HOW TO THINK LIKE WARREN BUFFETT - womlib.ru

1 HOWTOTHINKLIKEBENJAMINGRAHAMANDINVESTLIK EWARRENBUFFETTThis page intentionally left TO THINK LIKEBENJAMIN GRAHAMAND invest LIKEWARREN BUFFETTL awrenceA. CunninghamMcGraw-HillNew Yor kChicago San FranciscoLisbon London Madrid Mexico CityMilan New Delhi San Juan SeoulSingapore Sydney TorontoCopyright 2001 by the McGraw-Hill Companies,Inc. All rights reserved. Manufactured in the UnitedStates of America. Except as permitted under the United States Copyright Act of 1976, no part of thispublication may be reproduced or distributed in any form or by any means, or stored in a database orretrieval system, without the prior written permission of the publisher.

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4 Your right to use the work may be terminated if youfail to comply with these terms. THE WORK IS PROVIDED AS IS . McGRAW-HILL AND ITS LICENSORS MAKE NO GUAR-ANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OFOR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMA-TION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE,AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUTNOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR APARTICULAR PURPOSE. McGraw-Hill and its licensors do not warrant or guarantee that the func-tions contained in the work will meet your requirements or that its operation will be uninterrupted orerror free.

5 Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inac-curacy, error or omission, regardless of cause, in the work or for any damages resulting has no responsibility for the content of any information accessed through the no circumstances shall McGraw-Hill and/or its licensors be liable for any indirect, incidental,special, punitive, consequential or similar damages that result from the use of or inability to use thework, even if any of them has been advised of the possibility of such damages. This limitation of lia-bility shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tortor : abc McGraw-Hill vCONTENTSA cknowledgements ixIntroduction: The Q Culture xiPAR TI:A TALE OF TWO MARKETS1 Chapter1.

6 Mr. Market s Bipolar Disorder3 Swings, Bubbles, and Crashes / 5Be an Anomaly / 11 Barrel of Monkeys? / 12 Chapter2. Prozac Market17 Obscurity / 17 Simplicity / 18 The Perfec tDream / 22 Tidying Up the Tale / 28 Chapter3. Chaotic Market33 New Wave / 33 Nex tWave / 36 Complexity / 46 Behavioral Finance / 47 Chapter4. Amplified Volatility51 Information Volatility / 51 Transaction Volatility / 59 Trader Volatility / 63 Prognosis / 66 Chapter5. Take the Fifth69 Who s in Charge? / 70 Sticking to Your Knitting / 71 Alchemy / 81 The Long Run / 86 Copyright 2001 The McGraw-Hill Companies, Inc. Click Here for Terms of UseviContentsPAR TII:SHOW ME THE MONEY89 Chapter6.

7 Apple Trees and Experience91 Fools and Wisdom / 91 Horse Sense / 100 Chapter7. Your Circle of Competence105 The Initial Circle / 106 The Nurtured Circle / 109A Full Circle / 114 Decision Making / 116 Chapter8. Recognizing Success119 Business Fuel / 120 Managers under the Microscope / 124 Bang for the Buck / 128 The Full Tool Ches t/ 131 Chapter9. You Make the Call133 Assets / 134 Earnings / 138 Silver Bullets and the Margin of Safety / 142 Cash / 144 Marke tCirculari ty / 146 Chapter10. Making (Up) Numbers153 Perennials / 153 Satire / 157 Charades / 162 Coda / 167 PAR TIII:IN MANAGERS WE TRUST169 Chapter11.

8 Going Global171 The Two-World Story / 172 Illusions of Duty / 176 One World to Come / 180 ContentsviiChapter12. Rules and Trust193 The Family Manager / 193 Local Governance / 195 General Governance / 200 Your Voice a t the Table / 202 Chapter13. Directors at Work205 Hail to the Chief / 206 Pay / 207 Deals / 212 Capital / 215 Checking Up / 217 Chapter14. The Fireside CEO221 Master Servants / 221 Action / 222 Lights / 230 Trus t/ 235 Conclusion: The V Culture 243 Notes 245 Index 257 This page intentionally left main ideas in this boo ktrace their intellectual lineage toBenjamin Graham, whom I never knew but must thank post-humously, and WARREN BUFFETT , whom I have the great fortune toknow and from whose writings, talks, and conversations I havegained knowledge and insight.

9 Neither of these men, of course, hasany responsibility for this book s content and no doubt would disa-gree with some of what it says, though it is written as a narrativeinterpretation of principles they developed, to which it tries to BUFFETT deserves my continuing thanks for permitting me toprepare a collection of his letters to the shareholders of BerkshireHathaway,The Essays of WARREN BUFFETT : Lessons for Corporate Amer-ica, and for participating along with Berkshire Vice-ChairmanCharles Munger in a symposium I organized to analyze it. Thanksalso to the readers of that collection of wonderful writings for en-couraging me to write the present book, especially the courageouscollege and business school professors who use that boo kin theircourses and their many students who tell me how valuable it fans of that boo kwho encouraged me to write this oneinclude my friends at Morgan Stanley Dean Witter, led by DavidDarst and John Snyder; Chris Davis and KimMarie Zamot at DavisSelected Advisers; the team at Edward D.

10 Jones; and supporters toonumerous to mention at other firms who appreciate the businessanalysis way of training and professional habit I am a corporate lawyer, andas my students know, effectiveness as a corporate lawyer requiresmastering not only (or mostly) law but also business, including fi-nance, accounting, and governance. For tutelage in that philosophy,I than kmy friends and former colleagues at Cravath, Swaine &Moore as well as that firm s all law faculties recognize the intersection of law and busi-ness. My colleagues at Cardozo Law School do and support my re-Copyright 2001 The McGraw-Hill Companies, Inc. Click Here for Terms of UsexAcknowledgmentssearch and writing in the fields of finance, accounting, and gover-nance that seem to others a step beyond law as such.