Jumia Books The Warren Buffett Way Book by Robert G. Hagstrom

Warren Buffett was influenced by Benjamin Graham, who developed the concept of investing. He believed that a well-chosen portfolio of stocks could be a sound investment, provided that they were reasonably priced and had an underlying safety of principle and return on investment. Investors should look for undervalued securties regardless of overall market price levels.

Buffett’s other big influence was Philip Fisher. Fisher taught Buffett about the importance of investing in companies with a high potential for growth and an above-average management team. He also emphasized the need to invest in firms that could expand their sales and profits over time at rates higher than those of the industry average. Such firms have good profit margins, effective cost analysis, and accounting controls.

Buffett learned to evaluate companies by studying their financial reports, management attributes and the market. He also developed a number of contacts who told him about how the business was doing. Buffett ignored stock market fluctuations and reached his own independent judgment about whether or not it was a good investment. Then he waited for an opportune time to invest in that company.