychological sentiment, liquidity issues or other factors. The latter is a "permanent damage" to the franchise of the business due to fundamental factors - such as product obsolescence, permanent changes in market demand for a product, losing market share to a better competitor, changes in the habits of customers, upcoming product substitutes.

This all sounds simple. But it begs the question: How does one know if the value of a business is changing? The answer is not to look at the stock price, but to do your own research. For example - try the product, visit the store, read business and trade magazines, or ask friends who are customers of the business. An alternative is to do research on the internet and gather facts and data points about the business.

With the internet, fundamental research on stocks has never been as widely available and convenient as before. You can go directly to the company's SEC Filing, pick up a chart, news headlines, get analyst's estimates and ratings, earnings history, financial statements and many more. You can also do market research on government web sites and other trade association web sites. Finally, if you have the time, you can participate in many active communities and discuss with others about a product, a stock, etc.

by Maria Suarez
DailyStocks.com, http://www.dailystocks.com , offers the ticker-based research portal so that by typing a stock symbol only once, a person can access all the information directly related to the stock symbol without having to retype each time.

How To Allocate Your Money for Maximum Returns & Minimum Risk

So with all these money multiplication strategies, where should you put your hard earned savings? How should you allocate your funds to generate maximum gains yet minimize your risks?
I am sure you have heard of the term 'don't put all your eggs in one basket.' Even though you are going to learn how to achieve minimum risk & maximum returns in each basket, it is still wise to allocate your funds into different instruments with different targeted holding periods. In times of emergency when you need the cash, you can be sure that all your funds are not stuck in one place.

Now, here is an important disclaimer. In most financial textbooks, they advise diversifying your funds into many different investment vehicles like bonds, stocks, mutual funds, money markets instruments as well as spreading your money across numerous different sectors and different countries to diversify your risks. To an average investor who has low financial competence and needs the wide diversification to lower risk, this makes sense. However, while this kind of broad diversification guarantees low risk, it also guarantees low returns of 5%-8%.

I personally do not follow this strategy. Warren Buffett advises that 'broad diversification is used by people to protect themselves against their own ignorance.' If you know what you are doing (high financial intelligence), you should concentrate your portfolio into equities (stocks & mutual funds) as they achieve the highest return. And you can achieve low risk not by simply spreading your money around, but by your competence of knowing which funds and stocks to pick.

So, the strategy I am going to share with you would be deemed highly risky by the general financial advisors and bankers. Again, it's because most investors lack the competence to do otherwise. However, with the strategies and knowledge you are gaining in this book, you will prove to yourself that it is actually low risk, high return strategy.

Knowing how to allocate the money you save is the single most important decision that will lead to your financial goals. You should take your monthly savings of 15-20% and allocate it to four money baskets. These are the security basket, growth basket, high growth basket and the luxury basket. Let me explain each of these.

1. Security Basket (Target Return of 1.5%-4.5%pa) This first basket is as the name implies, for your security. The funds in this basket grow just enough to keep pace with inflation. However, they are there in case of emergencies. If you suddenly lose your job, experience a salary cut or suffer a setback in your business, you know that you will have access to these funds anytime to see you through.

This basket should include cash, fixed deposits/certificates of deposits, personal housing, insurance & capital guaranteed funds.

2. Growth Basket 1 (Target Return of 8.51%-20%pa) This is the basket where you build your net worth & positive cash flow assets that will lead you to financial freedom. This basket is where you put your money into index funds, Exchange Traded Funds (ETFs) and mutual funds. You should also divide your funds between the US market and Asian markets. Although mentioned earlier that Asian equities have disadvantages, we cannot deny the huge growth opportunities that Asia offers (especially India and China).

3. Growth Basket 2 (15%-25%) This is the basket where you ACCELERATE the building of your net worth & positive cash flow assets that will lead you to financial freedom. Once again, you should not have to touch this money for five to ten years to let the power of compounding work its magic.

This basket is where you put your money into a winning portfolio of ten to twelve company stocks. And again, you should hold some Asian stocks as well as US stocks.

4. Luxury Basket (0%) Your luxury basket is where you save up to indulge in your dream assets. This is money that you can afford to spend on things that are fun like: Upgrading to a dream house, luxury cars, jewelry, boats and other luxuries. Again remember from the chapter on 'How the rich manage their cash flow' that the money to be used for luxuries should not come from your primary source of income, but from the passive income generated from your positive cash flow assets.

by Adam Khoo ; an entrepreneur, best-selling author and a self-made millionaire by the age of 26. Discover his million dollar secrets and claim your FREE bonus report 'Get Out Of The Rat Race Now' at Secrets Of Self-Made Millionaires.

Stock Investment Errors You Don't Want To Make

Don't lose money. Billionaire investor Warren Buffett himself has coined this popular mantra of the investment world. That's easier said than done of course, considering the amount of risks involved when trading in the stock market. Even seasoned investors have sustained losses at one time or another. However, by avoiding the following common investing pitfalls, you can minimize your losses and gain profits from your investments.

1. Putting your money on something you don't understand. So you've heard that your neighbor just had his house remodeled with the profits he made from the stock market. You want your own share of the pie too so you hastily purchase stocks of the first company you saw on the gainers list. It would have been funny if you were Homer Simpson but in reality, you have just made a very unwise decision. Before buying stocks in a company, you should first have a clear understanding of its business model and financial history. The stability of the sector it belongs to should also be taken into consideration. Even good companies with solid businesses could suffer from a nasty devaluation if its sector is in trouble.

2. Becoming emotionally attached to your stocks. It's tempting to hold on to your stocks even when sound financial reasoning tells you to sell them. After all, you've already spent so much time and effort poring over pages of market reports and corporate information until you finally found the ideal company you want to invest on. You also want to prove that you made the right decision in choosing that company. However, holding on too long to your stocks because of sheer emotional attachment could lead to huge losses. If your stocks have been on a consistent low and there are signs of trouble in the company, then be willing to sell even if it hurts. Remember: you buy stocks to make money; you're not supposed to marry them.

3. Putting all your eggs in one basket. You are not afraid of taking risks but you also don't want to end up penniless. Then your favorite word should be diversification. In building up your stock portfolio, be sure to acquire stocks from all major sectors such as property, industry, financial, oil, and services. That way, you prevent your entire investment from going down the drain in case one sector takes a nosedive. A good rule is to limit an investment to 10 percent of your portfolio.

4. Aiming for a turnover overload. The stock market is no place for impulsive buying (and selling). If you're into the habit of buying stocks and selling them after a short period of time with little or no gains to show for it, then your broker must be filthy rich with commissions by now. Keep in mind that each trade comes with transaction costs and taxes. If you're not careful, then what profits you have could be easily wiped out by the accompanying costs of your high turnover. You could also miss out on the possible gains of your investment in the long run.

Knowing the possible errors in stock investment is already a step ahead for you. There are still a thousand and one pitfalls out there that you may stumble upon but the important thing is to learn as you go along. After all, even billionaire investors make mistakes too.

by Kristien Wilkinson ; an online writer and contributor to http://www.tradingstocks.com

8 Ways to Reduce Stock Investment Risks

Investors, Drive Down Wall Street with Care!
With all the hullabaloo about speculation, an amateur investor may naturally assume that Wall Street is strictly for gamblers. This is a great pity, because probably a long-term investor can get better results in the stock market than elsewhere, provided he follows a few fairly simple rules. Also, it would help in the public understanding of how free enterprise, and especially big business, is owned, if more of our non-gambling citizens participated in owning corporate stocks.

Traditionally, being an equity owner of business involves serious risk, sometimes complete failure. An investor, knowing the instances of bad results in small business ventures, may assume that in buying corporate stock he must expect to run somewhat comparable risks, and so he makes no attempt to learn how to reduce the danger. Apparently a great many shareholders have attitudes more or less like this. They may not want to gamble, but they don't bother even to inquire how Wall Street investment risks could be lowered. A serious market investor, wanting to avoid gambling in stock investments, must do some serious investing thoughts.
The 8 main ideas for reducing the risks are mentioned below:

1. Avoid Investment Egotism. Realizing that there are several million stockholders in this country, admit to yourself that probably quite a lot of these people are just as smart as you are. Be satisfied with results a little better than average. Don't let your ego runs for 50% if the market average is performing 25%.

2. Avoid Prophets, especially the positive ones. The stock market reflects events and rumors from all over the world, and no man or any group of men can be sure of what is going to happen, or when. Some prophets are paid to write for some companies. They do not always deliver genuine opinion. I would refer to their comments and analysis, but rely on your judgment of market sentiment and stock fundamentals for investing decision.

3. Don't Borrow on Stock. Market price might drop and wipe you out. You do not want excessive interests to incur, and in the worst case, you do not want a lender's call back that affects your key assets like home or business ownerships. Maintenance of your personal and family's stability is a priority over stock investment.

4. Diversify your Stock Portfolio. Don't put all of your capital into one investment, or into just one type. Put part of your savings into common stock, the other part into fixed-price items cashable at any time, to preserve the dollar value. Own stocks in a good number of companies. The larger the number, the better the chance of getting average results. And for real diversification, the companies should be in several different industries. For instance, pick a steel manufacturer, an oil refiner, an electric-power company, an electronics manufacturer, an IT firm, a department-store chain, and so on.

5. Check stock Marketability. Before you buy, make sure that you can sell or redeem it easily and promptly. Stocks of big blue-chip corporations like Microsoft, GE, Google are more liquid and hence easier to be transacted in the market.

6. Choose Skilled Management team. Find out how to pick a stock with great management level of proven competence. Warren Buffett investigates into a company's leadership, credibility in its past performance delivery and the management's capability to propel further growth.

7. Time your Buying and Selling. Adopt rules on timing of your buying and selling stock. The time of action is a major risk in owning stock. After you buy, maybe the price drops; and after you sell, perhaps the price rises. Maintain a standard ratio between the current market value of your stock and your reserve. Also, buy and sell stock only in small installments, never moving a large portion of your capital within a short time. By spreading installments over many months, you obtain a fair average price per share. Patience has a big factor in success of stock investments. If you could sit and wait for the correction times to buy quality stocks, you are on your way to success!

8. Review periodically. Don't put stock away and forget it. At regular intervals, as for example after the close of each week, check back to see how well your stock has performed during the past few weeks or months in comparison to other stocks you might buy.

Can you afford Investment Risks? Drive Carefully! A reader's reaction to these ways of reducing risk may be: "Those are nice ideas, provided a man has considerable capital, but they are impractical with only small savings. A broker's charge is a high percentage on a small transaction, so a little investor cannot afford to make a large number of small purchases and sales. Also, the fee for first-class advice is too high for an ordinary investor to pay." This reader's complaint is valid, provided he insists on owning stock in the customary old way-that is, being a direct owner of stock in corporations engaged in manufacturing, mining, transportation, retailing, and so on. But the mutual funds, the open-end type of investment companies, make it quite practical for a man with only small savings to use every one of the ideas listed above for lowering the risk of owning stock. An investor learns and matures through time. I urge you to take the above 8 ideas, study deeper into them for applications. Risk avoiding tips given here need to be internalized before positive results could happen. I wish you well in your stock investment venture!

by John Kiing
a freelance writer and stock investor in U.S and Asian stock markets. He writes for 101StockInvestments.com - a FREE resource center for novice or seasoned market investors. This article could be distributed digitally as long as the website links remain intact.

Warran Buffet-stock picking strategy(2)

At the Warren Buffett stock picks website, we devote time to learning how to invest like Warren Buffett. Throughout the years, the Warren Buffett portfolio has been consistent through his many years as CEO of Berkshire Hathaway. Warren Buffett companies can be described as thus:

companies that are easy to understand
companies that have a competitive advantage from their competitors
companies that the shareholder will own for the long term
companies bought when the valuation was right
companies that stand the test of time

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Warran Buffet-stock picking strategy

Warren Buffett was pronounced the world's richest man for 2008 by Forbes magazine. Needless to say, he has done tremendously well amassing a fortune of $62 billion which is why so many people follow Warren Buffett's stocks.
The question is, why not just buy a share in his holding company, Berkshire Hathaway, and be done with it? The answer always comes down to money. In this case, Berkshire Hathaway Class A shares trade at around $130k which is quite cost prohibitive. Class B shares trade at 1/30th of the price of Class A shares but that still amounts to more than $4300.

And then you have to ask yourself is it really worth it? While the Berkshire Hathaway portfolio has tremendous blue-chip companies, you're also paying a premium on Buffett's good name. There's also the worry that Berkshire shares will decrease in value once Warren Buffett passes on. It will be a knee jerk reaction but that is the reality. So, why not do it yourself as an individual investor? A study showed that following Warren Buffett stock picks a month after they disclosed to the public still netted returns of over 14% a year.

There is a saying: "Give a man a fish and he will eat for a day. Teach him how to fish and he will eat for a lifetime."

If we use this as an analogy to investing, we can see that Warren Buffett is providing the fish, but as individual investors, we need to deconstruct his method of finding winning stocks to invest.

According to Buffett, here are his rules for investing:

finding a company he understands, favorable long-term economics, good management, reasonable price.

Imagine a topic as complicated as investing can be broken down to 4 simple rules like that. Keep it simple, as the housing market bubble with its complicated mortgage derivatives have taught us. And who can argue with the success that Warren Buffett has shown?

by Biz Blogger http://www.goarticles.com

Why Invest in the Stock Market? And what has Buffett got to do with it?

Investing in the Stock Market
Assuming that you have some money, and want to increase that initial sum of money to become very rich. You should invest in the stock market, and buy stocks yourself. Why invest in the stock market? The stock market is a very good way of making lots of money if one knows how to do so. I myself am a fan of Warren Buffett's method of investment. True enough, modelling some famous investor could be useful, but "a poll is no substitute for thought"... if I remember Buffett correctly. This means that we should emulate Buffett, but with our eyes wide open, and amend our investment strategies accordingly.

There are technical analysts, value investors (of which Warren Buffett is the greatest exponent, along with his teacher Ben Graham), speculators, fund managers, and so on. Now I am recommending that to make a lot of money, you can replicate Buffett's system.

One, buy low and sell high. Many make this mistake. They buy high and sell low, when fear sets in.

Two, don't trade too much. Costs are certain, but profit is not certain. Hence, try to keep transaction costs low and see that you make money on stocks.

Three, fundamental analysis is more important than technical analysis. The stupidest reason, according to Buffett, is to buy something because the price is rising. This is the key idea here: margin of safety. This means that you buy a company that is strong fundamentally and that the price you pay is lower than the company's perceived strength and economic advantage. You want to buy a good company at a cheap relative rate.

Four, make sure you can list out the reasons why you buy a stock. What are its strengths? Does it have a comparative advantage? If you cannot answer basic questions about the company, DON'T DO IT!

Finally, investing takes time. You won't make money right away. Do these and in the long run, you won't regret.

Investing in the stock market can make you a really rich person. Do visit my website on finance, investment, money making ideas and more, to find out how to become very rich.

by Shawn Seah
TheSUBWAY.com : Small Cap Stock Promoters
has established a national reputation for providing investor relations services. Risk Tolerant Investors, Public Corporations, Promoters : We have the best of all three worlds. The one source for High Risk High Return Education and Information. Public Corporations who are profiled on The SUBWAY have had a great history of realizing the benefits of increased exposure in the marketplace.

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Warren Buffett : Learning the Stock Trade from the Greats

In any practice of life, be it boxing or painting, those who want to be the greatest look to learn from those who've already become the greatest. By watching legends in action, you can also study what they do and determine why they do it and apply it to your own practices. Investing is no different. If someone wants to be a great investor, they must study the moves of those who have been most successful. And one of those greats is Warren Buffett.

Buffett, who was just recently named the world's richest man by Forbes magazine with a net worth of $62 billion, is regarded as one of the greatest American investors. Born August 30, 1930 in Omaha, Nebraska, Buffett's father was a stock broker, giving him early exposure to investing and business. He attended Columbia Business School to study under the famous economist and investor Benjamin Graham. By 24, Buffett was working under Graham on Wall Street. By 32, Buffett had combined seven existing partnerships into one. By 35, he took control of manufacturing firm Berkshire Hathaway. This was all less than halfway into his career.

Aside from being what could be the world's most frugal billionaire, living off an annual salary of less than $200,000, watching Warren Buffett's actions can help teach up-and-coming investors some serious lessons. While the grand majority of investors would be happier with stocks that got them quick money, Buffett's strategy runs more along the lines of the maxim, "slow and steady wins the race." He only invests in businesses that have proven to be sure things by researching their histories. Rather than looking to make quick cash in an economic bubble that will inevitably pop, Buffett chooses investments with less volatility.

Another lesson to be learned from Buffett's strategy is compounding. Compounding looks at how the value of an investment can increase immensely in the long run, rather than how quickly it will pay off in the short run. Using the rule of 72 (dividing 72 by an investment's annual rate of return), Buffett came up with an accurate formula which determined how long it would take an investment's value to double. Buffett's annual return in the first half of his career was 29%, which meant according to the rule of 72, that he was doubling his value every two and a half years. Now pause a moment and extrapolate that. In ten years, with that kind of return rate, $5,000 becomes $40,000, or $20,000 becomes $160,000! Compounding's subtle method in making an investor a lot of money over an extended period of time is something Warren Buffett mastered.

And, naturally, like any other great legend, Warren Buffett can teach you the value of a strong work ethic. Buffett's name would not be so easily remembered had he not worked hard to get what he has now. Through his ambition and diligence he managed to exercise his practices to their greatest potential. This is the one universal characteristic known in all of history's greatest heroes.


Article by Tom Simmons