A new angle on the Sage of Omaha

Warren Buffett's Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor

Most books on Warren Buffett focus on his time running Berkshire Hathaway, his current investment vehicle. But Buffett produced more spectacular returns in his pre-Berkshire days and claims he could do so again today if he had to start from scratch. How? Jeremy Miller's book, Warren Buffett's Ground Rules, explores that question by focusing on the Buffett Partnership Limited, Buffett's fund from 1958-1969.

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The book is split into three parts. The first gives the background to the partnership, and Buffett's thoughts on issues such as compounding and benchmarking. The conclusion deals with the eventual winding up of the partnership. Interesting as these are, most readers will flick to the middle, which looks at the strategies Buffett used to make annual returns of nearly 30%, compared to 7.4% for the market over the same period.

One was to buy "Generals" firms priced at a steep discount to their net assets. Buffett also favoured stocks with hidden, less tangible assets such as Walt Disney's film library that the market had overlooked.

This is a strategy the average investor can copy, if they're willing to do the work. But in several cases Buffett was forced to use his fund's stake in a stock to realise value by selling assets. Usually this was painless, especially when the assets could be sold quickly at face value without harming the core operations. But in some cases, Buffett had to replace a management team, or wind up a firm acting more like a private-equity fund than a private investor.

Overall, Miller does a good job of letting Buffett speak for himself, helped along by his own commentary and clarifications, and it's impressive to find a new angle on an investor who has been covered in such great detail. A compact read that's thoroughly recommended.

Warren Buffett's Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor, by Jeremy Miller (Profile Books, £12.99).