Research project on Warren Buffett

Annotated Bibliography- For the annotated bibliography you should write approximately one paragraph on each source, explaining what the source is, where it is from, and what it contributes to your research

1. Acharya, Viral V., and Lasse Heje Pedersen, 2005, “Asset Pricing with Liquidity Risk,” Journal of Financial Economics 77(2), 375–410

This journal articles comes from the Journal of Financial Economics and discusses many of the value investing principles that have made Warren Buffett one of the worlds greatest investors. The book describes value techniques that Warren Buffett and his partner Charlie Munger have used throughout their careers. This will contribute to my research as it details the elements that have made Warren Buffett popular within the world’s financial communities.

2. Buffett, Mary; Clark, David (1999). Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World's Most Famous Investor. Scribner. ISBN 978-0-684-84821-1

The textbook further describes the valuation process used by Warren Buffett. What makes this book unique is that it also describes many of Buffett failures and how these can be avoided in the future. The book is based heavily on psychology principles and the method in which investors should think about owning businesses. Here, the Buffett describes common misunderstandings from the public regarding investing in public securities markets. This will be contributed to my research by providing further insights into Buffett’s mindset and how he approaches both life and investing.

3. Buffett, Warren; Cunningham, Lawrence (2008). The Essays of Warren Buffett: Lessons for Corporate America, Second Edition. The Cunningham Group. ISBN 978-0-9664461-2-8

The book describes many of the philosophical elements in Warren Buffets thinking. Here, he delves into various aspects including business, corporate stewardship and how his investment approach was created. He also details his early childhood and how it has impacted his life as it relates to philanthropy and giving. This is important to my research as its providers further clarity in to Buffett’s leadership style and how he was able to foster cooperation of over 80 business leaders within Berkshire Hathaway

4. James Rosen (2008). "The Oracle of Omaha". The Washington Post.

This article describes how Warren Buffett earned his nickname as the “Oracle of Omaha.” The article details Buffett’s upbringings in Omaha, Nebraska and how his investment style runs counter to that of Wall Street. The article concludes with investment advice as it relates to the 2008 financial crises and how to better prepare the next inevitable crisis. This article is helpful for my research as it shows how Buffett behaves during period of extreme financial stress and disorder within the capital markets.

5. Hagstrom, Robert G.; Miller, Bill R.; Fisher, Ken (2005). The Warren Buffett Way. Hoboken, N.J.: John Wiley. ISBN 0-471-74367-4

The book details the unique elements of Warren Buffett’s life and how they impacted his wealth and investment philosophy. The book details how his father a stock broker and congressman influenced his decisions to invest. It also details stories related to Benjamin Graham, Warren Buffett’s mentor and how he also influences Buffett’s style of investing. This book is helpful for my research as it provides clarity related to the mentors that helped to shape Buffett’s life, behaviors and thought processes.

6. Lou Hoffman, The Hoffman Agency. "Startup lessons learned from Warren Buffett." April 13, 2010

The book discussing how Buffett began his business and investment career. The explains how one of buffets major failures was in fact purchasing Berkshire Hathaway. The book provides details regarding “Cigar-Butt” investing and how Buffett would purchase extremely cheap stocks to turn a quick profit. The title then details how Buffett slowly transitioned into owning entire businesses for very long periods of time. This source is useful as it details failures of Warren Buffett and how he was able to overcome them.

7. Lowe, Janet (2007). Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor. Wiley. ISBN 978-0-470-15262-1.

The book provides intimate details into the more personal aspects of Warren Buffett and his life. The book also provides readers with advice on life and how to manage through adversity. In these instances, Janet Lowe, seeks to explain how money and material possessions are not the primary concern of Warren Buffett, but rather the love of those he cares about. The book also provides timeless finance advice that can be used to help younger readers save and invest properly. This book is useful as it provides more perspective into Buffett’s personal life outside of simply business and investing.

8. Pysh, Preston (2011). Warren Buffett's Three Favorite Books: A guide to the Intelligent Investor, Security Analysis, and the Wealth of Nations. Pylon Publishing Company. ISBN 978-0-98296-762-1

This book details how Intelligent Investor, Security Analysis, and the Wealth of Nations helped Buffett of solidify his investment philosophy. Many of these books where either written or recommended by mentors of Buffett over the course of his life. The books provide a foundation by which Buffett created his own investment philosophy and later popularized it with the world. This source is useful as provides insights into the actual books that contributed to Warren Buffett’s success.

9. Train, John (1987). The midas touch: the strategies that have made Warren Buffett America's pre-eminent investor. New York: Harper & Row. ISBN 978-0-06-015643-5

This book details the various strategies Warren Buffett uses to value companies. The book provides a guide that much more philosophical based that allows novice practitioners to understand the fundamental concepts of business valuation. The book also details how Buffett himself applied these principles to generate high investment returns over long periods of time. This source is useful as it provides the philosophical context and practical applications of principles Buffett learned throughout his life.

10. Zachary Karabell (2008). "Buffett bio is time well invested". The Los Angeles Times

This article details the overall life of Warren Buffett and how he came to obtain his approach to both life and investing. The article details why following Buffett’s advice towards life can make individuals much happier and live more productive lives. Likewise, the article recognizes that Buffett’s approach, although simple, is not heavily practices by those in society. This source is useful as it provides real world examples of how Warren Buffett has changed the lives of so many individuals around the world.

Short Essay - Choose a sampling of your best sources and explain why those particular sources were the most useful. Use both primary and secondary sources, and turn in photocopies of the title pages with the essay

The sampling of the best sources is below:

1. Buffett, Warren; Cunningham, Lawrence (2008). The Essays of Warren Buffett: Lessons for Corporate America, Second Edition. The Cunningham Group. ISBN 978-0-9664461-2-8

2. Hagstrom, Robert G.; Miller, Bill R.; Fisher, Ken (2005). The Warren Buffett Way. Hoboken, N.J.: John Wiley. ISBN 0-471-74367-4

3. Lowe, Janet (2007). Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor. Wiley. ISBN 978-0-470-15262-1

These sources were the most useful because they provided a holistic approach to Buffett’s philosophy as it relates, life, wealth, and business. All three sources provide a comprehensive basis to better understand Warren Buffett and his thinking. The first source, Essay of Warren Buffett are an amalgamation of his writings, speeches, and shareholders letters. These were all written personally be Buffett and therefore provide the most unfiltered view into his thinking and life. This book, I still find invaluable to my life, and actually change the manner in which I handle my financial affairs. This, along with the Warren Buffett Way, has each changes the lives of countless individuals as it provides timeless advice that is simple to understand. The advice, is also garnered from mentors of Warren Buffett who also had invaluable influence over his upbringings. This too provides insights into how the people who raised Buffett’s ultimately live through his actions. Finally, Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor, provides still further intimate details that are not only enjoyable to read, but also can make an immediate impact on the individuals life. These books show how Buffett not only had a passion for finance, but more importantly, has a passion for people and improving their overall lot in life. As a result, as able to learn about the person, his philosophy, his motivations, and how they all coalesce to make a productive and impactful life.

Photocopies of the Title Pages

1. The Essays of Warren Buffett: Lessons for Corporate America, Second Edition

2. The Warren Buffett Way. Hoboken, N.J.: John Wiley. ISBN 0-471-74367-4

3. Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor

Brief narrative essay - Speaking as your “character,” write a brief essay (2-3 pages) describing some aspect of your character’s experience. This could take the form of a letter to a loved one, a diary entry, or an interrogation session, for example. Note: you must footnote and cite references in this essay.

To the investors of Berkshire Hathaway,

It has been an honor to serve as you chairman and CEO of such a wonderful company over the past 6 decades we have been fortunate enough to compound our intrinsic value at a rate of nearly 20% per year. Over this period, we have encountered multiple recession, a financial crisis, a tech stock bubble, the Nifty Fifty crisis, rapid inflation, a war in Afghanistan, Ebola, Y2J, September 11th, and most recently, the Coronavirus. Through each of these instances, our shareholders have trusted in our ability to be good stewards of capital. We have rewarded the patient investor handsomely as a result, and we hope to continue to do for the next 6 decades.

I would be remis if I didn’t thank our over 80 managers and portfolio company CEO’s for their work over the years. Without them our financial success would not have been possible. They run some of the most vital companies in the world which include our energy business that provides energy services to homes throughout America and powers the businesses and homes in which they work. We own the Burlington Northern railroad which is one of the most critical arteries within the American infrastructure foundation. It transports goods cheaper than any other railroad thus saving the consumers money overtime. Our Geico insurance operations also performed well and still delivers the lowest cost auto insurance product in the market today. All these businesses contribute to the overall whole which is Berkshire Hathaway.

A word on the state of the world. COVID-19 has caused unpresented change within the markets. Consumers are now adopting more only technologies such as Uber, Amazon, and Zoom. Office properties are investing heavily in capital improvements to HVAC systems and other filtration devices to keep people safe. Even companies are grappling with how to return to work and in which manner to do so. As I noted earlier, over our 60 years of existence we have been met with similar challenges before. We have dealt with not one, but two world wars. We have dealt with September 11 terrorist attacks, and other manner of upheaval. Much like the other instances, we, as Americans will overcome it. Our spirit, ingenuity, and resolve are unmatched anywhere in the world. COVID-19 will be defeated, and once it is, America will be stronger for it.

Finally, I would like to address the market mania and speculation that is currently underway in the markets. Simply put, markets are speculated instead of investing. Market participants are now looking at the stock market as a casino as oppose to medium used to purchase economic interests in a business. Cryptocurrency for example, has become a speculative boon that has attracted many retail investors who have no business in market. What is more alarming is that many investors are using credit and borrowed money to make these best on cryptocurrency. As is the case with market bubbles, this will inevitably end badly with retail investors suffering the most. Using borrower’s money to speculate is akin to playing with fire. If the stock or asset goes up, you can win big, but if it goes down, you can lose more than you invested as you lost your initial investment and then need to pay back the borrowed money. We see this to a certain extent in 2008 with consumers taking on loans they shouldn’t have to finance homes they couldn’t afford. Much like the crypto market, people speculated on home prices. Eventually the bubble will collapse and prices will trade at a reasonable range. Until then, it is best to avoid these market inefficiencies and wait to strike when the prices are right.

An obituary for your character of 200-500 words.

Warren Buffett was one of the most well regarding men of our lifetime. A very talented and intellectual soul, Warren influenced the lives of countless individuals through finance and investing. Through smarts, intellect, and will, Buffett started from humble beginnings to become one of the wealthiest men on the planet. He written works are widely followed and adopted by legions of loyal followers. Even more than money, Warren valued his time and gave it willing to millions of followers across the world. His annual meeting attacks tens of thousands of people simple to hear his opinions on life and the markets. Warren was also a great philanthropist, pledging to give 99% of all his wealth back to society in the form of donations to the Bill and Melinda Gates foundation. As we can see, Warren was not only a financial profession, but a teacher. A teacher that has influenced the world for the better. There will never again be a person like Warren and the world will forever miss his presence. Thankfully through Warrens dedication and hard work, his legacy lives on through multiple written works, his business Berkshire Hathaway, and be his three lovely children. Each, are making their own respective impacts on the world much like their father has for 60 years.