Hagstrom's Buffett Approach to Analyzing a Stock as a Business

by Wayne A. Thorp, CFA

Hagstrom's Buffett Approach To Analyzing A Stock As A Business Splash image

Warren Buffett captured headlines recently when his company, Berkshire Hathaway, announced that it was acquiring Burlington Northern Santa Fe Railway in a deal valued at approximately $44 billion. Buffett described the deal, which was his largest ever, as an “all-in wager on the economic future of the United States.”

Whether you are looking to acquire an entire company, or just purchase shares for your investment portfolio, a fundamental approach to investing begins first with an understanding of the value of a business. You can then determine if the current stock price presents an attractive buying opportunity.

A number of books have been written over the years that attempt to interpret Buffett’s investing philosophy and methodology. In his book “The Essential Buffett: Timeless Principles for the New Economy” (2002, John Wiley & Sons), Robert Hagstrom argues that it is possible to duplicate Warren Buffett’s approach within your personal area of expertise.

...To continue reading this article you must be registered with AAII.

Gain exclusive access to this article and all of the member benefits and investment education AAII offers.
JOIN TODAY for just $29.
Register for FREE
to read this article and receive access to future AAII.com articles.

Log in
Already registered with AAII? Login to read the rest of this article.
Wayne A. Thorp, CFA is a vice president and senior financial analyst at AAII and editor of Computerized Investing. Follow him on Twitter at @AAII_CI.


No comments have been added yet. Add your thoughts to the discussion!

You need to log in as a registered AAII user before commenting.
Create an account

Log In