Book Review: The Essays of Warren Buffett — The Owner’s Playbook for Long-Term Compounding (Singapore Investor Edition)

A calm, practical guide to thinking like a business owner — so you can judge management, capital allocation, and valuation with discipline on SGX.

Published: 6 December 2025 | Category: Book Review / Investor Education

Key Takeaways (If You Only Have 30 Seconds)

The real edge is ownership thinking: stop treating stocks as tickers and start judging businesses.
Management quality compounds (or destroys): integrity + ability + rational capital allocation matters more than “story.”
Owner earnings beats headline profit: learn what cash the business can truly deliver to owners over time.
Valuation is not P/E and yield: think in intrinsic value, durability, and reinvestment economics.
Governance is a Singapore super-filter: many SGX disappointments are governance/incentive failures.
Volatility ≠ risk: market mood swings create opportunity when you anchor on business value.
Capital allocation is the CEO’s job: buybacks, dividends, reinvestment, and M&A decisions decide your return.

Book Quick Facts

Author: Warren Buffett (compiled/organised by Lawrence A. Cunningham)
Who it’s for: Investors who want to evaluate businesses and management like an owner
Reading difficulty: Moderate (writing is clear; the thinking is deep)
Core theme: Governance, capital allocation, valuation discipline, and long-term compounding
Best for: SGX investors, dividend investors, long-term investors, business owners
Time to read: [Not provided]

1. What This Book Is Really About

Let’s start with a painful truth many Singapore investors rarely say out loud:

You don’t actually think like an owner — even if you think you do.

Most investors here treat stocks as:

tickers,
prices,
dividend yields,
“SGX plays,”
or (without realising) short-term trading opportunities.

Buffett’s letters force a different mindset:

When you own a stock, you own a slice of a real business — with real managers, real economics, and real long-term consequences.

This is the central pain point The Essays of Warren Buffett solves:

You stop treating investing as stock-picking.
You start treating investing as business ownership.

And once that mindset shifts, everything else changes — your patience, your valuation discipline, your ability to ignore noise, and your conviction when the market is fearful.

Explaining it like you’re 11:

If you buy a small share of your friend’s lemonade stand, you don’t check the “price” every minute. You ask: Does it make money? Are customers coming back? Is your friend honest? That is owner thinking.

Analyst insight (what changes when you think like an owner):

You focus on cash flow durability, not headline yield.
You evaluate management incentives, not just quarterly results.
You become less sensitive to market mood swings and more sensitive to business fundamentals.
You naturally hold longer, reducing self-inflicted turnover costs.

This is why this book — a curated anthology of Buffett’s most important letters, organised by topic — is not “nice to read”.

It is an operating manual for rational investing.

2. Why It Matters for Singapore Investors

Everyone benefits from Buffett’s wisdom, but Singapore investors benefit disproportionately because our market structure amplifies the very mistakes Buffett warns about.

SGX is dominated by slow-growth, moderate-moat businesses

Buffett teaches you how to distinguish:

which businesses deserve premium valuations,
which “okay” businesses quietly erode value,
which boring, well-run businesses compound for decades.

In a market with value traps, privatisation risks, and governance complexity, Buffett’s filters can materially improve your hit rate.

Singapore portfolios are often REIT-heavy

Buffett repeatedly teaches the difference between:

accounting profits,
real economic earnings,
owner earnings (what can truly be taken out without harming the business).

This mindset helps you look past marketing narratives and evaluate whether distributions are backed by durable economics (and prudent balance sheet structure).

Singapore is a trader-heavy environment

There is a cultural pull toward:

short-term gains,
dividend chasing,
fear-driven selling,
momentum behaviour.

Buffett dismantles this by teaching:

volatility ≠ risk,
patience as a competitive advantage,
buying wonderful businesses at fair prices.

We lack strong retail frameworks for evaluating management

Buffett repeatedly stresses:

integrity,
talent,
alignment,
shareholder orientation.

That matters in a region where related-party transactions, cross-shareholdings, and family control can blur incentives.

Buffett’s essays provide a governance filter many Singapore investors desperately need.

3. The Big Ideas (Explained Clearly)

Most Amazon reviews miss the real point. They often make three mistakes:

“It’s just a collection of letters.” It’s a structured curriculum — Buffett’s thinking organised by topic.
“Buffett’s writing is simple.” His language is simple; his logic is layered (incentives, second-order effects, and patience).
“It’s governance-heavy, so not useful for retail investors.” Governance is the foundation of compounding. Bad management destroys wealth faster than a bad industry.

This review focuses on what matters for a Singapore investor: the thinking systems behind the essays, and the “hidden pain points” they solve.

4. Key Mental Models / Frameworks

The Essays of Warren Buffett is arranged thematically. Below is a Singapore-relevant walkthrough of the core sections.

Corporate Governance: the bedrock of compounding

Buffett treats governance as a compounding engine: good governance protects capital, good incentives prevent value-destroying behaviour, and transparent communication builds trust.

In Singapore, this matters because many companies are:

family-controlled,
board-entrenched,
exposed to related-party dynamics,
not designed for minority shareholders to win.

Buffett’s filters help you avoid companies structurally incapable of compounding — even if they look “cheap.”

M&A: how value is created (or destroyed)

Buffett explains why most acquisitions fail: incentives, ego, and overpaying. Overpay once and your future returns get permanently handicapped.

Applied to SGX and REITs, this becomes a practical question set:

Has management overpaid for acquisitions just to grow AUM?
Are deals sponsor-driven rather than unitholder-driven?
Do rights issues keep appearing because the model requires constant capital?

Explaining it like you’re 11:

If you trade your $10 toy for a $5 toy, you can’t “work harder” to undo it. The mistake is locked in. Overpaying for an acquisition is similar — the bad deal stays in the business for years.

Valuation: what truly drives returns

Buffett emphasises intrinsic value and owner earnings. He teaches you to think beyond accounting profit and focus on cash that owners can take out without damaging the business.

For Singapore investors, this often means:

stop using dividend yield as the main “value” signal,
focus on cash flow durability and reinvestment economics,
ask whether a business can deploy capital at good returns for many years.

Accounting: seeing through the numbers

Buffett discusses how accounting can distort reality — and why investors must watch the cash flow statement and incentives behind reported numbers.

This is particularly useful when small caps:

look cheap on P/E but generate little cash,
inflate “profits” through one-offs,
build book value that doesn’t translate into owner returns.

Culture: the invisible moat

Buffett repeatedly stresses culture. The wrong culture can destroy a good business. The right culture protects compounding.

Signals to watch (often more powerful than ratios):

management turnover patterns,
capital allocation track record,
clarity and honesty of shareholder communication.

Capital allocation: the CEO’s most important job

Buffett teaches when to reinvest, repurchase shares, pay dividends, or do nothing. Many SGX management teams fail here, which is why shareholder returns disappoint even when the business looks “fine.”

Market behaviour: volatility creates opportunity

Buffett reinforces a steady message: ignore forecasts, ignore panic, ignore euphoria, and anchor on business value. Many investors confuse volatility with risk. Buffett separates them cleanly.

Analyst insight (Buffett’s “system” in one line):

Buy a good business, with good management, at a sensible price.
Ensure the business can reinvest capital at attractive returns.
Avoid incentives and governance structures that block compounding.
Let time do the heavy lifting.

5. How to Apply This to SGX Investing

Here’s a simple way to translate Buffett’s essays into a repeatable SGX investing process.

Step 1: Build an “owner’s checklist” (one page)

Business model: how does it make money, and what could disrupt it?
Moat durability: why do customers return, and can competitors copy it?
Owner earnings: does profit convert to cash over time?
Balance sheet: can it survive a bad cycle without dilution?
Management: integrity, rationality, shareholder communication quality.
Capital allocation: reinvestment returns, buybacks vs dividends vs empire-building.
Valuation: are you paying a fair price for durable economics?

Step 2: Apply the “management filter” early

Buffett’s approach saves time by rejecting weak management early — before you get attached to a stock story.

If incentives are misaligned, walk away.
If communication is consistently unclear, walk away.
If capital allocation history is poor, be very cautious.

Step 3: Reframe dividends as a capital allocation choice

Dividends are not “free money.” They are one output of capital allocation. The real question is whether management is allocating capital in ways that maximise long-term owner value.

Step 4: Treat volatility as information about price, not value

Buffett trains you to become calmer when prices fluctuate — because you know what you own and why you own it.

6. What I Agree With (and What I Don’t)

What I agree with: Buffett’s emphasis on incentives, governance, and capital allocation is incredibly practical for SGX. Many “value” disappointments here are governance problems in disguise.

What some readers may find frustrating: this book won’t give you a stock screen. It improves your thinking quality. That feels “indirect” — until you realise fewer mistakes is a huge return driver.

Analyst insight (how to read it well):

Read slowly and extract principles into a personal checklist.
Use the essays to judge management and capital allocation — not to “forecast” prices.
Re-read sections after you’ve analysed a few annual reports; they land deeper.

7. Who Should Read This (and Who Should Not)

Intermediate investors: highly recommended — biggest shift from “stock picking” to “business evaluation.”
Advanced investors: essential — governance, accounting, and capital allocation insights separate amateurs from pros.
Business owners and professionals: the essays are strategy lessons (culture, incentives, M&A).
Long-term compounding investors: if you want 20-year results, you need a 20-year mentality.

Not recommended for:

short-term traders,
people looking for stock tips,
readers unwilling to think deeply.

8. Practical Action Steps (Checklist)

Create a management evaluation checklist (integrity, alignment, communication, track record).
Audit your holdings for capital allocation history (buybacks, dilution, acquisitions, dividends).
Analyse one company you own using “owner earnings” thinking (cash reality over accounting optics).
Evaluate governance quality before valuation ratios (many cheap stocks are cheap for a reason).
Reassess REIT acquisitions/rights issues using Buffett’s discipline on overpaying and incentives.
Reduce noise inputs and anchor on intrinsic value and business fundamentals.

Buffett’s essays don’t give you more information. They give you better judgment.

9. My Overall Verdict

The Essays of Warren Buffett is one of the highest “signal-to-noise” investing books you can read. It doesn’t hype. It doesn’t chase trends. It teaches enduring principles: governance, incentives, valuation discipline, and capital allocation — the real drivers of long-term compounding.

Scorecard	Rating
Rigor	10/10
Practicality	9/10
Singapore relevance	10/10
Readability	9/10
Portfolio impact	10/10

Overall: 48/50 — required reading for anyone who wants to think like Buffett and build a portfolio designed to compound.

Get the book (Amazon)

If you’d like to get the book, you can find it here:

Buy on Amazon

(I earn a small commission at no extra cost to you — it helps keep this blog running.)

10. FAQ (Singapore Edition)

Is this book useful for SGX dividend investors?

Yes. It helps you look past headline yield and focus on owner earnings, balance sheet strength, and management’s capital allocation discipline — the real drivers of sustainable dividends.

Does it help with REIT investing?

Indirectly but powerfully. Buffett’s thinking trains you to spot incentives and overpaying behaviour, and to judge whether distributions are backed by durable economics rather than financial engineering.

Is it beginner-friendly?

Buffett’s writing is clear, but the best value comes when you already understand basic financial statements. Many readers start now and re-read later for deeper insights.

What is the single most important lesson to apply immediately?

Evaluate management and capital allocation first. A wonderful business can be ruined by poor incentives and irrational decisions at the top.

How should I use this book without overconfidence?

Use it to build a checklist and improve judgment — not to “predict” short-term market moves. Buffett’s edge is discipline and long-term orientation.

About the Author

HenryT is a Fellow Chartered Accountant (FCA) based in Singapore and the writer behind The Accounting Investor. He combines professional accounting training, corporate finance experience and personal dividend investing to help everyday investors read financial statements with confidence.

Start Here | Companies A–Z

Disclaimer

This article is for education and general information only. It does not constitute investment, legal, tax or any other form of professional advice, and it is not a recommendation to buy, sell or hold any securities mentioned.

My sole intent is to help readers learn how to read financial statements and think more clearly about businesses. Please do your own research or consult a licensed financial adviser before making any investment decisions. I may or may not hold positions in the securities discussed at the time of writing and am under no obligation to update this article.

Book Review: The Essays of Warren Buffett — The Playbook Every Serious Singapore Investor Should Study