What you will find in this book is what I have found to be difficult to find elsewhere. This book essentially combines the qualitative investment philosophy that Warren talks about a great deal about publicly with the quantitive aspects he rarely talks about directly. And it does a pretty good job of combining these two worlds. In the world of investing, the name Warren Buffett is synonymous with success and prosperity—now you can learn how Warren Buffett did it and how you can, too. Kyle Caldwell: And that rotation into value, which has benefited certain value sectors, such as oil and the miners in particular. If that were to persist for a long time, would you change your approach at all? If you are looking for some ground-breaking Buffett investment revelation in this book, you'll be disappointed. But if you follow Warren Buffett, then you know that very little of his investment philosophy is truly ground-breaking, but that's the point. It's simple, but difficult to apply.

In this case, the ongoing saving is 0.00%, of which 0.00% is paid by loyalty bonus. The tax that could be payable on this loyalty bonus, and therefore the value of this saving to you, is shown below.In a Forbes article, which the book quotes, Charlie Munger summarized Berkshire Hathaway's strategy as follows: And the one that we've got a good opportunity with, at long last, was Fevertree Drinks (LSE:FEVR). And that, you would have thought, should have gone into Buffettology, given the size of it. The reason we put it into Free Spirit and not Buffettology, was that Buffettology already owns Diageo (LSE:DGE), which is its sort of premium-brand business, and it also owns Barr (A G) (LSE:BAG), in a more sort-of general area so, we thought, well, Fever-Tree will go more naturally into Free Spirit. It doesn't have that exposure. So that's why it went in there. But in terms of Buffettology, as I say, the only thing that we've really done is and it's been very limited, is just top up one or two. We haven't put any new names, as they call it, into the portfolio. Keith Ashworth-Lord: Yes, it's a very disciplined process. We start off looking for businesses with an economic moat, which effectively means they've got barriers to entry and they've got pricing power. And the way we go about it is we analyse the growth potential of the companies in their markets, the growth potential of the markets themselves. Warren Buffett does not calculate the intrinsic value and then buys at half that price. Instead, he calculates the Expected Annual Compounding Rate of Return , compares it with other available investments, and buys the best one.

I have to say, Ben Graham had a lot to learn as an investor. His ideas of how to value companies were all shaped by how the Great Crash and the Depression almost destroyed him, and he was always a little afraid of what the market can do. It left him with an aftermath of fear for the rest of his life, and all his methods were designed to keep that at bay. Keith Ashworth-Lord: Very much so. What you were seeing there was a contraction of price-to-earnings (P/E) multiples on the investee companies that we own. And just to prove that point, 23 of our 27 companies in 2022 reported earnings or trading statements that were in line with expectations or even better than expectations. But of those 27 companies, 22 of them finished the year with their share prices down and in some cases down quite a lot. So, I can't stress really too much that the operating performance of the companies is absolutely up to scratch. And it's been purely a market phenomenon. This rotation, so-called rotation into value, which has affected the multiples that the market accords our companies. We keep a very wary eye on margin development because if you're growing you should be improving your margins. And just to give you the measure, I mean the average gross margin in Buffettology is 58%, and the average operating margin is 22%, so well above what the market averages are. Excellent businesses are often industry leaders and tend to have low debt levels, large cash flows, a strong brand name, low maintenance & running costs, high quality products & services, an increasing book value, strong earnings, shareholder-friendly management, and a consumer monopoly. Short-sightedness and the bad news phenomenon. What are these things and what do they have to do with Warren Buffett? The answer is everything.Where Graham, but also the famous Graham-and-Doddsvilleinvestor Walter Schloss, bought cheap companies and lots of them to spread the risk, Buffett prefers a focused portfolio with only a handful of excellent businesses with a competitive advantage and growing value. Owning only great businesses means less diversificationis necessary. We believe all loyalty bonuses are tax-free and we are challenging HMRC's interpretation. However, while we make this challenge we are paying loyalty bonuses within the Vantage Fund & Share Account net of an amount equivalent to the basic rate tax. If we are successful in our challenge we will return this money to clients. If we are unsuccessful we will use the money to pay over any amounts due to HMRC. Learn how to approach investing the way Buffett does, based on the authors' firsthand knowledge of the secrets that have made Buffett the world's second wealthiest man But the book reveals even more tactics which hardly any other book about his strategy seems to cover: the importance of OPM, Other People's Money.