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Finance is a language like any other: the more fluently you speak it, the further--and more comfortably--you travel. And if you want to improve your financial literacy, what better teacher could you have than Warren Buffett? Often described as the greatest investor of all time, Warren Buffett started his investment firm with[...] in the late 1950s and went on to become the billionaire and sage we know today. Along the way he's reaped huge profits for fellow investors in Berkshire Hathaway and remains one of the most sought-after and closely watched figures in the business world.
So how did he do it? In Buffett's Tips, award-winning professor and professional investor John M. Longo demonstrates just how by translating decades of Buffett's writings and media appearances into a 100 straightforward tips and strategies anyone can follow for enhanced financial literacy and independence, including:
* Essential concepts like the time value of money and compound interest
* Basic financial instruments, such as savings and checking accounts and certificates of deposit
* Approaches to valuing stock, including discounted cash flow and relative valuation
* How to build a portfolio in accordance with Buffett's two golden rules
Whether you want to grow your personal finances, develop your business acumen, or improve softer career skills such as emotional intelligence, there's no one better to learn from than the most famous investor in the world--and no better way to do that than having a copy of Buffett's Tips close at hand.
Finance is a language like any other: the more fluently you speak it, the further--and more comfortably--you travel. And if you want to improve your financial literacy, what better teacher could you have than Warren Buffett? Often described as the greatest investor of all time, Warren Buffett started his investment firm with[...] in the late 1950s and went on to become the billionaire and sage we know today. Along the way he's reaped huge profits for fellow investors in Berkshire Hathaway and remains one of the most sought-after and closely watched figures in the business world.
So how did he do it? In Buffett's Tips, award-winning professor and professional investor John M. Longo demonstrates just how by translating decades of Buffett's writings and media appearances into a 100 straightforward tips and strategies anyone can follow for enhanced financial literacy and independence, including:
* Essential concepts like the time value of money and compound interest
* Basic financial instruments, such as savings and checking accounts and certificates of deposit
* Approaches to valuing stock, including discounted cash flow and relative valuation
* How to build a portfolio in accordance with Buffett's two golden rules
Whether you want to grow your personal finances, develop your business acumen, or improve softer career skills such as emotional intelligence, there's no one better to learn from than the most famous investor in the world--and no better way to do that than having a copy of Buffett's Tips close at hand.
JOHN M. LONGO is a Professor of Profes- sional Practice in the Finance and Economics Department at the Business School of Rutgers University. He has also been visiting professor of finance at EMBA-Global Asia?the joint Executive MBA program of Columbia Business School, London Business School, and The University of Hong Kong. He has more than 25 years of professional investment experience and is currently serving as Chief Investment Officer of Beacon Trust, a $3+ billion registered investment advisor. A Chartered Financial Analyst (CFA), Professor Longo earned an MBA in Finance and a PhD in Finance from Rutgers, where he also received his BA degree.
TYLER J. LONGO is a high school student in the Princeton, NJ area. He has completed the Introduction to Business, Finance, and Economics program for high school students at Columbia University and additional coursework in AP Economics, AP Statistics, and Financial Literacy. He has become financially literate in large part due to his work on this book.
Preface xv
Acknowledgments xix
Chapter 1: Who Is Warren Buffett? 1
Introduction 1
Buffett the Teen 2
Who Are We to Write This Book? 3
What Is Financial Literacy and Why Does It Matter? 4
Some Fundamental Buffett "Tips" 5
Buffett's Work Ethic 7
Buffett Has Spent a Lifetime Learning 8
Why Is Buffett Happy? 10
Improve Your Communication Skills and See Your Lifetime Earnings Increase 50% 12
Acting with Integrity Is the Right Thing to Do and Good for Business 13
Buy Low, Sell High 14
Buffett Doesn't Succumb to Peer Pressure: The Inner Scorecard 15
Buffett's Fallback Career-Comedian 17
Buffett's Lasting Legacy: Philanthropy 18
Buffett's Tips from Chapter 1 19
References 20
Chapter 2: Investment Fundamentals According to Buffett 23
Introduction 23
The "Miracle of Compound Interest" Explained 24
Trade-Offs: A Fundamental Principle of Life 27
The Saint Petersburg Paradox: A Lesson on Risk and Return 29
Risk and Return: The Evidence 30
Diversification: One of the Few Free Lunches in Life 32
Supply and Demand Determine Price 33
Summary on Financial Fundamentals 35
Buffett's Tips from Chapter 2 36
References 36
Chapter 3: Bank Accounts, Debit Cards, Credit Cards, and Your Credit Score 38
Introduction 38
Insured Bank Deposits 38
Savings Accounts and Certificates of Deposit (CD) 40
Checking Accounts and Electronic Bill Payment 42
Parts of a Check 43
Balancing a Checkbook 44
Debit Cards and Automated Teller Machines (ATM) 45
Credit Cards and Charge Cards 46
Apps to Send Money: PayPal, Venmo, Zelle, Apple Pay, Android Pay, and so forth 49
Your Credit Score: A Report Card of Your Financial Responsibility 50
Personal Bankruptcy: Try to Avoid at all Costs 52
A Word on Bitcoin from Buffett 53
Buffett's Tips from Chapter 3 56
References 56
Chapter 4: Bonds and Inflation 58
Introduction 58
US Savings Bonds 59
Other US Treasury Fixed Income Securities 60
Inflation and the Consumer Price Index (CPI) 62
Bond Ratings and Corporate Bankruptcy 63
Corporate Bonds, Municipal Bonds, and Bowie Bonds 65
Bowie Bonds and Other Asset-Backed Securities 66
The Federal Reserve: The Central Bank of the United States 67
What Determines Interest Rates? 69
Intuition on Estimating the Price of a Bond 70
So Are Bonds Good Investments? 72
A Note on Negative Bond Yields 73
Appendix: Bond Valuation 74
Buffett's Tips from Chapter 4 75
References 75
Chapter 5: Stock Market Fundamentals 77
Introduction 77
Initial Public Offerings (IPOs): The Birth of a Stock 78
Investment Banks and Investment Bankers 78
The Main Event: The Stock Begins Trading on the Exchange 80
The Stock Exchange 81
A Sidebar on Stock and Mutual Fund Symbols 83
Dividends 84
Large Cap vs. Small Cap 87
Growth vs. Value 88
Domestic vs. International 90
An Index Fund: A Great "Set It and Forget It" Long-Run Investment 91
Beating the Market and the Efficient Market Hypothesis 92
Meet Mr. Market, the Manic-Depressive Stock Market 94
Buffett's Tips from Chapter 5 96
Appendix: Selling Short (or the "Don't Try This at Home" Area of Investing) 96
References 98
Chapter 6: Buffett's Approach to Stocks 100
Introduction 100
Estimating the Value of a Stock 101
Getting a Price Target with the Discounted Cash Flow Model 101
Getting a Price Target with the Wall Street P/E Model 103
Buffett's Approach to Stocks 105
Getting into the Buffett Mindset on Investing 105
Stay within Your Circle of Competence 106
The Importance of Being Patient 107
Good vs. Bad Companies and the Passage of Time 107
How Buffett Thinks About Change in an Industry 109
Types of Businesses Buffett Likes 110
Demonstrated Consistent Earnings Power 111
Look for Companies with Good Management 112
Buy Companies That Have the Power to Overcome Inflation 113
Focus on Firms with Favorable Long-Term Prospects 115
When to Sell 117
Summarizing Buffett's Approach 118
Buffett's Tips from Chapter 6 119
References 120
Chapter 7: Accounting Fundamentals: The Report Card for Businesses 122
Introduction 122
The Income Statement: A Company's Report Card for One Period 124
Apple's Income Statement 125
The Balance Sheet: A Picture of a Company's Report Card Since Inception 129
Current Assets 131
Long-Term Assets 132
Liabilities 134
Current Liabilities 134
Long-Term Liabilities 134
Stockholders' Equity 135
A Quick Note on the Statement of Cash Flows 137
Summary 138
Buffett's Tips from Chapter 7 139
References 139
Chapter 8: Buffett's Approach to Portfolio and Risk Management 141
Introduction 141
The Key to Selecting a Well-Diversified Portfolio: Correlation 142
A (Theoretical) Portfolio with No Risk 143
Selecting an Optimal Diversified Portfolio: The "Business School" Approach 144
Buffett's First Approach to Portfolio Selection: Index Funds 147
Buffett's Second Approach to Portfolio Selection: Expert Mode 147
A Compromise Solution to Portfolio Selection 149
How Many Stocks Make a Diversified Portfolio? 150
The "Business School" Approach to Risk 151
Buffett's Critique of the Business School Approach to Risk 153
Buffett's Approach to Risk 154
Buffett on Gold 155
Summarizing Buffett's Views on Risk 157
Endnote on CAPM 157
Buffett's Tips from Chapter 8 158
References 158
Chapter 9: Business 101: Companies You Should Know 160
Introduction 160
The Dow Jones Industrial Average: The Oldest Diversified US Stock Market Index 161
How the Dow Is Calculated 162
An Explanation of Stock Splits 164
Different Share Classes and Buffett on Stock Splits 166
Current Stocks in the Dow Jones Industrial Average 167
Materials Stocks in the Dow 168
Chevron (NYSE: CVX) 168
Dow Chemical (NYSE: DOW) 168
Consumer and Business Services Stocks in the Dow 169
Home Depot (NYSE: HD) 169
McDonald's (NYSE: MCD) 169
Walmart (NYSE: WMT) 170
Consumer Goods Stocks in the Dow 170
Apple (NASDAQ: AAPL) 171
Coca-Cola (NYSE: KO) 171
Nike (NYSE: NKE) 172
Procter & Gamble (NYSE: PG) 173
Walgreens Boots Alliance (NASDAQ: WBA) 173
Walt Disney (NYSE: DIS) 173
Financial Stocks in the Dow 173
American Express (NYSE: AXP) 174
Goldman Sachs (NYSE: GS) 174
JPMorgan Chase & Co. (NYSE: JPM) 174
Travelers (NYSE: TRV) 175
Visa (NYSE: V) 175
Health Care Stocks in the Dow 175
Amgen (NASDAQ: AMGN) 175
Johnson & Johnson (NYSE: JNJ) 176
Merck & Co. (NYSE: MRK) 176
UnitedHealth Group (NYSE: UNH) 176
Industrial Goods Stocks in the Dow 177
Boeing (NYSE: BA) 177
Caterpillar (NYSE: CAT) 177
Honeywell (NYSE: HON) 177
3M Company (NYSE: MMM) 178
Technology Stocks in the Dow 178
Intel (NASDAQ: INTC) 178
International Business Machines (NYSE: IBM) 179
Microsoft (NASDAQ: MSFT) 179
[...] (NASDAQ: CRM) 180
Telecommunications Services Stocks in the Dow 180
Cisco Systems (NASDAQ: CSCO) 180
Verizon (NYSE: VZ) 181
Some Blue-Chip US Stocks That Aren't in the Dow 181
The FANG Stocks-They Don't Bite 181
China's Emerging Titans 183
Some International Energy Titans 183
Some Global Consumer Titans 184
Some Global Financial Service Firms 185
Buffett's Tips from Chapter 9 185
References 186
Chapter 10: Business 101-Past and Present Business Leaders, or Who's Who in Business 187
Introduction 187
Past Business Leaders 188
Rose Blumkin (Mrs. B) 188
Andrew Carnegie 189
Walt Disney 189
Thomas Edison and Jack Welch 189
Henry Ford 190
Katharine Graham 190
William Randolph Hearst 190
Steve Jobs 191
Ingvar Kamprad 191
Ray Kroc 192
Estee Lauder 192
J.P. Morgan 192
John D. Rockefeller 193
Cornelius Vanderbilt 194
Sam Walton 194
Thomas Watson Jr. 195
Present Business Leaders 195
Bernard Arnault 196
Mary Barra 196
Jeff Bezos 197
Richard Branson 198
Michael Bloomberg 198
Sergey Brin, Larry Page, and Sundar Pichai 199
Shawn Carter, Beyoncé Knowles, Sean Combs, and Andre Young 200
Tim Cook 200
Jamie Dimon 201
Jack Dorsey 201
Bill Gates, Paul Allen, and Steve Ballmer 201
Reed Hastings 202
Kylie Jenner and Robyn Fenty 202
Phil Knight 203
Jack Ma, Pony Ma, and Robin li 203
Rupert Murdoch 203
Elon Musk 204
Amancio Ortega 204
Howard Schultz 204
Oprah Winfrey 205
Mark Zuckerberg and Sheryl Sandberg 205
Buffett's Tips from Chapter 10 206
References 206
Chapter 11: Being Thrifty like Buffett: Ways to Save Money 208
Introduction 208
Your Library: Free Books,...
Erscheinungsjahr: | 2021 |
---|---|
Fachbereich: | Betriebswirtschaft |
Genre: | Importe, Wirtschaft |
Rubrik: | Recht & Wirtschaft |
Medium: | Buch |
Inhalt: | 432 S. |
ISBN-13: | 9781119763918 |
ISBN-10: | 1119763916 |
Sprache: | Englisch |
Einband: | Gebunden |
Autor: |
Longo, John M.
Longo, Tyler J. |
Hersteller: | John Wiley & Sons Inc |
Verantwortliche Person für die EU: | Wiley-VCH GmbH, Boschstr. 12, D-69469 Weinheim, amartine@wiley-vch.de |
Maße: | 162 x 238 x 30 mm |
Von/Mit: | John M. Longo (u. a.) |
Erscheinungsdatum: | 25.02.2021 |
Gewicht: | 0,808 kg |
JOHN M. LONGO is a Professor of Profes- sional Practice in the Finance and Economics Department at the Business School of Rutgers University. He has also been visiting professor of finance at EMBA-Global Asia?the joint Executive MBA program of Columbia Business School, London Business School, and The University of Hong Kong. He has more than 25 years of professional investment experience and is currently serving as Chief Investment Officer of Beacon Trust, a $3+ billion registered investment advisor. A Chartered Financial Analyst (CFA), Professor Longo earned an MBA in Finance and a PhD in Finance from Rutgers, where he also received his BA degree.
TYLER J. LONGO is a high school student in the Princeton, NJ area. He has completed the Introduction to Business, Finance, and Economics program for high school students at Columbia University and additional coursework in AP Economics, AP Statistics, and Financial Literacy. He has become financially literate in large part due to his work on this book.
Preface xv
Acknowledgments xix
Chapter 1: Who Is Warren Buffett? 1
Introduction 1
Buffett the Teen 2
Who Are We to Write This Book? 3
What Is Financial Literacy and Why Does It Matter? 4
Some Fundamental Buffett "Tips" 5
Buffett's Work Ethic 7
Buffett Has Spent a Lifetime Learning 8
Why Is Buffett Happy? 10
Improve Your Communication Skills and See Your Lifetime Earnings Increase 50% 12
Acting with Integrity Is the Right Thing to Do and Good for Business 13
Buy Low, Sell High 14
Buffett Doesn't Succumb to Peer Pressure: The Inner Scorecard 15
Buffett's Fallback Career-Comedian 17
Buffett's Lasting Legacy: Philanthropy 18
Buffett's Tips from Chapter 1 19
References 20
Chapter 2: Investment Fundamentals According to Buffett 23
Introduction 23
The "Miracle of Compound Interest" Explained 24
Trade-Offs: A Fundamental Principle of Life 27
The Saint Petersburg Paradox: A Lesson on Risk and Return 29
Risk and Return: The Evidence 30
Diversification: One of the Few Free Lunches in Life 32
Supply and Demand Determine Price 33
Summary on Financial Fundamentals 35
Buffett's Tips from Chapter 2 36
References 36
Chapter 3: Bank Accounts, Debit Cards, Credit Cards, and Your Credit Score 38
Introduction 38
Insured Bank Deposits 38
Savings Accounts and Certificates of Deposit (CD) 40
Checking Accounts and Electronic Bill Payment 42
Parts of a Check 43
Balancing a Checkbook 44
Debit Cards and Automated Teller Machines (ATM) 45
Credit Cards and Charge Cards 46
Apps to Send Money: PayPal, Venmo, Zelle, Apple Pay, Android Pay, and so forth 49
Your Credit Score: A Report Card of Your Financial Responsibility 50
Personal Bankruptcy: Try to Avoid at all Costs 52
A Word on Bitcoin from Buffett 53
Buffett's Tips from Chapter 3 56
References 56
Chapter 4: Bonds and Inflation 58
Introduction 58
US Savings Bonds 59
Other US Treasury Fixed Income Securities 60
Inflation and the Consumer Price Index (CPI) 62
Bond Ratings and Corporate Bankruptcy 63
Corporate Bonds, Municipal Bonds, and Bowie Bonds 65
Bowie Bonds and Other Asset-Backed Securities 66
The Federal Reserve: The Central Bank of the United States 67
What Determines Interest Rates? 69
Intuition on Estimating the Price of a Bond 70
So Are Bonds Good Investments? 72
A Note on Negative Bond Yields 73
Appendix: Bond Valuation 74
Buffett's Tips from Chapter 4 75
References 75
Chapter 5: Stock Market Fundamentals 77
Introduction 77
Initial Public Offerings (IPOs): The Birth of a Stock 78
Investment Banks and Investment Bankers 78
The Main Event: The Stock Begins Trading on the Exchange 80
The Stock Exchange 81
A Sidebar on Stock and Mutual Fund Symbols 83
Dividends 84
Large Cap vs. Small Cap 87
Growth vs. Value 88
Domestic vs. International 90
An Index Fund: A Great "Set It and Forget It" Long-Run Investment 91
Beating the Market and the Efficient Market Hypothesis 92
Meet Mr. Market, the Manic-Depressive Stock Market 94
Buffett's Tips from Chapter 5 96
Appendix: Selling Short (or the "Don't Try This at Home" Area of Investing) 96
References 98
Chapter 6: Buffett's Approach to Stocks 100
Introduction 100
Estimating the Value of a Stock 101
Getting a Price Target with the Discounted Cash Flow Model 101
Getting a Price Target with the Wall Street P/E Model 103
Buffett's Approach to Stocks 105
Getting into the Buffett Mindset on Investing 105
Stay within Your Circle of Competence 106
The Importance of Being Patient 107
Good vs. Bad Companies and the Passage of Time 107
How Buffett Thinks About Change in an Industry 109
Types of Businesses Buffett Likes 110
Demonstrated Consistent Earnings Power 111
Look for Companies with Good Management 112
Buy Companies That Have the Power to Overcome Inflation 113
Focus on Firms with Favorable Long-Term Prospects 115
When to Sell 117
Summarizing Buffett's Approach 118
Buffett's Tips from Chapter 6 119
References 120
Chapter 7: Accounting Fundamentals: The Report Card for Businesses 122
Introduction 122
The Income Statement: A Company's Report Card for One Period 124
Apple's Income Statement 125
The Balance Sheet: A Picture of a Company's Report Card Since Inception 129
Current Assets 131
Long-Term Assets 132
Liabilities 134
Current Liabilities 134
Long-Term Liabilities 134
Stockholders' Equity 135
A Quick Note on the Statement of Cash Flows 137
Summary 138
Buffett's Tips from Chapter 7 139
References 139
Chapter 8: Buffett's Approach to Portfolio and Risk Management 141
Introduction 141
The Key to Selecting a Well-Diversified Portfolio: Correlation 142
A (Theoretical) Portfolio with No Risk 143
Selecting an Optimal Diversified Portfolio: The "Business School" Approach 144
Buffett's First Approach to Portfolio Selection: Index Funds 147
Buffett's Second Approach to Portfolio Selection: Expert Mode 147
A Compromise Solution to Portfolio Selection 149
How Many Stocks Make a Diversified Portfolio? 150
The "Business School" Approach to Risk 151
Buffett's Critique of the Business School Approach to Risk 153
Buffett's Approach to Risk 154
Buffett on Gold 155
Summarizing Buffett's Views on Risk 157
Endnote on CAPM 157
Buffett's Tips from Chapter 8 158
References 158
Chapter 9: Business 101: Companies You Should Know 160
Introduction 160
The Dow Jones Industrial Average: The Oldest Diversified US Stock Market Index 161
How the Dow Is Calculated 162
An Explanation of Stock Splits 164
Different Share Classes and Buffett on Stock Splits 166
Current Stocks in the Dow Jones Industrial Average 167
Materials Stocks in the Dow 168
Chevron (NYSE: CVX) 168
Dow Chemical (NYSE: DOW) 168
Consumer and Business Services Stocks in the Dow 169
Home Depot (NYSE: HD) 169
McDonald's (NYSE: MCD) 169
Walmart (NYSE: WMT) 170
Consumer Goods Stocks in the Dow 170
Apple (NASDAQ: AAPL) 171
Coca-Cola (NYSE: KO) 171
Nike (NYSE: NKE) 172
Procter & Gamble (NYSE: PG) 173
Walgreens Boots Alliance (NASDAQ: WBA) 173
Walt Disney (NYSE: DIS) 173
Financial Stocks in the Dow 173
American Express (NYSE: AXP) 174
Goldman Sachs (NYSE: GS) 174
JPMorgan Chase & Co. (NYSE: JPM) 174
Travelers (NYSE: TRV) 175
Visa (NYSE: V) 175
Health Care Stocks in the Dow 175
Amgen (NASDAQ: AMGN) 175
Johnson & Johnson (NYSE: JNJ) 176
Merck & Co. (NYSE: MRK) 176
UnitedHealth Group (NYSE: UNH) 176
Industrial Goods Stocks in the Dow 177
Boeing (NYSE: BA) 177
Caterpillar (NYSE: CAT) 177
Honeywell (NYSE: HON) 177
3M Company (NYSE: MMM) 178
Technology Stocks in the Dow 178
Intel (NASDAQ: INTC) 178
International Business Machines (NYSE: IBM) 179
Microsoft (NASDAQ: MSFT) 179
[...] (NASDAQ: CRM) 180
Telecommunications Services Stocks in the Dow 180
Cisco Systems (NASDAQ: CSCO) 180
Verizon (NYSE: VZ) 181
Some Blue-Chip US Stocks That Aren't in the Dow 181
The FANG Stocks-They Don't Bite 181
China's Emerging Titans 183
Some International Energy Titans 183
Some Global Consumer Titans 184
Some Global Financial Service Firms 185
Buffett's Tips from Chapter 9 185
References 186
Chapter 10: Business 101-Past and Present Business Leaders, or Who's Who in Business 187
Introduction 187
Past Business Leaders 188
Rose Blumkin (Mrs. B) 188
Andrew Carnegie 189
Walt Disney 189
Thomas Edison and Jack Welch 189
Henry Ford 190
Katharine Graham 190
William Randolph Hearst 190
Steve Jobs 191
Ingvar Kamprad 191
Ray Kroc 192
Estee Lauder 192
J.P. Morgan 192
John D. Rockefeller 193
Cornelius Vanderbilt 194
Sam Walton 194
Thomas Watson Jr. 195
Present Business Leaders 195
Bernard Arnault 196
Mary Barra 196
Jeff Bezos 197
Richard Branson 198
Michael Bloomberg 198
Sergey Brin, Larry Page, and Sundar Pichai 199
Shawn Carter, Beyoncé Knowles, Sean Combs, and Andre Young 200
Tim Cook 200
Jamie Dimon 201
Jack Dorsey 201
Bill Gates, Paul Allen, and Steve Ballmer 201
Reed Hastings 202
Kylie Jenner and Robyn Fenty 202
Phil Knight 203
Jack Ma, Pony Ma, and Robin li 203
Rupert Murdoch 203
Elon Musk 204
Amancio Ortega 204
Howard Schultz 204
Oprah Winfrey 205
Mark Zuckerberg and Sheryl Sandberg 205
Buffett's Tips from Chapter 10 206
References 206
Chapter 11: Being Thrifty like Buffett: Ways to Save Money 208
Introduction 208
Your Library: Free Books,...
Erscheinungsjahr: | 2021 |
---|---|
Fachbereich: | Betriebswirtschaft |
Genre: | Importe, Wirtschaft |
Rubrik: | Recht & Wirtschaft |
Medium: | Buch |
Inhalt: | 432 S. |
ISBN-13: | 9781119763918 |
ISBN-10: | 1119763916 |
Sprache: | Englisch |
Einband: | Gebunden |
Autor: |
Longo, John M.
Longo, Tyler J. |
Hersteller: | John Wiley & Sons Inc |
Verantwortliche Person für die EU: | Wiley-VCH GmbH, Boschstr. 12, D-69469 Weinheim, amartine@wiley-vch.de |
Maße: | 162 x 238 x 30 mm |
Von/Mit: | John M. Longo (u. a.) |
Erscheinungsdatum: | 25.02.2021 |
Gewicht: | 0,808 kg |