The Warren Buffett Stock Portfolio: Warren Buffett Stock Picks: Why and When He Is Investing in Them

by Mary Buffett, David Clark

Bestselling authors Mary Buffett and David Clark examine seventeen companies that Warren Buffett has bought for himself and for his holding company, Berkshire Hathaway, as durable investments and explain why these companies are once again selling at prices that offer great long-term growth prospects.

Warren Buffett has always believed that the time to buy stocks is when nobody else wants them. Even some of the most amazing businesses—those with a durable competitive advantage—are trading at prices and price-to-earnings ratios that offer investors serious long-term moneymaking opportunities. Pessimism about the banking situation in Europe and unemployment in America have created the perfect storm to bring stock prices down and present value-oriented investors some great possibilities.

In Warren Buffett’s world, as stock prices decrease, the prospects for investment increase. Putting a number on those prospects tells Warren whether or not the stock is an attractive buy. The Warren Buffett Stock Portfolio explains how to do just that—how to value companies and conservatively estimate the kind of future return that an investment is offering at its current market price. Mary Buffett and David Clark look at stocks in Warren’s portfolio as the basis for their analysis.

After a brief history of Warren’s investment strategy, Buffett and Clark explain how to interpret a company’s per-share earnings and per-share book-value histories to quickly identify which companies have a durable competitive advantage and to project the compounding annual rate of return that an investment offers. The authors provide case studies and evaluations of seventeen companies in Warren Buffett’s portfolio.

The Warren Buffett Stock Portfolio is a valuable companion to the other books in Buffett and Clark’s successful series— Buffettology, The Buffettology Workbook, The New Buffettology, The Tao of Warren Buffett, Warren Buffett and the Interpretation of Financial Statements, Warren Buffett’s Management Secrets, and Warren Buffett and the Art of Stock Arbitrage

Genres: Finance, Business, Nonfiction, Money, Economics

240 pages, Hardcover

First published October 1, 2011

About the author

Mary Buffett is a best-selling author, international speaker, entrepreneur, political and environmental activist. Ms. Buffett’s first book Buffettology, co-written with David Clark in 1997, was an immediate New York Times and Business Week best-seller. Since that time, all seven of Ms. Buffett’s books have been best-sellers.
Ms. Buffett appears regularly on television as one of the top finance experts in America including CNN Business News, CNBC’s Squawk Box, Power Lunch with Bill Griffith, Bloomberg News, Fox Business News, MSNBC’s Headliners and Legends and BBC News.
She has appeared around the world as a principal speaker at some of the world’s most prestigious organizations including recent appearances with Laura Bush, Colin Powell and other prominent achievers filling arenas around the country as part of the Get Motivated seminar series.
Ms. Buffett has worked successfully in a wide range of businesses including extensive work as a consultant to a number of Fortune 500 companies including AOL Time Warner, as an executive at Columbia Records and as co-founder or her own music and editorial post-production companies, Independent Sound and Superior Assembly, working with many of the music industry’s biggest stars. She has also taught Business and Finance at several California State Universities, including UCLA.
Mary is the proud mother of three successful children and lives in California.

Reviews

[Andrei Cioban · Rating 4 out of 5]

A bit repetitive after a while.

[Ferhat Elmas · Rating 3 out of 5]

A brief history of Buffett portfolio companies from 2000s and a detailed/repetitive Burroughs' formula application on them. Useful to sink it in if you can't yet make this calculation in your head intuitively.

[Mark · Rating 3 out of 5]

This book talks about the stocks Warren Buffett has in his portfolio in 2011. Surprisingly, many of the stocks talked about in this book are the same ones I would pick if I was in the stock market. However, the books goes into reasoning behind why Warren Buffett picks them, instead of a hunch.

[Fakhry Mansour · Rating 4 out of 5]

An interesting book with lots of facts. Tells us how Warren Buffet invests and how to invest. I would recommend this book to anyone who enjoys stocks and finance. This is a very in depth book written by Buffets wife on how and when Buffet decided to invest and in what also that investors should not be scared of losing a little because it will happen the key point is not giving in because like everything the stock will eventually rise and the investor will start making money. Key companies and stocks were mentioned and also how Buffet attracted these stocks and how only until recently he had other people decide what stocks to invest in. Buffet has around 95% in deciding which to invest in while the rest of his team has 5% approximately. Finally this book is very interesting and very key for people who enjoy investing and who are thinking of becoming stock brokers in the near future. It is an overall easy read and fun other than recommending it to stock lovers I would also recommend it to anyone who enjoys finance and/or business related topics.

[Kyle · Rating 2 out of 5]

Nothing really new in this book that you can’t learn from Buffettology. Very repetitive in terms of the valuation process. I really like the valuation process that’s used in this book as I think it’s both simple and effective. The one massive downfall, is that you can’t exactly just paste prior earnings growth onto the future and know with a high probability it will be repeated at the same rate.

I would’ve really enjoyed some insights into how he organized his probabilities that earnings would continue at historic rates. It is not as simple as looking at the previous 10 years of earnings then projecting it out for another 10 years, and then buying when it meets your rate of return benchmarks.

[Mike · Rating 1 out of 5]

I feel like this book fell flat on its objective of giving insight into Warren's stock picks. Started out okay but then introduced what seem to be contradictions without addressing them. About halfway through it felt incredibly repetitive. Only real insight I gained was the formula given to predict future earnings/return, but after the first few examples it was very copy&paste. Also presumably not an exclusive concept to this book.

Additionally, the actual manufacture of the book seemed shoddy. Unevenly cut pages, never seen that before.

[James Jr. · Rating 5 out of 5]

Mary Buffett and David Clark have done an amazing job in explaining how and why Warren Buffett picks specific stocks or companies to invest in. In this book, they actually take a historical look at 18 companies already in the Berkshire Hathaway portfolio and explains how Buffett went about selecting each one of those investments. This is an excellent book when it comes to giving investors a better understanding of the investment methodology of the World's Greatest Investor also known as the Sage of Omaha. I really enjoyed reading this book!

[Stringer Bell · Rating 3 out of 5]

The Good

1) Gives the reader some insight into what are the common traits in companies in Warren Buffet's portfolio
2)Gives a good starting point to understand the importance of consistent earnings and stable growt

The Bad/Not Good

1) The calculation of FV was at times "too simplistic" and not applicable for many companies in today's markets and in markets outside the US
2) The book does get repetitive after a few chapters and does not offer any new learning as such for all the companies in Warren Buffet's stock portfolio

[Edwin · Rating 3 out of 5]

I echo marks view on the copypasta that was done on the formulaic approach to eps projections. The biggest assumption was that earnings and growth could be extrapolated and the assumption was underpinned by the premise of "durable competitive advantage". I genuinely doubt the analysis would in fact be that simple. That said the narration of the business gave pretty good insights into the basic pieces of information one should have before buying into an issue.

[Abhishek Gupta · Rating 4 out of 5]

A good book for Warren Buffett’s followers. How and why Warren picks his favourite companies is explained in detail and clarity. What makes him hold his investments is also discussed along with some important financial metrics and ratios.
Though it may seem that these concepts are monotonously discussed across the book, it's still highly recommended for those who follow value investing and long term holding.

[Aeshwarya Jain · Rating 3 out of 5]

The book is an excellent read for people starting out in stock analysis. The simple and uniform structure will ensure that you are not lost in the jargonful world of finance. However, people with pre-existing knowledge of stock markets may quickly skim through or even skip this one and move to a more advanced read.

Read full review here: https://vanilla.finance.blog/2020/04/...

[Adriyana Grotseva · Rating 2 out of 5]

I started the book and then for 2 weeks couldn’t make myself finish it until today. You should read the first 7-8 chapters (which is like 1/3 of the book), where it talks overall re the calculations and definitions used in the book. And first chapters it starts with interesting storied abt the creation of the companies. Afterwards everything is very repetitive. Copy pasted with different numbers for the enclosing calculations and short intro of the companies at start of each chapter.

[James Worswick · Rating 2 out of 5]

The book is fairly repetitive on the quantitative analysis parts but I enjoyed the qualitative analysis aspects of this book.

As for the quantitative analysis; they were hits and misses. Plus, there are better books out there to learn quantitative analysis.

Another thing is for sure, time in the market with wonderful companies allows you to compound good wealth (even when the speculated market price for 2021 are misses for some). Plus it is luck/FED intervention that stocks in 2020-2021 have gone up so high when we have just faced another Black Swan event recently (Covid-19).

[Luigi · Rating 3 out of 5]

This book was OK, and while the concepts are current, the information is very dated. Times have moved on.
The format is tiring and would have made it almost a reference book in 2011 when it was published, the the world has moved on in the last 14 years.
Good basic information on identifying the fundamentals of a company's value and why Buffet likes the companies he does, or in this instance, did.

[Mindy · Rating 3 out of 5]

This book is good to get an idea of the stocks that Warren Buffett invests in. It highlights the keys of the companies that interests Warren Buffett make investment. However, the wordings are quite repetitive for each case study.

[Ramon · Rating 3 out of 5]

It's good to know how Buffett had chosen his stocks and the way he evaluates them, but the book is very repetitive. I felt like if I read 3 stock picks I'd absorb all the idea the book wants to share.

[Wenny H · Rating 3 out of 5]

A handy reference book to look at the for examples of value income investing and examples of companies with moats. Repetitive, yes, but the methods are repeatable afterall. Examples of straightforward blue-chip shares investing vs deep dive into all of Warren Buffett’s secret sauce ingredients.

[Muath · Rating 3 out of 5]

It's an interesting book, especially for the beginner. However, if you read it after 2015, you will gain great knowledge regarding the warren investing firms, but you should be willing to do your calculation of the firms.

[Stratos Kirtsios · Rating 2 out of 5]

Oversimplified! Would not recommend! You can do better with other books. Plus the picks praised at the time of writing are no longer good (if not terrible) by 2021. Thats a good irony. I would recommend only to read as a proof to keep in mind that the world changes fast. VERY FAST!

[Robert Grieco · Rating 5 out of 5]

Excellent book for anyone first starting out in investing. I found a wealth of good advice page after page. Finished the book in no time. Now I'm ready to jump into the market.

[Vinay V · Rating 4 out of 5]

An interesting way of evaluating the company’s future value including intangibles.

[Aasif A. · Rating 3 out of 5]

In depth knowledge of how to share and what to look forward in stock in rolls.

[Julie Burbank · Rating 5 out of 5]

If you want to learn the secret of success....well read this book.
Success takes time and patience.

[Angad · Rating 4 out of 5]

This is a great book, especially the first 30% of it. The case studies are great but are monotonous and repetitive. I finally created a dynamic excel sheet out of the formulas suggested by this book. I would recommend this to people who are at initial phases of investing and would like to grow their knowledge on the stock market.

[Mathew Deas · Rating 2 out of 5]

This book taught me a few interesting facts about the seventeen companies discussed, ex: the credit card industry practice of splitting the merchant fee with the acquiring bank and issuing bank and how American Express has a durable competitive advantage because it acts as the issuing bank, the acquiring bank and the network.
Aside from these few interesting facts, the seventeen chapters discussing the actual company picks are about as cut and paste as I can tolerate. Essentially, the last four pages of every chapter have this general format: a list of the last eleven or so years of earnings per share for the company, a paragraph "discussing" those earnings, a list of the last eleven or so years of book value per share, a similar paragraph to the one just stated for the book value, and then some type of "Buffett Buy Analysis" which, taking the prior years of earning history, projects what the stock price will be ten years later using the exact same calculation method each time.
To give the reader of this review an idea of just how repetitive and formulaic these chapters are: all seventeen of the chapters have a sentence in their "Buffett Buy Analysis" section that reads: "let's use the Future Value Calculator located on the Internet at http://www.invesopedia.com/calculator...", or some lazy permutation of this. All seventeen chapters contain that hyperlink in FULL, mentioned in almost the exact same manner.
The similarities in the last four pages of each of these seventeen chapters makes sixty eight pages out of this two hundred and eleven page book read identically, just with different numbers inserted in the exact same calculations over and over again. Having a third of the book read identically is near the upper limit of what I can tolerate. If you are thinking of giving this book a read take my advice: at MOST, skim through the last four pages of the seventeen company chapters as they are THAT repetitive, trust me because I've read them all.

[Ryan Wah · Rating 4 out of 5]

Buffett and Clark's premise is that given a company's last 11 years of earnings and dividends, the historic-low price-to-earnings (P/E ratio) data point, and a company with a track record of consistent earnings growth over time (which suggests a durable competitive advantage), an investor can produce a conservative estimate of the company's future stock value and return on investment.

With a financial calculator, the valuation process is six steps. The authors don't number the steps but if you count the number of calculations to arrive at the forecasted value in 10 years, it is six. These calculations are addition and multiplication, and basic time value of money functions: present value (PV), future value (FV), number of compounding periods in years (N), and interest rate (I/Y).

Some reviews noted the repetitiveness because Buffett and Clark go over this six step calculation process 17 times using different companies in Warren Buffet's portfolio; however, the repetitiveness is worthwhile because they published in 2011, estimated 2021 stock values for 17 companies, and now that 2021 has passed we can see how accurate their process is.

What you'll see is that an equally-weighted portfolio (where you invest an equal dollar amount in each company) produces an estimated 2021 return that is close to the actual 2021 return.

Endnotes:
* You have to diversify because there's a lot of variance in actual return vs. expected return. Some companies' actual returns significantly underperfomed the projections: GlaxoSmithKline (-68%), Coca-Cola (-65%), ConocoPhillips (-64%), and Wells Fargo (-57%), while others significantly outperformed: Costco (+231%) and Moody's (130%).

* The stock market's all-time high to-date was December 2021. Buffett and Clark's 2021 estimates would have been overly optimistic had the market not peaked at the right time.

* This actively managed portfolio of stocks selected by Warren Buffett underperformed the S&P 500, a passive index which had an annualized returned of 16% over the decade.

[Emek · Rating 4 out of 5]

I liked the equity-bond method of Warren, and the book is helpful in that it provides numbers (financials) of the firms rather than only telling their history and economic advantage.

[Anna S. · Rating 3 out of 5]

This one with business suite on the cover I don't mind. Not a 'selfie' pics.
Actually I just read 10 chapter out of 24 but I think it's enough to get the majority of the idea. So P/E and Book Value.
I never interested into copycating the way other people trading. My first good book in swing trading is "Swing trading for dummies" where I found motto "don't let other people do the analysis for you", not people in twitter, nor mailing list. And then I read the hardcore "charting only not looking at fundamental" and I saw a lot of flaws with them too.
So I picked this book, so that I can see what is value investing. So basically, it's a way to look at a very stable equity that acts pretty much like a bond - that yielded as a stock. It requires 10 consecutive years uptrend of P/E and PBV and also; is a company that's trading something that is "crisis-proofed" like Coca Cola. Generally companies that is so old that consumers doesn't bother to replace to another brand. It must have a really good reason backing up its sales.
It pretty much as what I thought, but I don't think it can be applied in emerging market in Asia, like Indonesia. Where foreign speculator with big cap money coming in and out so that we're pretty much dependent on how the feel about global market driven by war issue, FED, US economy, and so long. So I believe there's so little company with 10 years uptrend track record. Let alone that, I don't even know which one already trading 10 years ago.
Well. All this got me confused so I think I'll hold back these days and try to do some eyeball-ing research.
Surely you dont need to read each chapter cos its all same same analysis over the other stocks.

[Nick · Rating 3 out of 5]

Warren Buffet buys low and sells high. Who knew!? But seriously its a bit more complex than that. For the long term the strategy is to buy strong stocks which become undervalued during crashes and then hold on to them. For the medium term the strategy is to buy fairly good stocks during crashes, and then sell them during the recovery.

But what makes a good stock? Well a few things. Its probably counter to my interests to put this info out there, but what the hell its probably already on the internet: Brand name which inspires loyalty (Oreo). A product which will likely stay the same for the foreseeable future (chewing gum, Oreo again). A record of 10 years of steady growth. A global presence. Few R and D costs.

Also good: A trading price below the book value. A company that buys its own shares. Monopoly or oligpology. Easy to understand product (makes research more reliable)

Obviously any moral qualms need to be thrown out the window if you are investing.

At the end of each chapter it offers a template for calculating specific things like expected rate of return for each company. This is useful, but its inclusion in EVERY chapter is my main criticism of the book. This book could easily have been half the length. The last half of each chapter is almost identical. Even the wording is the same. Its like a cut and paste job. Really lazy. They could have just given you the template, and listed the numbers for each company. Oh well, I guess it fluffs the book out to 200 pages.

[Nick Lee · Rating 4 out of 5]

The Warren Buffett Stock Portfolio is a nice primer for beginner-level long-term investors. The book gives a compact overview of Warren Buffett's ideology on playing the stock market, as well as a short bio on how he made his wealth. He outlines his method through three indicators - historic ~10-year trend P/E ratios, whether xyz company has a "durable competitive advantage", - and espouses the purchase of shares in bear markets.

This book is a decent read and provides a case study of 17 major firms Berkshire Hathaway has in its investment portfolio. This book doesn't try to be an ultimate how-to guide, but I would have appreciated it if the book had included elaboration on the economic context for a long-term buy. It seems like a few big players fit Buffett's model and it does say in this book that he avoids tech stocks, simply because he believes new and intangible things to be volatile. The case companies include Coca Cola, BNY Mellon, and American Express, just to name a few. As a kind of 'companion read' to The Warren Buffett Stock Portfolio, readers may do a quick internet search to see what stocks he bought after the '08 financial crisis (i.e. Bank of America, Wells Fargo). Sometimes it would bother me when Mary Buffett, Warren's daughter-in-law, showed too much deference for him, although it leaves her interesting narrative virtually uninhibited.