The Warren Buffet Portfolio, Robert G Hagstrom

• Buffet suggests focusing on five to ten stocks.
• Why Munger and Buffet are not in high-tech investments : "...we'd rather deal with what we understand.  Why should we play a competitive game in a field where we have no advantage -- maybe a disadvantage -- instead of playing in a field where we have a clear advantage."
• "Each of you will have to figure out where your talents lie," counsels Munger, "and you will have to use your advantages.  But if you try to succeed in what you're worst at, you're going to have a very lousy career.  I can almost guarantee it."
• "Learning is simply a matter of observing what is going on around you."  Buffet
• The Kelly Optimization Model.
• There is a formula:  2p -1 = x (where p is the probability of winning expressed in fractional percentage, and x = percentage of your bankroll to bet).
• To receive the benefit of the Kelly model, you must first be willing to think about buying stocks in terms of probabilities.
• You must be willing to play the game long enough to achieve its rewards.
• You must avoid using leverage, with its unfortunate consequences.
• You should demand a margin of safety with each bet you make. 
• Benjamin Graham's approach to stock investing:
• Look at stocks as a business.
• Have a margin-of-safety.
• Have a true investor's attitude toward the stock market.
• Do not be stampeded by other people's misjudgment.
• When it comes to money and investing, people frequently make errors in judgment.
• In investing, ... we need to understand basic accounting and finance...statistics and probabilities.  But once of the most important fields to learn from is psychology.
• People put too much emphasis on a few chance events, thinking they they spot a trend.  
• Behaviorists have learnt that people tend to overreact to bad news and react slowly to good news.
• Thaler's notion of investor myopia -- shortsightedness lead to foolish decisions, and is driven by our innate desire to avoid loss.
• Risk-taking propensity is connected to two demographic factors -- age and gender.
• Successful focus investors need a certain kind of temperament.  The road is always bumpy, and knowing which is the right path to take is often counter-intuitive.

Great book.