Book Review: 'Trade Like Warren Buffett'

Review by Steven Rosales.

Unlike other books that focus on Warren Buffett's buy and hold investment style, this book takes a look at other stock market strategies Buffett uses. The author does this in a comprehensive, yet easy to read format. The best description of this book is that it takes the kind of concepts discussed in Joel Greenblatt's "You Can Be a Stock Market Genius" and examines how Buffett has for many years applied similar techniques.

What Did I Get Out Of It As A New Investor?
For the uninitiated there is the perception that Warren Buffett buys but never sells. That is false. As the book describes, Buffett often employs trading strategies to achieve superior results. Although trader-like, the author makes clear that the one constant among Buffett's trading and investing strategies is his insistence upon a margin of safety.

One of the more interesting aspects of this book is found in Chapter 9. This chapter discusses Buffett's personal holdings. While extensive coverage of Buffett's private transactions is not widely available, the author does a good job of gathering what is available and explaining exactly what, why, and how Buffett did over the years for his own trading account.

Chapter 9 also has an interesting tidbit of information. Buffett often relates that he owns 100 or so shares in many different companies as a means to keep abreast of companies he believes are possible investments or as a way to follow competitors of companies he already has an interest in. The book lists those securities owned by Buffett's private foundation, most of which are owned in 100 or so shares. For those interested in trying to decipher what Buffett is looking at the list presents interesting research material.

The Good News
A good, solid look at Buffett's other means of achieving stock market success. Rather than examining the better known facets of Buffett's investment style the book charts a fresh course by analyzing Buffett's more trader-like investments.

The Bad News
Many of the ways in which Buffett trades may not be available to investors who lack significant trading capital. On a lighter note, the book cover has one of the worst pictures of Buffett I have ever seen.

The Bottom Line
For those who desire a complete understanding of Warren Buffett, this book should be included in your personal library. For the merely curious, borrowing Altucher's book from your public library should suffice.

Related:

• Must-Read Investing Books -- The Seeking Alpha Bookshelf