Las reglas básicas de Warren Buffett: Palabras de sabiduría extraídas de las cartas del mayor inversor del mundo dirigidas a sus socios

by Jeremy C. Miller

Using the letters Warren Buffett wrote to his partners between 1956 and 1970, a veteran financial advisor presents the renowned guru's "ground rules" for investing - guidelines that remain startlingly relevant today.

In the 14 years between his time in New York with value-investing guru Benjamin Graham and his start as chairman of Berkshire Hathaway, Warren Buffett managed Buffett Partnership Limited, his first professional investing partnership. Over the course of that time - a period in which he experienced an unprecedented record of success - Buffett wrote semiannual letters to his small but growing group of partners, sharing his thoughts, approaches, and reflections.

Compiled for the first time, and with Buffett's permission, the letters spotlight his contrarian diversification strategy, his almost religious celebration of compounding interest, his preference for conservative rather than conventional decision making, and his goal and tactics for bettering market results by at least 10 percent annually. Demonstrating Buffett's intellectual rigor, they provide a framework to the craft of investing that had not existed Buffett built upon the quantitative contributions made by his famous teacher, Benjamin Graham, demonstrating how they could be applied and improved.

Jeremy Miller reveals how these letters offer us a rare look into Buffett's mind and offer accessible lessons in control and discipline - effective in bull and bear markets alike and in all types of investing climates - that are the bedrock of his success. Warren Buffett's Ground Rules paints a portrait of the sage as a young investor during a time when he developed the long-term value-oriented strategy that helped him build the foundation of his wealth - rules for success every investor needs today.

Genres: Finance, Business, Nonfiction, Money, Economics, Audiobook, Biography

420 pages, Kindle Edition

First published April 26, 2016

Reviews

[Jay French · Rating 3 out of 5]

American super-investor Warren Buffett wrote lengthy and explanatory letters to his investors throughout his career, starting in the late 1950s. The author of this book gathered snippets of these letters and brought them together in a topical format, with topics such as workouts, controls, taxes, and size vs performance. He provided an overall analysis for each topic, then included snippets from a number of investment letters on that topic covering in most cases multiple years. The author warns up front that this might seem repetitive but wanted to show Buffett’s thinking over the years. I can’t say I enjoyed the way the author did this. First issue was that I listened to the audio version of this book, and was often confused over whether I was hearing the author’s summary or Buffett’s letters. Investment in a second narrator to distinguish between the two would have made this much more easy to follow. Second, you soon realize that Buffett often used the exact same wording in different year’s versions of the letters, and often in the author’s analysis he again quotes that wording. So for the interesting bits, you can hear the same explanation or paragraph three times, maybe more. I’m not sure I saw much value in the repetition – the presentation of subsequent investment letter snippets was there to show growth and change in Buffett’s opinion, but often that was obvious without the repetition. Another feature of this book, which could be considered positively or negatively, was that a good percentage of the volume of the Buffett letters revolved around investments in companies that would be atypical for a person investing for himself in just the stock market. Why? Because Buffett wasn’t afraid to take ownership of his investments and to attempt to run them better than before, and most individual investors really aren’t to this level. Tied to this feature was the focus on earlier Buffett letters. I learned a lot about the mills that he invested in, but I didn’t learn as much about his investments in insurance companies, or American Express, or IBM. For example, Buffett invested in IBM starting in 2011, and recently sold off this investment, citing it as one of his failures. This book was released in 2016, yet there isn’t any mention of this investment. The focus is definitely on the distant past. Not that that is a bad thing – the idea is that Buffett’s investment philosophy is analysis of the basics of business operations, working in any era. It’s just that without more current examples, the book doesn’t provide current evidence that this is so.

Overall, if you are interested in the history of Buffett’s investment decisions, this is a nice summary. It could have used a bit more thinning of repetitive content for readability (like this review!).

[Pečivo · Rating 3 out of 5]

Protože jsem vystudovaný ekonom, tak mám několik výhod oproti normálním smrtelníkům - umím rychle mačkat kalkulačku, trefim autem na Chodov a taky je mi jasný, že se nemůžu spoléhat na stát až dovalim za pár let do důchodu. Předpokládám, že až ten čas nastane, tak průměrný důchod bude houska s paštikou a tři pleny. A za to si toho v Kauflandu moc nekoupim.

Když mi paní ve spořitelně nabídla 1,5% spořící úrok, tak jsem před její kanceláří padl na kolena a všechny banky světa proklel. To bylo v roce 2007. Krize která následovala je každému známa.

Nicméně můj problém i nadále zůstal - jak naložit s části příjmu tak, abych jako děda mohl nosit koženou bundu v all inclusive hotelu v Hurghadě? A tak jsem objevil tajemný svět akcií. A abych se něčemu přiučil, tak jsem si teď přečetl Warrena Buffeta, nejbohatšího dědu na světě, kterej v Kauflandu nakupuje halabala, aniž by musel sledovat co je v akci. A to chceš.

Kniha je sbírka dopisů, které posílal svým obchodním partnerům mezi roky 1950-1970. Prej se z nich dá vyčíst, jak se má investovat. Knihu jsem přečetl celou, ale co teď mám dělat teda vůbec nevím. Za to teď vím, že je třeba dobrý koupit tolik akcii podniku, aby člověk byl většinový akcionář a mohl tak podnik vést lépe.

No. To asi nepůjde, ale díky za tipy. 6/10.

[Arun Pandiyan · Rating 5 out of 5]

In 1956, Warren Buffet started a partnership with seven limited partners that had a total of $105,000 in capital. Over time, the partnership grew in size and profitability, and by the time Buffett dissolved it in 1969, it had a net worth of over $100 million. The partnership's success was remarkable, generating an average annual return of approximately 31.6% from 1956 to 1968. He then used the proceeds to focus on building Berkshire Hathaway into the conglomerate it is today.

This book is a compilation and analysis of letters that Warren Buffett wrote to his limited partners during his time managing the Buffett Partnership Ltd. (BPL). Providing the readers with valuable insights into Buffett's investment philosophy and early career as an investor, this book includes a comprehensive introduction that sets the context for the letters and features detailed commentary and analysis of each letter by the author that examines Buffett's approach to value investing, his emphasis on long-term investment strategies, his focus on understanding a company's fundamentals, and his insistence on staying within his circle of competence.

The "Warren Buffett's Ground Rules" refers to a set of 14 rules that Warren Buffett made an agreement with his partners during his time managing the BPL. He was unwaveringly committed to adhering to these rules throughout his tenure, and he did not change many of his principles.

1. Compounding

Warren Buffett is a strong believer in the power of compounding, which he has used throughout his career as an investor to build wealth. He often uses the wheat and the chessboard fable to illustrate this principle. In the story, a king offers to give a person one grain of wheat for the first square on a chessboard, two grains for the second square, four for the third square, and so on, doubling the amount of wheat for each subsequent square. By the time the 64th square is reached, the total amount of wheat is more than 18 quintillion grains, which is more than all the wheat that has ever been produced in the world.

Buffett applied this concept to his investment strategy, buying value stocks at low prices and allowing them to compound over time. He emphasized the importance of holding onto these investments for the long-term and resisting the urge to sell them in response to short-term market fluctuations. By focusing on companies with strong fundamentals and a competitive advantage, he believed that investors could achieve consistent, long-term growth in their portfolios through the power of compounding.

2. Indexing

It's true that Warren Buffett has been a long-time proponent of index investing, even before it became a popular strategy among investors. In his letters to his limited partners, he often extolled the virtues of investing in low-cost index funds as a way to achieve solid returns with minimal risk. Buffett recognized the benefits of index investing as a way to capture the returns of the overall market while avoiding the risks associated with trying to beat the market through active stock picking. He believed that most investors, including professionals, would be better off investing in a diversified portfolio of index funds rather than trying to beat the market through individual stock picks or market timing strategies.

3. Yardstick

Warren Buffet believed that it is important to measure progress in investing and used the Dow Jones as a yardstick to evaluate his overall performance. Similarly, for Indian investors, the Sensex and Nifty serve as yardsticks to measure portfolio returns. Buffet advised that if an investor is consistently underperforming the market index, such as having -5% returns in a high-growth year, it may be time to switch to low-cost index funds.

4. The Generals, The Workouts and Controls

"The Generals" referred to stocks of well-established companies with strong brand recognition, consistent earnings, and a long history of paying dividends. These stocks were generally considered safe and stable investments.

"The Workouts" referred to investments in special situations, such as companies undergoing restructuring or merger activity, where the outcome was expected to result in a profit.

"Controls" referred to investments where the partnership took a controlling interest in a company, allowing for greater influence over its operations and management.

Buffett believed that a successful investment portfolio should include a mix of these categories, with a focus on investing in undervalued stocks that have the potential to generate long-term returns.

5. Conservatism

In addition to focusing on investments that are within his circle of competence, Warren Buffett also emphasizes the importance of avoiding over-diversification. He believes that investors should only invest in companies they truly believe in and understand, rather than spreading their money too thinly across multiple companies. Buffett has famously compared over-diversification to a baseball player swinging at every pitch rather than waiting for the right pitch in their sweet spot. Just as a baseball player needs to be patient and disciplined to hit the ball well, investors need to be patient and disciplined in choosing their investments. By focusing on a smaller number of carefully selected investments, investors can reduce their exposure to market volatility and increase their chances of achieving long-term success.

"I feel the most objective test as to just how conservative our manner of investing is arises through evaluation of performance in down markets," wrote Buffett, suggesting that it was easy to make money in a bull market but that the real skill in investing lay in preserving capital during bear markets.

6. Avoiding Trading and Short-Term Gains

Warren Buffett has long been a vocal proponent of long-term investing, emphasizing the importance of patience and avoiding the temptation of short-term gains through frequent trading. He has repeatedly advised investors to focus on the fundamentals of the companies they are investing in, rather than trying to time the market or make quick profits. In one of his famous quotes, Buffett said, "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes." This emphasizes the importance of a long-term investment horizon and a focus on fundamental value.

"If Benjamin Graham wrote the Bible of value investing, then Warren Buffett wrote the New Testament." This metaphor suggests that while Graham's book was ground-breaking and foundational, Buffett's ideas have built upon and updated those ideas for modern times. While Warren Buffett's Ground Rules for Investing may have been written several decades ago, the timeless principles outlined within it continue to be relevant and valuable for investors today.

[Aidan Heron · Rating 3 out of 5]

Brilliant investment lessons and an opportunity to peak into Buffets operation before Berkshire. Great read for anyone considering a value investment approach.

The only reason for a reduced rating was a relatively large amounts of repetition between Millers extracted 'lessons' and the actual quotations of Buffet. Plus an inability to read full letters was sometimes a disadvantage.

[Cam · Rating 5 out of 5]

Although there is some repetition - the author summarises the key points of each letter before the letter itself is presented - this is a great book. A wonderful way to immerse yourself in the Buffett wisdom.

[Erika · Rating 2 out of 5]

Intressant, men inte så mycket mer.

[InvestingByTheBooks.com · Rating 4 out of 5]

I like this book. It’s got a genuine and honest feeling. There are several dozens of books on Warren Buffett. What makes this one special or needed? All other texts on Buffett’s methodology are based on how he has conducted his business at Berkshire Hathaway. However, before this Buffett managed money at Buffett Partnership Limited, with a different methodology and arguably with even better results. Investment analyst Jeremy Miller’s book is unique as it covers this first period by going through the partnership’s investment letters to its investors. The name Warren Buffett’s Ground Rules refers to 7 rules that Buffett presented for the partnership’s original investors and that were meant to facilitate aligned interests between them and him. In asset management having the right investors is a crucial success factor.

The book’s structure is simple but well executed. Each chapter is dedicated to a theme. First the author presents the topic and what Buffett’s view was. Then follows a number of quotes from the investment letters on the subject and the chapter ends with a short conclusion by Miller. Each chapter is 15-20 pages and as they are very legible it’s easy to end up reading “just one more”. The only objection is that there is a fair amount of repetition between the discussion and the quotes. The chapters are organized in three parts where the second part is the most interesting. The first part covers a number of introductory and high level topics like compounding, indexing and the partnership structure. The third also includes various topics that although often important and, as always when it comes to Buffett, brilliantly described are on a relatively high abstraction level and a bit dry. The middle part is dedicated to investing. This is where it becomes interesting.

It is relatively well known that the early Buffett was a deep value investor walking in the footsteps of his mentor Benjamin Graham. This indeed was the core strategy but Buffett’s implementation was different than Graham’s. Although the perception that Graham only saw to numbers and not to the
qualitative aspects of a business is false, most of his focus was still on low valuation multiples in combination with other financial ratios and he diversified broadly. Buffett was from the beginning a focus investor only holding a few of his best ideas in the portfolio and thus had to understand each company in depth.

Instead of diversifying over a large number of stocks the partnership diversified over three different and somewhat uncorrelated types of investment cases that they called Generals, Workouts and Controls – each requiring a different investment methodology. In modern terminology we would name the strategies deep value, merger arbitrage and activism. Generals, the bulk of the portfolio, were stocks that were cheap with regards to either their assets or earnings. Due to the much larger size of the Berkshire portfolio and cheered on by Charlie Munger, Buffett moved on from deep value to compounding franchise stocks. Interestingly this change was already underway in the latter part of the partnership years. The complementary merger arbitrage situations are quite traditional but display Buffett’s statistical skills. Activism at its best is value investing with inbuilt triggers. Buffett held large positions in small companies where he saw opportunities for improvements and actively worked to make them happen. However, he didn’t enjoy the human drama of activism and subsequently left the area.

Buffett might have been precocious but reading this book you realize that he didn’t start out fully formed, he did his share of trial-and-error. Over the years I have picked up bits and pieces about these years. Here things fall into place and by this puts Buffett into perspective. What Lawrence Cunningham’s bestseller The Essays of Warren Buffett has done for bringing Buffett’s writing during the Berkshire era to the public, Jeremy Miller’s thoughtful book now does for the writing of the partnership era. In combination they give a much fuller understanding of the phenomenon that is Warren Buffett.

[Diogo Pereira · Rating 4 out of 5]

Compilation of letters that Warren Buffet sent to partners during his Partnership at the early stage of his career, complemented by summaries and context provided by the author of the book. Brilliant content not only on an investment standpoint but also as a gauge to improve decision-making in several aspects of life. Accessible to non-savy financial readers as rarely dwelves into complex technical language. Chapters do tend to repeat themselves at some points as it analyses the same passages of the letters several times.

[Anna Tsurkan · Rating 3 out of 5]

Моя вторая книга по инвестированию. Интересно было посмотреть на ход мыслей успешного человека. Однако, сам формат, письма партнером, трудно воспринимать. Плюс, много повторений. Хотя, кое-какие идеи подчерпнуть можно.

[Калоян Захариев · Rating 5 out of 5]

Поредната отлична книга на тема "инвестиране". Нейният съставителне използвал почти легендарните писма на Уорън Бъфет, писани до акционерите в неговата първата сериозна бизнес-инициатива.
Иначе казано книгата не обхваща всички писма, което по-скоро е предимство, защото можем да се запознаем с начина на мислене на младия и агресивен инвеститор Уорън Бъфет, преди да се превърне в колоса, познат ни днес.
Определено струва да се отдели време на написаното. Човек може да научи много неща.

[Alina Butenko · Rating 5 out of 5]

Джеремі Міллер – доволі відомий не лише в США, а й у світі фахівець з брендингу, про що написав дві книжки. Проте не лише ця бізнес-галузь є сферою його професійних інтересів. Міллер також є інвестиційним аналітиком, тож очевидно, що методи роботи знаменитого американського інвестора Воррена Баффета він вивчав не один рік.

У 1950-х роках молодий Баффет у своїй першій компанії запровадив правило: щороку надсилав партнерам листи. У них повідомляв про результати роботи, ділився роздумами, а також розширював розуміння акціонерами Засадничих Правил, які також створив і впровадив у роботу. Проте згодом на прохання партнерів частота надсилання листів змінилася до одного разу на пів року.

Листи партнерам Баффет регулярно писав упродовж з 1956-го року до 1970-го. Усі ці Засадничі Правила залишаються актуальними для інвесторів і сьогодні.

Джеремі Міллер нівроку потрудився, опрацювавши й систематизувавши всі листи гуру інвестування світового рівня. Отже, ця книжка є ґрунтовним аналізом філософії і принципів роботи Воррена Баффета, який упродовж десятиліть своєї роботи постійно перемагав ринок. І основа його успіху – це консерватизм і внутрішня дисципліна.

Автор стверджує, що багатьом сучасним інвесторам бракує стійкості й дисципліни, а саме цих рис потребує інвестування. А в листах Баффет постійно наголошує на незмінності своїх принципів. Варто залишатися вірними обраному напряму, не втягуватися в модні тенденції, хоч це він і вважав одним з найскладніших в роботі інвестора. Навіть досвідчені фахівці часто на цей гачок потрапляють. Дуже важливо всім, хто працює в цій галузі, вчитися Баффетовому вмінню опановувати емоції в процесі інвестування.

Кожен розділ книжки організований навколо певної теми чи ідеї, викладеної в листах Баффета. Найважливіші, на думку автора, фрагменти листів подані в повному обсязі. Наприкінці розділів завжди є глава «Інвестиція в мудрість». Тут Міллер підсумовує викладене в темі, дає цьому власний аналіз і наголошує, чого саме навчає Воррен Баффет із цієї теми.

Загалом уроки, які містяться в листах, фактично і є послідовним набором дуже ефективних принципів і методів роботи. Книжку можна читати як підручник з інвестування для початківців. Ці принципи й методи забезпечують формування базового підходу на основі здорового глузду. Тобто, формують ідеологію.

Ідеологічний принцип Баффета: ринок може бути й буває цілком божевільним та ірраціональним у короткочасній перспективі. Але в далекій перспективі він встановлює вартість цінних паперів відповідно до притаманної їм реальної внутрішньої цінності.

Цей фундаментальний принцип формулював ще Бенджамін Ґрема, що був свого часу для Баффета не лише вчителем, але кумиром і роботодавцем. Коли після навчання молодий Баффет заснував власну інвестиційну компанію, то структурував і керував нею за ринковими принципами Ґрема:

«Містер Ринок» – образ того, як формується неефективний ринок: наче примхливий, маніакально-депресивний хлопець, щодня готовий купити чи продати вам половину акцій свого бізнесу. Тож на ринок варто дивитися через призму цієї алегорії.
Коли ви володієте акціями, ви володієте бізнесом.
Ринкові ворожіння. Тобто зміни настою ринку можуть бути випадковими й це робить їх часто непередбачуваними.
Передбачувані спади. Тобто ринок час від часу неминуче падає і поринає в похмурий настрій. І зазвичай дуже мало можна зробити, щоб не потрапити під низхідні потоки.
Частину першу можна назвати загальною, вступною. Тут автор пояснює загальні принципи інвестування, у чому важливість складних відсотків і чому їм треба приділяти увагу. А також викладене головне про індексування ринку й про правила партнерства Баффета.

Друга частина книжки присвячена серцю інвестицій – активам. На реальних прикладах з діяльності Воррена Баффета пояснює все про загальні, регуляційні й контрольовані активи, а також про їх перетворення.

І третя, завершальна частина книжки, зосереджена на інших важливих аспектах роботи інвестора:

як уникнути поширених помилок в інвестуванні;
як подолати схильність надто перейматися податками;
як набути навичок оцінювати вплив масштабу на результативність та інше.
Епілогом до книжки автор обрав період переходу Баффета на вищий рівень – від Партнерства до корпорації, коли 1970 року він обійняв посаду голови й генерального директора холдингової компанії Berkshire Hathaway. Це був період великого нового початку й значного розвитку.

Повний огляд тут: https://mind.ua/publications/20250641...

[Seavmeng Hun · Rating 4 out of 5]

A good starting point for those who are interested in finding out more about Buffett. This book refers to a lot of the BPL letter and groups them together for readers to easily digest the content. A lot of key takeaway for those who are new into the investment field, and a good reminders for those who are familiar with the topic.

[Utkarsh Modi · Rating 4 out of 5]

Book # 15: Warren Buffet's Ground Rules is a collection of semi annual letters by Buffet to his partners at BPL between 1956 to 1970 summarising the past performance, reiterating the firm's values, his interpretation and almost seminal understanding of the market behaviour keeping it very simple in what are famously referred to as Buffet's 7 Ground Rules on investing. Miller further analyses and provides context for each of these letters and how Buffet still managed to outdo the market be it in the bulls or bears. This book is a dedication to Buffet's control, discipline, steadfastness (with no knee jerk reactions at all) and a firm belief in his understanding of the market which is heavily influenced by Benjamin Graham (his teacher (Intelligent Investor)). My favourite parts of the book are when Buffet jokes about fiscal frugality and other subjects comparing some historical scenarios to drive home his points (What if instead of buying Mona Lisa, the investor would have kept his money at 6% - he would have more wealth than 3000 times the national debt! - He is quick to point out though that one of his ground rules is to also live a long life to reap in the benefits of his investments :P) The book is not just a read for investors but also a treatise on how to engage with your firm and partners. A good read.

#52BooksIn2018 #37ToGo

[Zach · Rating 4 out of 5]

When I picked up this book, I didn’t realize it focused exclusively on Warren Buffett’s early investment partnership years. Only upon reading did I discover that it spans from his first partnerships in 1956 until he closed the Buffett Partnership Ltd. in 1970, covering the foundation of his career before he took over Berkshire Hathaway. I ended up learning a great deal from this deep dive into Buffett’s formative years as an investor.

𝐁𝐮𝐟𝐟𝐞𝐭𝐭’𝐬 𝐈𝐧𝐭𝐞𝐠𝐫𝐢𝐭𝐲 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐒𝐭𝐚𝐫𝐭
One striking theme is Warren Buffett’s integrity and honest communication, evident right from the beginning. The book compiles Buffett’s personal letters to his investment partners, which are remarkably candid and even confessional—he readily admits his mistakes and shares his frank thoughts in a humble, often humorous tone. Such transparency built trust with his partners and reflects a moral consistency that remains a hallmark of Buffett even today. He also ensured his interests were aligned with his partners’: Buffett even promised that his wife, children, and he would have “virtually [their] entire net worth invested in the partnership” alongside his investors. This level of fairness and alignment, rare in the investment world, underscores the deep integrity that guided Buffett’s decisions from day one.

𝐐𝐮𝐚𝐧𝐭𝐢𝐭𝐚𝐭𝐢𝐯𝐞 𝐯𝐬. 𝐐𝐮𝐚𝐥𝐢𝐭𝐚𝐭𝐢𝐯𝐞 – 𝐀 𝐊𝐞𝐲 𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐈𝐧𝐬𝐢𝐠𝐡𝐭
As a protégé of Benjamin Graham, young Buffett primarily hunted for bargains using quantitative metrics—buying stocks that were statistically cheap relative to their intrinsic value. However, the biggest insight I gained from Warren Buffett’s Ground Rules is how Buffett evolved to also appreciate qualitative factors in a business. In fact, Buffett himself wrote in a 1967 letter that “the really big money tends to be made by investors who are right on qualitative decisions but… the more sure money tends to be made on the obvious quantitative decisions.” In other words, his bread-and-butter strategy was crunching numbers to find undervalued stocks, but his home-run investments came from judging a business’s quality beyond the numbers.

The book illustrates this crucial lesson through case studies of Buffett’s investments. Everyone remembers American Express as a formative example—in the mid-1960s, after the infamous “Salad Oil Scandal,” Buffett purchased a large stake in American Express based not on its balance-sheet metrics, but on his conviction in the company’s trusted brand and long-term prospects. This was one of the first times Buffett favored a qualitative insight (the enduring value of American Express’s reputation and business model) over a pure quantitative bargain. That bet paid off enormously: as the crisis subsided, American Express’s stock recovered and eventually grew to about 40 % of Buffett’s partnership portfolio, making it one of his most lucrative investments. This taught me that while Buffett never abandoned his classic value discipline, he was willing to go beyond the numbers when a qualitative factor—like a strong brand, capable management, or unique competitive advantage—tipped the scales in favor of an investment.

𝐂𝐡𝐫𝐨𝐧𝐨𝐥𝐨𝐠𝐢𝐜𝐚𝐥 𝐉𝐨𝐮𝐫𝐧𝐞𝐲 𝐚𝐧𝐝 𝐖𝐫𝐢𝐭𝐢𝐧𝐠 𝐒𝐭𝐲𝐥𝐞
Another aspect I appreciated was the book’s chronological narrative. Warren Buffett’s Ground Rules follows Buffett’s journey year by year through his partnership letters, which makes it easy to see how his thinking and strategy evolved over time. Starting from the 1956 letter (when Buffett was just 26) and moving through the 1960s, the book lets us witness Buffett’s growth as an investor in real time. Jeremy Miller—the author who compiled and commented on the letters—provides helpful context around each period, but he mostly lets Buffett’s own words tell the story.

This chronological approach made the lessons sink in deeper for me, because I could track the progression of Buffett’s ideas and the outcomes of his decisions in sequence. By the end, when Buffett decides to wind down the partnership in 1969, you feel like you’ve accompanied him through a full learning arc, from humble beginnings to unprecedented success, all in a very down-to-earth, chronological storyline. I really enjoyed that clear, time-ordered structure—it felt a bit like reading a memoir of Buffett’s early career, filled with investing wisdom along the way.

𝐊𝐞𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬 𝐚𝐧𝐝 𝐅𝐢𝐧𝐚𝐥 𝐓𝐡𝐨𝐮𝐠𝐡𝐭𝐬
Overall, Warren Buffett’s Ground Rules turned out to be both an informative investing guide and a character study of Buffett as a young investor. The letters highlight several timeless principles: Buffett’s contrarian but sensible approach to diversification, his almost religious celebration of compound interest, and his preference for being conservative rather than conventional in decision-making. All these ground rules—from valuing substance over hype to protecting against downside risk—remain startlingly relevant for investors today. The biggest lesson I learned was the importance of balancing quantitative analysis with qualitative judgment, and how true investing mastery requires skill in both areas. Equally important, the book reinforced how integrity and discipline have been at the core of Buffett’s philosophy from the start, underpinning every decision he made.

In terms of style, the book (and Buffett’s writing) is very accessible; Buffett’s folksy, straightforward tone means even complex financial ideas are explained in plain language. Jeremy Miller does a great job as editor and guide—he distills Buffett’s insights and adds context where necessary, without ever overshadowing Buffett’s own voice. In fact, Miller’s curation of the letters does “an excellent job of putting the Buffett Partnership letters into context” and draws out lessons that are just as actionable now as they were decades ago. I would highly recommend Warren Buffett’s Ground Rules to anyone interested in investing or in the origins of Buffett’s strategy. It’s a concise yet rich chronicle of how Buffett built his phenomenal track record before Berkshire Hathaway. Reading it left me with a deeper appreciation for Buffett’s early integrity and the evolution of his investing approach. More than just a history lesson, this book offers practical wisdom that you can apply today—which, to me, is the mark of a truly great investment book.

[Louis · Rating 2 out of 5]

This book is supposed to synthesise and summarise Buffett's partnership years, mainly through the letters sent out to partners during that time. And Miller does summarise the main points fairly well. My problem was that he made the point pretty much in the chapter name then spent 20 or 30 pages repeating the same thing in a variety of ways. The latter chapters were a bit better, but I just don't think it was a well thought through book, just read the Buffett letters if you're interested.

[Jay · Rating 3 out of 5]

Even though it's in the title, somehow I didn't realize this book only covers Buffett's letter from before his time at Berkshire. All good stuff here, but the first 2/3 wasn't as interesting as the last 1/3.

[Zhong Sheng · Rating 2 out of 5]

It is better to read the original letter from 1957 -1970 than this interpretation of the author

[Ihor Horovyi · Rating 3 out of 5]

Книга про акціонерні партнерства і їх ефективність. Дуже далека від реалій де ми знаходимось.

[Library of · Rating 5 out of 5]

In this book, financial analyst Jeremy Miller summarizes Warren Buffett’s letters to his partners in Buffett Partnership Ltd. (BPL). The letters were written during the 1950s and 1960s and were before the Berkshire Hathaway era. It was the time in Buffett’s career when he managed the least amount of capital and was able to use all the tools he learned from Benjamin Graham.

CRUSHED THE MARKET DURING 13 YEARS. Buffett started BPL in 1956 with $105k from family and friends. He was then 25 years old and the company was managed from a room in the house on Farnam Street in Omaha. The portfolio consisted of three types of investments; Generals (mainly “cigar butts” – low-value companies that often-had problems with profitability), Work-outs (arbitrage) and Control situations (activist positions in “cigar buts”). For 13 years, BPL’s annual return was 25% after fees, compared to the Dow’s (index) 9%. When Buffett shut down BPL in 1969, assets under management amounted to $100m and Buffett was good for $26m.

IF YOU ARE SMALL, STAY FULLY INVESTED. Large funds cannot invest in micro-companies no matter how attractive the valuations are – there are simply not enough stocks on the market. Managers with little capital can invest in almost any company, regardless of size, and should take advantage of it. When Buffett invested in Dempster Mill and Sanborn Maps, they had market capitalization of $ 13m and $ 38m, respectively, in 2014 money value – small enough to be classified as microcaps today.

”If I was running $1m, or $10m for that matter, I’d be fully invested. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts back then. It’s a huge structural advantage not to have a lot of money.”

CAPITAL MANAGEMENT IS A RELATIVE GAME. Buffett saw Dow as his opponent and his main task was to deliver a higher return to his partners. Absolute return was irrelevant to him. If the index was up 30% and the partnership up 25%, he was dissatisfied. If the index was down 20% and the partnership down 10%, he was satisfied.

“The Dow as an investment competitor is no pushover and the great bulk of investment funds in the country are going to have difficulty in bettering, or perhaps even matching, its performance.”

AT LEAST THREE BUT PREFERABLE FIVE YEARS. If you want to overperform over time, you must be prepared to underperform in the short term. But if you have underperformed for five years or more, you should consider whether it might be time to change strategy or simply invest in an index fund. However, the later stages of a “bull market” are an exception, then value investors should expect to underperform the market.

FOCUS ON WHAT CAN HAPPEN, NOT WHEN. The market will inevitably crash from time to time and when it does, it will take all the shares with it in the case – growth shares as value shares. Buffett never had a view on whether the market was overvalued or undervalued. He invested in individual companies and focused on their values, future and potential. The accuracy of the analysis determined whether he was right. The market’s longer ups and downs cycles decided when he got it right.

EVERYONE IS A CAPITAL ALLOCATOR. There is no difference between a fund manager and a CEO – both are capital allocators. The manager controls the fund’s capital and the CEO the business’s assets. When Buffett took control of “Generals”, he often converted capital previously used in a low-yielding business (inventories and receivables) into capital that could be used in a high-yielding business (securities). A CEO should see all investment capital as variable and place it where the return potential is greatest.

FIVE WAYS TO INCREASE THE VALUE OF A COMPANY. Operationally, a company’s value can be increased by (1) increasing sales, (2) reducing costs as a share of sales and (3) reducing the asset base as a share of sales. In addition, (4) increased borrowing and / or (5) lower taxation may increase a company’s value.

NEVER COUNT ON A GOOD SALE. By buying assets at a discounted price, we do not have to rely on a strong stock market to get a good return. The cornerstone of value investing is to make the purchase price so attractive that even a mediocre sale gives a good result.

READY TO BUY THE LAST SHARE. “Generals” often became “Control situations” if the low valuation remained for a long time. If the price was attractive, Buffett continued to buy as long as there were sellers. Since he was then one of the major shareholders, he took an active role in the company. Through this, the partnership could get a revaluation either by the market buying the share or by Buffett being given the opportunity to buy a large enough position to be a “catalyst” and realize the values.

This post can also be read here: https://libraryof.xyz/portfolio/warre...

[Edwin Setiadi · Rating 4 out of 5]

The early investing principles of Warren Buffett

It's chaos all over the world. Trump's liberation day tariff 2 April 2025 sent a shockwave to the global market, and the trade war that it instigates could possibly cause a global recession after the market crashes subside.

During this mayhem, in the list of 10 of the richest people in the world 9 of them lost a significant amount of money (all in the billions). That is, except for 1 person. Warren Buffett. And so I thought, there's probably no better time to revisit the wisdom of the Oracle of Omaha than now.

Just like any other finance geeks, I've read my fair share of books about Buffett, from the cartoon biography by Ayano Morio, to "Tap Dancing to Work", "the Tao of Warren Buffett", "The Winning Investment Habits of Warren Buffett & George Soros", the brilliant "University of Berkshire Hathaway" about the content of plenty of Berkshire's shareholders' meeting, not to mention the many generic investment books that mentions about Buffett's style, such as "Money Masters of Our Time", or a bit of cameo in "Tao of Charlie Munger" and "Poor Charlie's Almanack", or gaining his insights from the books that he reads, like, of course, "The Intelligent Investor" by his mentor Benjamin Graham.

But never have I read a book about Buffett's pre-Berkshire days. This is the strength of this book that sets it apart from the rest of the pack. In the sea of books, podcasts, videos, etc about Warren Buffett, this book is probably the only one that dived deep into Buffett's early investment career, when he formed Buffett Associates, Ltd (1956-1970).

It covers the earliest investment thinkings of Buffett, fresh from graduation and mentorship with Benjamin Graham, through his Partnership Letters where he poured everything down and explain them all to his fund's investors. It shows the thinking behind a young investor's mind, working with a modest sum of money not unlike the most of us, but can still somehow generate a substantial amount of returns.

As the author Jeremy C. Miller remarks, "[The Partnership Letters] make a powerful argument for a long-term value-oriented strategy, one that is especially viable in turbulent times such as our own, when people are vulnerable to a speculative, oftentimes leveraged, short-term focus that is rarely effective in the long run. They provide timeless principles of conservatism and discipline that have been the cornerstone of Buffett’s success."

The book is organized around several different topics, in which it extracts Buffett's take on them in the Partnership Letters, reorganize them into the appropriate chapters, and then add a summarizing introduction at each chapter's beginning, followed by the most important excerpts on each topic that was presented in full, which allows us the reader to learn directly from Buffett's words.

The topics covered include: compounding, passing investing (or market indexing), active investing, on incentives, his switch from net-nets cigar puff strategy ("buying fair businesses at wonderful prices") to "buying wonderful businesses at fair prices", arbitrage, control over companies, coattailing, how to avoid common mistakes in investing, taxes, on managing growth, and so much more; all with the real-life examples from what Buffett did during his early investment years.

Buffett never published a book. But instead, so many books are written about him and his investment style, using the letters and articles that he has written, as well his many speeches and talks. And this Partnership Letters from his earliest days of investing shed an interesting light into his way of thinking, which makes this book a very important puzzle piece to read and understand Warren Buffett.

[Ivo Fernandes · Rating 4 out of 5]

This masterpiece depicts the genius of Warren Buffett, how he came from someone just interested in stock market, and willing to work to Benjamin Graham with no salary, just for the knowledge sake, to become the founder of one of the biggest companies on the stock market and even becoming one of the richest billionaires in the world.

I think everything comes down to the evaluation of performance, Buffett likes to compare himself with the "do nothing approach" that consists in just following the Dow Jones Index, so each decision, each stock, each investment idea, and each asset manager of his company, should do better than the Dow in some long term timeframe sometimes referred as 3 to 5 years. So he have been able the detach himself from all the conventional "wisdom" on market and approach it in a very practical an measurable way, instead of "you should have 20% stocks, 20% funds, 60% bonds, bla bla bla" approach. And now he is not only one of the richest mans in the world as he created a company that is following a great formula that has everything to outlive him for many decades.

Then you need to have a stable foundation, to be able to invest in the stock market 3 to 5 years before evaluate yourself, everybody should start slow, investing and compounding slowly, Warren learnt value investing from Benjamin Graham "Intelligent investor" book and used net margins, and return on assets/equity to invest in businesses with big barriers to entry, the so called "moats", the moats strategy beaten the value investing because can be more passive, you just buy to hold really long term, ideally forever, and pay no taxes until you sell.

The idea of being conservative on evaluation instead of just conventional is amazing. Is like being very humble against data, but not too humble against humans, all humans can fail and teachers, analysts, brokers and all the "lords of the truth" of the stock market are no exception. To overperform the stock market more than 10% above the SP500 index each year on average and doing 20% a year on average since 1960, proving to be a master by results and not theory, the master Warren Buffet needed the courage to be himself, and sometimes underperform on crazy times when everybody else is bragging about how easy is to getting rich, to then have the capital to do great buys and overperform the market on crashes and corrections.

Like the Intelligent investor this book is a great piece of wisdom, not the perfectly written, not incredibly pleasant to follow, but great content, is full of great ideas. Full of great ideas, also loved the topic of the bonds, the idea that the yeld curve inverts because the biggest investment market, the bond market, have smart money that is buying long term bonds because expect the yelds to go down in the future is amazing, and an example of how Warren Buffett can get the big picture in investments

[Chris Esposo · Rating 4 out of 5]

Insightful book into Buffett's thinking prior to his partnership with Munger in Berkshire Hathaway. During this time Buffett ran the Buffett Partnership Limited, as it's principal, and earned an average of 20-30% per annum on his fund, which was a spectacular performance, even during what came to be known as the "30 Glorious Years".

The structure of the book is to provide a preface to each of Buffett's letters to his shareholders during this time, breaking down the notes into snippets, and extending the quoted snips with historical context and deeper analysis/explanations. This is accomplished mostly through a gentle introduction to Ben Graham's (Buffett's mentor) concepts of investing.

What makes this book a nice bridge for those who are interested in the history of ideas in applied finance, is that it charts Buffett's evolution in thinking from the Graham "cigar butt" philosophy of investing in penny stocks, taking the last "free puff" as Graham called it, to his more nuanced strategy of searching for "deep value" from securities through discovery of superior management staff of those firms. The book outlines Graham/Buffett asset accounting decision-criterions for investment, which I think is the current market price of stock multiplied by total shares over the total recoverable capital from liquidation. Buffett and his partners were trailblazers in this sort of accounting, utilizing these ratios and metrics many years before P/E was a common column in any analyst's sheets.

This book is probably best read after reading something like Snowball, the biography on Buffett and/or Graham's "Security Analysis". Although I have yet to read the later. Conditional recommend depending on where one is at in their investing training.

[Иван Зубофф · Rating 3 out of 5]

Содержание -- 5 с минусом, форма -- 4 с большим минусом.

В этой книге описывается, вероятно, самый интересный для нас с вами период жизни легендарного инвестора Уоррена Баффетта -- вторая половина 50-х и 60-е. Почему? Потому что тогда он уже инвестировал, но ещё не был мультимиллиардером (а часть времени не был даже миллионером). На первый взгляд, это неважная деталь, но книга убедительно свидетельствует об обратном.

Издание имеет своеобразную структуру. Каждая глава посвящена определённому вопросу -- налогообложение, "высокодоходные" фонды против консервативных и так далее. Глава состоит из развёрнутого предисловия Джереми Миллера, где он пересказывает (с цитатами) точку зрения Баффетта на данный вопрос и описывает, как это проявлялось в его деятельности в указанный период. Затем приводятся очень подробные цитаты на эту тему из писем Баффетта к партнёрам. В результате получается, что сначала у нас есть пересказ с цитатами и пояснениями, а потом подробные цитаты, причём иногда по ходу всей книги цитаты приводятся не два, а аж три-четыре раза. Вообще, процент дублирования в тексте высок, но речь же идёт об основопологающих принципах, так что наверное это в целом простительно. И всё равно подраздражает.

Главы неравномерны по сложности. Первые несколько были совсем уж простыми, потом было пару довольно жёстких (особенно про контролирующие акции), но в среднем уровень нормальный, всё как доктор прописал.

Что касается содержания, оно первосортное. Тема (ещё раз подчеркну, что вопреки названию речь идёт только про раннего Баффетта!) раскрывается во всей её полноте и с твёрдой опорой на источники. Текст живой, понятный. Очень рад, что наткнулся на это издание и одолел его.

[Liam Polkinghorne · Rating 5 out of 5]

Summarises the letters of the early Buffett Partnerships in the pre-Berkshire days by topic. This book, along with The Essays of Warren Buffett, which summarise the Berkshire annual reports by topic, are the only two investment books one would ever need. Highlights Buffett's evolution from focusing on cheap cigar butts to a more qualitative approach as opportunities evaporated over the years of the partnership, as a result of (among other things) the 'lack of an economic convulsion such as the depression to create a negative bias towards equities'. "The really sensational ideas I have had over the years have been heavily weighted toward the qualitative side where I had a 'high probability insight'. This is what causes the cash register to really sing. However, it is an infrequent occurrence, as insights usually are, and of course no insight is required on the quantitative side - the figures should hit you over the head with a baseball bat. So the really big money tends to be made by investors who are right on qualitative decisions, but, at least in my opinion, the more sure money tends to be made on the obvious quantitative decisions." "Our business is based on making excellent purchases, not making extraordinary sales." On winding up the partnership: I will not abandon a previous approach whose logic I understand even though it may mean foregoing large and apparently easy profits to embrace an approach which I don't fully understand, doesn't fully satisfy my intellect, I have not practised successfully and, which possibly, could lead to substantial permanent loss of capital. Re-emphasises the weight Buffett places on integrity above all else.

[FlyingBulgarian Svetli H. · Rating 4 out of 5]

Disclaimer: as a rookie in this field, I didn’t know that the partnership years were only until 1969. Even though the author draws inspiration from letters written by Buffett to his partners, and has tried to make them accessible and relevant with his commentary, none the less the latest letters are dated from almost 50 years ago. This makes me wonder if the relevance isn’t quite the same anymore... the moment something is written it becomes dated I know, but none the less I did expect to see letters by Buffett which were more recent. Oh well, my bad.

The book itself is an easy read and provides beginner investors with insights into Warren Buffett’s mind - from not following the “diversification is key” advice which is dominant today, to how many stocks you should own and how to pick them; reasons why compound interest is great; and why starting now with less is better than not starting to invest at all.

Thank you Jeremy Miller for the lovely book!

[Bryon Brandt · Rating 5 out of 5]

Principles and Methods – While Principles will not change over time, Methods might.

Million Dollar Ideas Are of No Great Benefit to Thousand Dollar Bank Accounts.

Are you within your Circle of Competence?

Mathematically elegant but not very helpful tools.

These were not good businesses. They were Mean Reversion Trades.

Habit Patterns Continuing, Long After They Made Sense.

Without Character, you want someone to be Dumb, and Lazy.

Financial Analysts over 40 know too many things that are No Longer True.

Ben Graham said: In the Long Term the Stock Market is a Weighing Machine.
In the Short Term the Stock Market is a Voting Machine,

I have always found it easier to evaluate Weights dictated by Fundamentals,
than Votes dictated by Psychology. – Warren Buffett

[Mykhailo Sapiton · Rating 3 out of 5]

Honestly, I would rate this book much closer to 4 starts, as it's finely crafted, doesn't overdo its volume and present materials nicely. However, the dry language of mister Miller sometimes feel more like an emulation of Buffet's style, but lack deep insights. He had done a fantastic job accumulating and shortening material nicely, but it doesn't feel this way on the interpretation side. My opinion was also greatly influenced by the recent reading of "Poor Charlie's almanac", which is just a superior piece of writing in terms of explaining value investing without giving you an exact guidance.

Worth your time and a great way to revisit letters.

[Emanuel · Rating 5 out of 5]

Truly great book, concise and coherent presentation of investment thinking and approaches. If you are looking into ideas for investing or explanation of how Buffet was exactly picking his choices, there is very little of that and this is not the book you are looking for. It explicitly states that apart from a couple of companies, he keeps his strategies hidden (which is understandable of course). But the author does a very good job of dwelling in Buffet's mind and exposing his way of thinking and doing business, his moral values and principles.

[djcb · Rating 3 out of 5]

Discusses Buffet's investment philosophy through the lens of his annual letter to his investors. I.e., pre-"get-rich-quick" investment advise grounded in careful analysis and rationalism. This is all decades old wisdom.

I can't judge to what extent it still holds, but I don't think he radically changed his positions, and he's still doing okay...

Interesting read, though got a bit repetitive.

[Marcin Zaremba · Rating 4 out of 5]

Recenzja będzie krótka: zrobiłem sobie kilkanaście notatek, które zakładam że będą stanowić podstawę moich własnych inwestycji - małych i dużych. Pierwsza najważniejsza: nie wrzucaj pieniędzy w tematy, których nie rozumiesz. To że ich nie rozumiesz nie oznacza, że masz je zrozumieć bo mogą być po prostu elementem chwilowej mody. Konserwatyzm inwestycyjny pozwala offsetować emocje.

Polecam dla tych którzy chcą w mądry sposób myśleć o pieniądzach.