Warren Buffett is one of the most successful investors in the world today. He is the CEO of Berkshire Hathaway, an American multinational conglomerate holding company headquartered in Nebraska, United States. Buffett is known for his extraordinary reading habit, which according to him is one of the secrets of his success. He used to read between 600 to 1,000 pages a day in the earlier part of his life. Today, Buffett still spends about 80% of his time reading. In this article, we will be pointing out some of Warren Buffett’s most recommended books of all time.
Apart from having an exceptional reading habit, it is Buffett’s goals for reading that seem to make all the difference. In an interview, he explained that whenever he reads a book, he is usually not just after the opinions of the writer over issues. What Buffett aims to get out of any book he reads are facts that can be implemented.
One can hardly argue with Warren Buffett when it comes to business and investment advice. He has the results to back up any claims whatsoever, and has been there long enough to be worth an institution. If Buffett makes a recommendation, then you ought to pay close attention to it, especially if you want to become a successful investor. Hence, here is a list of Warren Buffett’s most recommended books of all time.
1. The Intelligent Investor, by Benjamin Graham
This is one of the earliest books that Buffett read on investment. He read this book at the age of 19 and claims this to be one of the luckiest events of his life. According to Buffett, The Intelligent Investor is a book that gave him the intellectual framework for investing.
Here is what he had to say about the book:
“To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework. You must provide the emotional discipline.”
2. Security Analysis, by Benjamin Graham and David L. Dodd
The business of investing is a continuous process, and investors must be able to adapt to the evolving ecosystem in order to remain successful. This particular book is one that Buffett described as his roadmap for investing, which he has followed for 57 years.
The core of this book focuses on analysis, which Buffett notes to be very important for a successful investment career.
“If your analysis is thorough enough, you can figure out the value of a company–and whether the market knows the same.”
3. Common Stocks and Uncommon Profits by Philip Fisher
This book by Philip Fisher comes away from the market to focus on the investment entity, the company. Although, Fisher’s work didn’t have as much impact on Buffett as the works of Graham, he still recommends it as an important tool for any investor.
This book emphasizes the fact that apart from studying the market as a whole, a proper analysis of the company being invested in must be made, especially in the area of management.
4. Stress Test: Reflections on Financial Crises, by Tim Geithner
One thing that any investor can never run away from is “tough times”. Very often, it is these periods that make the difference between a successful investor and an unsuccessful one.
Tim Geithner is a former secretary of the U.S. Treasury. According to Buffett, this book about the financial crisis is a must read for every manager. It teaches you how to manage an organization through difficult periods.
5. Jack: Straight from the Gut, by Jack Welch
This is a book that Buffett advised every investor and business person to “get a copy”. The book is written by a longtime GE executive, Jack Welch. The book narrates his personal history and experience in the business and investment ecosystem. What you could call a firsthand information of the industry.
Buffett describes Welch as “smart, energetic, and hands-on”.
6. The Outsiders, by William Thorndike Jr.
This book, The Outsiders was described by Forbes as one of the most important business books in America. It is a book about the CEOs that excelled in capital allocation.
One of the directors at Berkshire Hathaway (Warren Buffett’s company) Tom Murphy has a whole chapter dedicated to him. Buffett describes Murphy as the overall best manager that he has ever met.
7. The Clash of the Cultures, by John Bogle
Investors exist in two major distinctive cultures; long time investing and short time speculation. This book by John Bogle is an argument between the two investment cultures, plus other practical tips that will help you to achieve your goals as an investor or business manager.
Bogle currently manages over $3 trillion in assets, and is known to have created the index fund, and the founder of the Vanguard Group. This book is a display of the depth of experience that he has acquired over the years of playing an active role in the investment circle.
8. Business Adventures: Twelve Classic Tales From the World of Wall Street, by John Brooks
When two of the most successful businessmen in the world praise the same book, then there must be something special about the book. In response to Bill Gates’ question of what his favourite book was, Buffett sent him his personal copy of the book Business Adventures. It is a collection of New Yorker stories by John Brooks.
In his review, Gates described the book as a reminder that the principles of building a winning business are to stay constant.
9. Where Are the Customers’ Yachts? by Fred Schwed
Not every investment discussion must be presented in a formal, serious tone. This book is an interesting piece of investment advice that comes along with a tint of humour.
It is the story of a visitor to New York City who on arrival saw the yachts belonging to the bankers and brokers and asked to see those of the customers. His question was implicative of the fact that the people who provided the business and financial advice appeared to be better off than those taking them.
It is a book filled with lots of financial wisdom that remain relevant to the investment atmosphere of today. Buffett describes it as the funniest book ever written about investment.
10. The Little Book of Common Sense Investing, by Jack Bogle
Another book by Jack Bogle that borders around his experience in the investment ecosystem, rather than some empirical formula for success. Bogle attempts to help readers of this book learn how to use index investing to build wealth. It revolves around his experience working with Vanguard clients.
Buffett favours this book as a better source of financial guidance, rather than listening to financial advisers.
11. The Most Important Thing Illuminated, by Howard Marks
This is a book that teaches investors to be more thoughtful in their investment decisions. It revolves around the personal story of the author, noting the mistakes he made in his career as an investor and the lessons that he learned from them.
Marks, who is the co-founder of Oaks Tree Capital intended to wait until retirement before writing this book. However, he was persuaded by Buffett who admired Marks’ client memos to write it a bit sooner.
12. First a Dream, by Jim Clayton and Bill Retherford
This is a book that Buffett claims to have motivated him to make an offer to invest in the company Clayton Homes. It is the story of Jim Clayton and how he built a company that has become the largest seller of manufactured housing in America from scratch.
It is a lesson on business and leadership for current and aspiring entrepreneurs that is based on the personal experience of Clayton.
Conclusion
Book recommendations are often the best advice that you can receive, especially from successful people. Books are primary sources of education, and the particular field of endeavour determines the kind of books to read.
The above list of Warren Buffett’s most recommended books of all time presents a wealth of knowledge that can enable you make valuable business and investment decisions. They also contain information that can help you in other areas of life. And if you’re interested in some more Warren Buffett inspired reading, check out his own book, The Essays of Warren Buffett.
What a great oke! Will definitely give these a read, will start with The Intelligent Investor