The New Buffettology: The Proven Techniques for Investing Successfully in Changing Markets That Have Made Warren Buffett the World's Most Famous Investor

by Mary Buffett, David Clark

If you read the original Buffettology, you only know half of what you need to effectively apply Warren Buffett's investment strategies.

Published in 1997, the bestselling Buffettology was written specifically for investors in the midst of a long bull market. Since then we've seen the internet bubble burst, the collapse of Enron, and investors scrambling to move their assets—what remains of them—back to the safety of traditional blue chip companies. As price peaks turned into troughs, worried investors wondered if there was any constant in today's volatile market. The answer is yes: Warren Buffett's value investing strategies make money.

The New Buffettology is the first guide to Warren Buffett's selective contrarian investment strategy for exploiting down stocks—a strategy that has made him the nation's second-richest person. Designed to teach investors how to decipher and use financial information the way Buffett himself does, this book guides investors through opportunity-rich bear markets, walking them step-by-step through the equations and formulas Buffett uses to determine what to buy, what to sell— and when. Authors Mary Buffett and David Clark explore Buffett's recent investments in detail, proving time and again that his strategy has earned enormous profits at a time no one expects them to—and with almost zero risk to his capital.

In short, The New Buffettology is an essential companion to the original Buffettology, a road map to investment success in the worst of times.

Genres: Finance, Business, Nonfiction, Economics, Money, Personal Finance

288 pages, Hardcover

First published September 3, 2002

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

[Yousif Al Zeera · Rating 4 out of 5]

Superb insights into the overall philosophy of Warren Buffet and his "value/selective contrarian" approach into investing. An abridged audiobook version of around 3 hours and 35 minutes.

[Allison · Rating 4 out of 5]

- Warren Buffett has separated the world of businesses into two categories: healthy, durable-competitive-advantage businesses and sick, price-competitive-commodity businesses. A company with a durable competitive advantage usually produces a brand-name product or occupies a unique position the marketplace that allows it to act like a monopoly.

- Warren Buffett thinks that the best kind of business to own is one with high profit margins and high inventory turnover. Warren Buffett believes that the second-best kind of business to own is one with either high profit margins or a high enough inventory turnover to compensate for lower profit margins

- The price-competitive, "sick" business is easy to identify because it usually sells a product or service whose price is the single most important motivating factor in the consumer's decision to buy, e.g. Internet portal companies, Internet service providers, memory-chip manufacturers, airlines, producers of raw foodstuffs, steel producers, gas and oil companies, The lumber industry, paper manufacturers, automobile manufacturers, etc. Many price-competitive companies carry the added weight of huge amounts of long-term debt because they are constantly upgrading their plant and equipment to stay competitive

- Having a low-cost durable competitive advantage (keep its competitive advantage well into the future without having to expend great sums of capital to maintain it) is important to Warren Buffett for two reasons. The first is the predictability of the business's earning power. The second reason why lost-cost durability is important is that it enhances the company's ability to use the superior earnings that a competitive advantage produces to expand shareholders' fortunes as opposed to simply maintaining them

- When stock market analysts and media pundits proclaim that earnings are no longer important in valuation, the bull market is in its final phase. This is where it begins to bubble. The bubble is about to burst when you read that value-oriented fund managers are quitting the business because they can't compete with momentum-fund managers.

- Bad-news situations come in five basic flavors: stock market correction or panic, industry recession, individual business calamity, structural changes and war.

- Warren Buffett has discovered four basic types of businesses with durable competitive advantages: 1) Businesses that fulfill a repetitive consumer need with products that wear out fast or are used up quickly, that have brand-name appeal, and that merchants have to carry or use to stay in business. 2) Advertising businesses, which provide a service that manufacturers must continuously use to persuade the public to buy their products. 3) Businesses that provide repetitive consumer services that people and businesses are consistently in need of. 4) Low-cost producers and sellers of common products that most people have to buy at some time in their life.

- The Warren Buffett Screen:

(1) Does the company show a consistently high return on shareholders' equity (above 12%)?

(2) Does the company show a consistently high return ontotal capital (12% or better)?

(3) Do earnings show a strong upward trend?

(4) Is the company conservatively financed?

(5) Does the company have a brand-name product or service that gives it a competitive advantage in the marketplace?

(6) Does the company rely on an organized labor force?

(7) Can the company increase prices along with inflation?

(8) How does the company allocate retained earnings?

(9) Does the company repurchase shares?

(10) Are the company's share price and book value on the rise?

- Situations like a change in the business environment, a change in a company's business model and reaching a stock's target price can dictate a sale.

[Joe Rapisarda · Rating 5 out of 5]

I feel this is the single greatest investing book ever written. It give step-by-step process on how to fairly easily compute the future value of any business and then work it backwards to determine the price you need to buy to get the desired return you want. This is the only way investing make any sense, but the vast majority of investors out there have no idea how to determine the value of a business. This book teaches you everything you need to know.

[Osh · Rating 5 out of 5]

นี่เป็นหนังสือที่อยู่กับผมมาจะ 10 ปีแล้ว ผมซื้อเล่มนี้มาตั้งแต่เริ่มต้นศึกษาการลงทุนใหม่ ๆ

มันอยู่กับผมมานาน แต่ก็เพิ่งได้มีโอกาสหยิบขึ้นมาอ่าน

หนังสือการลงทุนแบบเน้นคุณค่า ในโลกนี้ มีหนังสือดี ๆ เยอะแยะเต็มไปหมด ผมอ่านมาก็หลายเล่ม แต่ผมพลาดการอ่านหนังสือดี ๆ เล่มนี้ไปได้อย่างไร

อยากรู้เหมือนกันว่า ถ้าตัวเองได้มีโอกาสอ่านหนังสือเล่มนี้เมื่อหลายปีก่อน ตอนนี้ผมตอบแทนเฉลี่ยจากการลงทุนต่อปี จะสูงกว่าตอนนี้หรือเปล่า?

แต่ไม่ว่าอย่างไรก็ตาม หนังสือเล่มนี้ดีมาก ผมว่า Buffettology เล่มแรกดีแล้วนะ แต่ The New Buffettology มีความสมบูรณ์พร้อมกว่าเล่มแรกอีก

ทางที่ดี อ่านมันทั้ง 2 เล่มนั่นแหละ แล้วจะรู้สึกว่าการค้นหาหุ้นดี ๆ ด้วยการใช้วิธีจากหนังสือทั้ง 2 เล่มนี้ มันโคตรสนุกเลย

[Basil Murad · Rating 4 out of 5]

It's a great book to know more about Warren's way of investing, nonetheless, there was some repeated points, that it could be eliminated.

[Dzabinski · Rating 4 out of 5]

I'm not sure how it compares to the original Buffettology but this book gives you a firm foundation in simple terms for identifying and evaluating companies.

It makes the assumption that you are willing to take the time to compare a number of companies and that you subscribe to a service that provides historical data for those companies. Considering that those qualifiers should be a given this book gets right to the practical application and makes everything (feel) simple and straightforward.

I would recommend this for anyone seriously looking to learn how to evaluate and do basic projections on companies.

[Joshua Tanuwidjaya · Rating 5 out of 5]

Once I tried to read the intelligent investor, but with the lack of comprehensive language, I failed to understand the book. This book is way easier to read than Uncle Ben's book. It defines the step by step how to value a business and determine does it have a durable competitive advantage. If you are looking to add value investing in your skillset, then you can't afford to miss having this book on your reading list!

[Ramaswamy · Rating 5 out of 5]

This is a must read book on Value Investing and exhaustively cover the four aspects of investing, Identification of good companies, Analysis, When to Buy and When to Sell. The book discusses Buffet's approaches like Selective Contrarian Approach, Durable Competitive Advantage etc.
You can read the full review in my blog post.
http://investments-manofallseasons.bl...

[Rachel · Rating 2 out of 5]

The prinicples are spot on, however it repeats the same principles over and over again and an extremely boring way and is TERRIBLY slow. You could rewrite this book and have it be less than fifty pages long.

[Hasta Fu · Rating 3 out of 5]

Mary Buffett and David Clark's *The New Buffettology* is a comprehensive guide to Warren Buffett's investment strategies, emphasizing value investing and the importance of a company's competitive advantage. I listened to the audiobook from Libby with subscription of Singapore NLB.

The book outlines Buffett's contrarian approach, advocating for buying stocks during market downturns when others are fearful. It is true that in order to make a good investment, one needs to wait for the right timing, especially in non leveraged instruments. A high purchase price takes higher price to breakeven and make profit.

I personally had a very memorable occasion around 5 October 2024, when market crashed due to JPY carry trade, I would say that day is the good timing to buy. It is counter cyclical, but surely will turn out a good profit.

Other concepts include focusing on companies with durable competitive advantages, understanding financial metrics like Return on Equity, and determining intrinsic value for optimal buying opportunities. Many traders nowadays emphasises on daily profit or intraday trade, but in my personal experience holding a well-researched position long enough gives better yield without the pain of spending a lot of energy to do trade.

This book serves as a practical manual for long-term wealth creation rather than short-term gains, making it a good supplementary for serious investors.

[Cullen Haynes · Rating 4 out of 5]

Having been on my shelf for well over 5 years, it was time to finally read ‘The New Buffettology’; due to elapsed time, The Not-so-New Buffettology would be more apt.

Written from the aside, the author (also a Buffett) attempts to distil many of the practices Buffet and his company Berkshire Hathaway use to identify companies with a durable competitive advantage (brand name, market leader and consistent without need for significant future outlays of capital) while also predicting future value.

The book uses market examples, which although are dated, still concisely highlight his techniques in action. I finished the book, and was most impressed that his future value tool calculated his firms current share price from when book first published to within a few thousand, now $300,000USD

[James Jr. · Rating 5 out of 5]

The New Buffettology was written by Mary Buffett, who at one time was the daughter-in-law of Warren Buffett. Warren Buffett holds the title of "World's Greatest Investor." In her book, Buffett goes into great details explaining the principles and strategies that Warren Buffett use to invest in businesses or individual stocks. She is a excellent communicator by taking a subject that can be very complex and explaining it in a manner that's easily understood. This is an outstanding book for those desiring to learn how Warren Buffett thinks and invests. The book lived up to my expectations with the information that it provided but also far exceeded them. Again, this is an outstanding book!

[Michelle · Rating 3 out of 5]

Good from the perspective of understanding Warren Buffet and his strategy for making money. Perhaps solid for following his path but also rather obvious that without large amounts of seed capitol, its impossible to follow his path because you don't have the sway he does when he purchases a company. There are a few remarks that hint as this, such as when he's talking about buying the stock of a company and he talks with the owner or CEO or whatever the status was (book on tape so its challenging to reference) and they discuss what the future plans of the business are. Not exactly available to the average person...

[A · Rating 4 out of 5]

Good introduction to value investing for a beginner. Easy to digest and helps you to understand common terms. But unlike what the book promises, just reading this is not going to give you the tools to find the intrinsic value of securities. If you are already familiar with the basics of value investing such as the idea of stock as a piece of ownership, the concept of Mr. Market, basic valuation metrics, ratios, etc, then you might not gain a lot by picking this book up. However, if you are a starter, it is a good introductory book.

[M.E. Kincaid · Rating 5 out of 5]

Lots of great nuggets in this book for a person who has minimal experience with Value Investing. Key insights gained from a Buffet family insider, as well as some “Xs and Os” of the value investing methodology will provide a firm foundation for the beginning value investor. I’d recommend reading this book prior to reading the two staples of value investing; The Intelligent Investor, and Security Analysis. This is a very digestible prologue to those two texts.

[Kira Huiqi Ho · Rating 4 out of 5]

The message of the book is simple and concise - Warren Buffett buys durable stocks instead of following the trend. He understands the companies he is investing in and appears to have a very good grasp of what is happening in the market.

In the advent of the rise of retail investors populating the stock market and behaving extremely irrationally, the Buffetts remind us how to practice prudence and caution as we learn from the giants.

[Kirk G. Meyer · Rating 5 out of 5]

A good book that provides some excellent insight into how Buffet might evaluate investing opportunities. Goes into some nice detail on how to do this yourself and judge the appropriateness of investments. Discussed some of Buffett’s investment in some general terms. The book is a bit dated but still worth reading.

[Jaime Fanlo · Rating 4 out of 5]

A good simple explanation to company valuation, and Warren Buffet's basic framework for his investment decisions.

It covered the basics for the most part and i found it a good tool for a new investor like me. Though having been written a while back, most of its examples are somewhat dated (90s to early 2000s).

[Jason Wicky Ong · Rating 4 out of 5]

There are some good learning points in the book. The authors also shared some of Warren Buffett's actual investments and investment philosophy. However, the book seems to be written for the laymen at times. The number of times the authors repeated the words 'Durable' and 'competitive advantage' were truly astonishing. Maybe they want to emphasize the words over and over again so they chose not to use other words.

Overall, it's a decent financial book written using simple English.

[William Skuban · Rating 4 out of 5]

3.5/10 but it's not an option
A solid refresher on Buffett’s thinking, but a bit too simplified for my taste. I enjoyed the relative value model to bonds introduced toward the end, especially the contrast between old and new Buffett. Skimmed through most of it, hoping for deeper insights that never fully came.

[Hom Sack · Rating 5 out of 5]

More detail and analysis in this edition. The case studies in chapter 19 is outdated, their current stock values and performance outlook don't look that good. Nevertheless, the book is a worthwhile read.

[Kap · Rating 5 out of 5]

My first book on investing. It made me realize how much I don't know about the stock market. And it taught me the virtues of being patient and that there's so much more than searching a stock and hit trade on robinhood!

[Kunlonewolf · Rating 4 out of 5]

ในเล่ม 1 นั้นจะให้เห็นเเนวคิดการลงทุนเเบบนามธรรมเเละพื้นฐาน ซึ่งยังไม่เห็นภาพมากเท่าที่ควร เเต่ในเล่ม 2 นี้ จะเห็นเเนวคิด วิธีการทำเเบบรูปธรรม ทำให้เห็นภาพมากกว่าเดิม ในเเบบที่จับต้องได้ (เเต่บทเกือบสุดท้ายเเอบน่าเบื่อ)

[Darshan · Rating 5 out of 5]

There cannot be a better book to learn the concepts and magic of investing. It analyzes almost all the cases of Buffet's investing and explains the reasons for them.

[Josh Clausen · Rating 3 out of 5]

Pretty decent information, but a litte dated now. If you're familiar with Buffett, there's not much overwhelmingly new

[Zain · Rating 5 out of 5]

This book discusses strategy of Buffet in detail which distinguishes him from other investors. Excellent Read !

[Dwarakanath Reddy · Rating 5 out of 5]

Good book.

[Sandip Bhattacharya · Rating 5 out of 5]

A great book

This is an outstanding book. Must read for all serious in investment. Idea on stock arbitrage is a bonus. Thanks.

[Raghav · Rating 4 out of 5]

Book was good but many concepts of the buffettology were just simply and blantly repeated. And many of things were repetitive.

[Karl Hallbjörnsson · Rating 3 out of 5]

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