Warren Buffet Way

Warren Buffett is the third richest man on earth, estimated to be worth $50B as of 2011, and he made his billions solely through investing. Robert Hagstrom, in the bestseller Warren Buffet Way, explains Buffett's approach called value investing. Buffett does not look at daily or weekly trends, but instead measures the value of a business and buys stock - pieces of a business - when they trade significantly lower than they're actual value.

Before I read this book, I read all of Buffett's letters to the stockholders of Berkeshire Hathaway and my investment decisions have since been influenced by Buffett's methods. I have not yet earned billions, although I really hope I can buy a few great businesses and sit on my ass (search Mungerisms), but I have earned significant returns - 80% in two years - simply by following his advice. Since I was not yet an expert investor, and I did not have the time to study businesses with the diligence required, I simply bought a set amount of shares of a mutual fund every month, and watched my assets grow as the stock market recovered from the 2008 Great Recession.

It was not all smooth sailing as I did not enter the market exactly at the bottom - and Buffett counsels it is foolhardy to try and time the market. I actually lost 25% of my money at one point before riding the rally several months later. Now, I am trying to apply some of what I learned from Buffett and pick my own stocks.

My investing journey has just begun, but I have earned enough money and confidence to go for returns greater than the market. I hope the Warren Buffet Way allows me to sit on my ass soon.