Archive for the ‘Financial Acumen’ Category

Warren Buffett Invests Like a GirlWarren 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 ThingReading Minds and MarketsThe Snowball

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In How to Smell a Rat, Ken Fisher explores how most investment scams can be easily detected and avoided. With his 37 years managing money for individuals and institutions, 25 years writing for the “Portfolio Strategy” column in Forbes, and lifetime of studying markets, Fisher has witnessed countless money managers—both good and bad. He illustrates and examines the five most common signs of financial fraud in detail. Ultimately, readers will learn how to use the five signs as a checklist to identify and avoid con artists, or “rats.” How to Smell a Rat is a critical resource for any investor to spot a potential financial disaster before it is too late.

For a free trial of EBSCO Business Book Summaries click here.

Related book summaries in the BBS library: The Devil’s CasinoFundamentals of Enterprise Risk ManagementAnd Then the Roof Caved In

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It’s pretty clear that the U.S. economy is in turmoil. Though the National Bureau of Economic Research may have declared that the recession ended in June of 2009, it’s obvious that the country is still dealing with its effects.

While the recession may have had its beginning on Wall Street, organizations and individuals should take a hint; unchecked spending and lack of financial awareness can lead to disaster. It’s time for organizations and their employees to work on developing their financial acumen. On an organizational level, this will help companies save money and reduce rampant spending. On the individual level, this will help employees with their personal finances and make them more aware of their personal role in ensuring the financial success of their company.

Financial acumen is no longer a competency that should be relegated to only those employees holding financial positions. Everyone should work to increase their financial knowledge as a way of not only helping themselves become more fiscally responsible and secure, but also helping their organization reach those same goals.

Related summaries in the BBS library: The 3 Financial Styles of Very Successful Leaders, Leadership in the Era of Economic Uncertainty, Strategic Corporate Finance

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