Hagstrom examines the qualities needed to have a money sense, including self-reliance, rationality, pragmatism and continuous learning. The book provides background information on how successful investors have developed these qualities over their lifetime through work and experience.
The writer begins with the importance of learning from the successes and failures of corporations of the past when managing money. This historical study offers invaluable insight into current opportunities. Hagstrom says Warren Buffett has been an avid reader and keen observer since childhood. He was particularly influenced by a book he read at age 11 that analyzed quite a lot of corporations that were founded from scratch.
Although the book offers many insights, a very powerful one for me is how one can operate within the “investment zone.” This becomes possible if you deal with the basics of an organization. I actually have to remind myself that I’m not competing with short-term investors or speculators. I mustn’t be alarmed by the day by day noise of price fluctuations, but hold on to the assumption that the market will eventually value the stock accurately.
The book also offers perspective on recurring investment controversies. For example, investors continually debate the relative merits of growth and value stocks. They also argue endlessly in regards to the discount rate that must be applied to future earnings, a subject that is especially outstanding in a world of low rates of interest.
In addition, Hagstrom offers insights into the lives and work of figures comparable to Benjamin Graham, Bill Miller, William James, and Howard Buffett (Warren’s father). He also delves into the camaraderie between Warren Buffett and Charlie Munger. The writer revisits the book that influenced Warren in 1941 and offers a compendium of books that investors should read.
is a must-read for investment professionals, energetic investors and students pursuing a profession in wealth management. The concepts are clearly explained and well-supported by data. This mustn’t just be read once, but quite function a guide for the remaining of your investment profession.
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