Emotional IQ just as important as brainpower for Buffett

Investing is not a game where the guy with the 160 IQ beats the guy with a 130 IQ," he says. "Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."

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A Shout-Out on the Web

Investing groupies make Facebook pages a virtual Omaha

Warren Buffett has never been known for his love of technology. In The Warren Buffett Way, Robert Hagstrom describes how limited the 76-year-old executive's online activities are: "He buys books, reads the Wall Street Journal, and plays bridge."

But while Buffett has pretty much ignored the Internet, the Internet has certainly not ignored him. Scads of investing sites, forums, and blogs around the globe lionize Buffett's legendary investing prowess and the success of Berkshire Hathaway, the investment holding company he runs. Members of online communities like Silicon Investor, with its Buffett-loving constituency, pore over his shareholder letters, discuss Berkshire's numbers, and scrutinize the latest transactions.

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Warren Buffett's Amazing Record

If you have invested $1000 with Warren Buffett in 1956 (about $7700 in 2007 dollars) and never cashed in, you'd have amassed $27.6 million at the end of 2006.

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The Superinvestors of Graham-and-Doddsville

By Warren Buffett

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A Primer on PE Ratios

By Sanjay Bakshi

The PE ratio is the most common tool used by investors and financial analysts to ascertain how expensive or how cheap a stock is. Unfortunately, it is also one of the most misunderstood tools in the investment business. A stock which may be having a PE of 5 may be thought to be cheap and yet it may turn out to be quite an expensive mistake. Similarly, a stock which may be having a PE of 100 may thought to be too expensive may actually turn out to be a bargain.

What are the determinants of a stock's PE ratio? There are eight. These are: (1) Stability; (2) Growth; (3) Dividends; (4) Return on invested capital; (5) Leverage; (6) The proportion of non-operating assets in a company's asset base; (7) Financial community's appraisal about the industry and the company, including its managers; and (8) Interest Rates.

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