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Preface ix<br /> <p>Acknowledgments xv</p> <p><b>Part One Introduction and Background 1<br /></b></p> <p>Chapter 1 The Thrill of Investing in Common Stocks 3</p> <p>Chapter 2 1965–2009: Lessons from Significant Events in Berkshire History 9</p> <p><b>Part Two Buffett Investing = Value + Growth 23<br /></b></p> <p>Chapter 3 Value Investing—It's Like Buying Christmas Cards in January 25</p> <p>Chapter 4 Growth Investing 43</p> <p>Chapter 5 Intrinsic Value 57</p> <p>Chapter 6 Buffett Investing = Value + Growth 69</p> <p><b>Part Three Other People’s Money 87<br /></b></p> <p>Chapter 7 Insurance—Other People’s Money 89</p> <p>Chapter 8 Reinsurance: More of Other People’s Money 99</p> <p>Chapter 9 Tax Deferment: Interest-Free Loans from the Government 109</p> <p><b>Part Four Success in Retailing, Manufacturing, and Utilities 113<br /></b></p> <p>Chapter 10 If You Don’t Know Jewelry, Know Your Jeweler 115</p> <p>Chapter 11 Compete Like Mrs. B 123</p> <p>Chapter 12 Why Invest in Utility Companies? 129</p> <p>Chapter 13 High Profits in Honest-to-Goodness Manufacturing Companies 137</p> <p><b>Part Five Risk, Diversification, and When to Sell 143<br /></b></p> <p>Chapter 14 Risk and Volatility: How to Think Profitably About Them 145</p> <p>Chapter 15 Why Hold Cash: Liquidity Brings Opportunities 155</p> <p>Chapter 16 Diversification: How Many Baskets Should You Hold? 161</p> <p>Chapter 17 When to Sell 169</p> <p><b>Part Six Market Efficiency 175<br /></b></p> <p>Chapter 18 How Efficient Is the Stock Market? 177</p> <p>Chapter 19 Arbitrage and Hedge Funds 185</p> <p><b>Part Seven Profitability and Accounting 193<br /></b></p> <p>Chapter 20 M = Monopoly = Money 195</p> <p>Chapter 21 Who Wins in Highly Competitive Industries? 205</p> <p>Chapter 22 Property, Plant and Equipment: Good or Bad? 211</p> <p>Chapter 23 Key to Success: ROE and Other Ratios 217</p> <p>Chapter 24 Accounting Goodwill: Is It Any Good? 223</p> <p><b>Part Eight Psychology 229<br /></b></p> <p>Chapter 25 How Much Psychology Should You Know? 231</p> <p>Chapter 26 How to Learn from Mistakes 243</p> <p><b>Part Nine Corporate Governance 249<br /></b></p> <p>Chapter 27 Dividends: Do They Make Sense in This Day and Age? 251</p> <p>Chapter 28 Should You Invest in Companies That Repurchase Their Own Shares? 257</p> <p>Chapter 29 Corporate Governance: Employees, Directors, and CEOs 263</p> <p>Chapter 30 Large Shareholders: They Are Your Friends 273</p> <p>Conclusion B = Baseball = Buffett 277</p> <p>Appendix A Summary of the Book 281</p> <p>Notes 283</p> <p>About the Author 295</p> <p>Index 297</p>

<b>PREM C. JAIN</b> is the McDonough Professor of Accounting and Finance at the McDonough School of Business, Georgetown University, in Washington, D.C. He has previously taught at the Wharton School of the University of Pennsylvania and the Freeman School of Business at Tulane University. His research has been published in many prestigious finance and accounting journals including the <i>Journal of Finance</i> and the <i>Journal of Accounting Research.</i> Jain received a doctorate from the University of Florida and a master’s degree in applied economics from the University of Rochester. He is also a CPA in the state of Florida.

“Many books about Warren Buffett describe him as simply a ‘value’ investor. Jain gives us a clearer understanding of the techniques of the man known as ‘the world’s greatest investor’ and shows that his investment principles are consistent with many of the precepts of modern financial theory.”<br /> —<b>BURTON MALKIEL,</b> Professor, Economics Department, Princeton University; author of <i>A Random Walk Down Wall Street</i> and <i>The Elements of Investing</i> <p>“This is required reading for all Buffettologists looking for more than just sound bites and folk wisdom in their quest to peer into the mind of one of the greatest investors of all time. Read this book slowly and savor every page while sipping a Cherry Coke!”<br /> —<b>ANDREW W. LO,</b> Harris & Harris Group Professor, MIT Sloan School of Management</p> <p>“What better way to become a successful investor than to study the teachings of Warren Buffett? And, what better way to study those teachings than to read Buffett’s forty-year writings contained in his annual reports? Prem C. Jain jump-starts those lessons by culling Buffett’s most salient investment secrets and summarizes them in a wonderful and easy-to-read book.”<br /> —<b>HOWARD M. SCHILIT,</b> author of <i>Financial Shenanigans;</i> founder, Financial Shenanigans Detection Group</p> <p>“Post the 2008-2009 financial crisis, everyone from New York to New Delhi is looking for investment advice. The advice has just arrived! Prem C. Jain’s lucid, accessible encapsulation of Buffett’s investment wisdom is a page-turner—it’s full of investment nuggets and entertaining anecdotes, and yet the write-up is faithful to economic theory. Buffett’s investment thesis is now out in the open, and therefore may a thousand Buffetts bloom!”<br /> —<b>S.P. KOTHARI,</b> Managing Director, Blackrock; Gordon Y Billard Professor of Management, Sloan School of Management, Massachusetts Institute of Technology</p>

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