The Warren Buffett Way: The World’s Greatest Investor

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Afterword

Managing Money the

Warren Buffett Way

I

began my money management career at Legg Mason in the summer of

1984. It was a typical hot and humid day in Baltimore. Fourteen newly
      minted investment brokers, including myself, walked into an open-
      windowed conference room to begin our training. Sitting down at our
      desks, we all received a copy of The Intelligent Investorby Benjamin
      Graham (a book I had never heard of ) and a photocopy of the 1983
      Berkshire Hathaway annual report (a company I had never heard of )
      written by Warren Buffett (a man I had never heard of ).
      The f irst day of class included introductions and welcomes from top
      management, including some of the f irm’s most successful brokers. One
      after another, they proudly explained that Legg Mason’s investment
      philosophy was 100 percent value-based. Clutching The Intelligent In-
      vestor,each took a turn at reciting chapter and verse from this holy
      text. Buy stocks with low price-to-earnings ratios (P/E), low price-to-
      book value, and high dividends, they said. Don’t pay attention to the
      stock market’s daily gyrations, they said; its siren song would almost
      certainly pull you in the wrong direction. Seek to become a contrarian,
      they said. Buy stocks that are down in price and unpopular so you can
      later sell them at higher prices when they again become popular.