Author

Lawrence Cunningham (ed.)

8 key ideas, each explained in our own words.

The Essays of Warren Buffett

IDEA 1
Shareholders are partners, not outsiders
Cunningham arranges Buffett's letters to show his view that shareholders are owners of a business. Buffett writes to them as partners, explaining his thinking plainly and treating their money as carefully as his own.
IDEA 2
Mr. Market is moody
Buffett borrows his teacher Benjamin Graham's image of Mr. Market, a partner who offers prices that swing with his moods. The investor's job is to use these swings sensibly, never to be ruled by them.
IDEA 3
Value differs from price
Buffett distinguishes the price of a share from the intrinsic value of the business behind it. Intrinsic value depends on the cash a business will produce over its life, which requires judgement to estimate.

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