Inside the Investments of Warren Buffett presents the most detailed analysis to date of Buffett’s long-term investment portfolio. The focus of this book is to uncover answers to these questions by journeying through Buffett’s investing career. Specifically, I look at the twenty investments Buffett made that I feel had the largest material impact on his trajectory. I selected a cross-section of different types of investments and investments I found especially informative. I also considered the relative size of each investment at the time it was made.
Introduction:
Over the last thirty years, Warren Buffett and his investment vehicle Berkshire Hathaway have become household names. Likewise, Omaha, Nebraska is no longer an unknown midwestern town for anyone in the investment community. Buffett’s legendary investing performance has prompted small investors to want to invest just like him and many investment professionals seek to emulate his strategies. But what are Buffett’s greatest investments and in which context did he make them? Moreover, what can we learn from his experience?
My approach in analyzing these key investments was to look at the detailed actions Buffett took when he made his investment decisions and try to understand from a third-party perspective what rationales he or any investor was likely to have seen in each situation. Where appropriate, I tried to take the perspective of an investment analyst studying the businesses at the same time in which Buffett did in order to highlight Buffett’s unique standpoint.
In this way, unlike the many biographical books written about Buffett, this book focuses on telling the story of Buffett only as it relates to his key investments. This book aims to extend beyond the various publications that contain significant information about Buffett’s investments (including Buffett’s own annual letters) by leveraging original source documents and other historical information where possible. My overall aim is to give readers a realistic analysis of the key investments that Buffett made and then have them draw their own insights and conclusions.
The book consists of three sections, ordered chronologically. The first section details five key investments that Buffett made between 1957 and 1968 when he ran Buffett Partnership Limited, the private investment partnership he managed before taking over Berkshire Hathaway. The second section details nine investments Buffett made between 1968 and 1990, the first two decades when Berkshire Hathaway served as his investment vehicle. The third and final section focuses on the period at Berkshire since 1990.
A brief introduction to each section provides a picture of how each investment fits within Buffett’s career as well as setting the broader investment context during that time period of the U.S. stock market, the primary market in which Buffett invested. Individual chapters in each section focus on the specific investments, treating each as a case study. The final section of the book reflects upon the broader evolution of Buffett as an investor. It also summarizes my overall learning from Buffett’s investment philosophy and strategy based on my analysis of his twenty key investments.
Contents:
- 1958: Sanborn Map Company
- 1961: Dempster Mill Manufacturing Company
- 1964: Texas National Petroleum Company
- 1964: American Express
- 1965: Berkshire Hathaway
- 1967: National Indemnity Company
- 1972: See’s Candies
- 1973: The Washington Post
- 1976: GEICO (Government Employees Insurance Company)
- 1977: The Buffalo Evening News
- 1983: Nebraska Furniture Mart
- 1985: Capital Cities/ABC
- 1987: Salomon Inc.—Preferred Stock Investments
- 1988: Coca-Cola
- 1989: US Air Group
- 1990: Wells Fargo
- 1998: General Re
- 1999: MidAmerican Energy Holdings Company
- 2007–2009: Burlington Northern
- 2011: IBM
- Evolution of Buffett’s Investment Strategy
- What We Can Learn from Buffett