Business Book Summaries

Warren Buffett Invests Like a Girl is a book for investors about investing. It is a book about harnessing emotions and personality to increase investment returns to levels that can lead individuals to financial freedom. Author LouAnn Lofton offers up a case study of investor Warren Buffett that demonstrates how Buffett’s feminine temperament has allowed him to parlay the small investments he made as a teenager into the greatest investment portfolio in human history.

In her book, Lofton explains to readers that:

• What truly defines Warren Buffett, makes him the investor he is today, and separates him from everyone else is his remarkable temperament.
• Smart investors should embrace feminine influences. Female investors are more willing than men to admit that they do not know everything. They learn from their mistakes, trade less, and take less risk. They are less optimistic and more realistic than their male counterparts and put more time and effort into researching investments.
• Being a successful investor requires patience and taking the long view. It also helps to remember that investing means buying a piece of an actual business; buy a stock, buy a business.
• Investors should invest in companies they understand and learn what their own circles of competence are and stick to them: “buy what you know.”
• Smart investors insist on appropriate margins of safety, avoid debt, and when investing overseas, they do their homework.
• Investors should not get excited by market swings to the upside or devastated by market drops.
• To become better investors people must do their research, and avoid confirmation bias by actively seeking out information that contradicts their conclusions, not only information that reinforces them.
• Investors must value people, cultivate relationships, and recognize that a business is only as strong as the people running it. Smart investors look for companies with smart, open, loyal, and fair executives who can be admired and put people before profit.
• The learning never stops, so investors must keep studying and learn from the masters, but they must not hesitate to question them.
• Ethics in business is important. People can be good and rich; one does not preclude the other.
• Compound interest is a miraculous thing; investors can take advantage of its full power by giving their investments time to grow.

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Related book summaries in the BBS library: The Most Important Thing, Reading Minds and Markets, The Snowball