Like most successful stockpickers, Warren Buffett thinks that the efficient market theory is absolute rubbish. Buffett has backed up his beliefs with a successful track record through Berkshire Hathaway, his publicly traded holding company.
Unfortunately, Buffett has never expounded extensively on his investment approach, although you can glean tidbits from his writings in the Berkshire Hathaway annual reports. However, a cottage industry has sprung up over the years as outsiders have attempted to explain Buffett’s investment philosophy. One book that discusses his approach in an interesting and methodical fashion is “Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World’s Most Famous Investor” (Scribner, 1999) written by Mary Buffett, a former daughter-in-law of Buffett’s, and David Clark, a family friend and portfolio manager.
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