An election year can cause a lot of uncertainty for investors, and one of the best ways to address it is by consulting reliable sources like the 11 investing books Warren Buffett wants you to read. Although the ins and outs of investing cannot be completely understood by just reading books, it is a good start. And if it’s recommended by the most successful investor in the world, then you’re guaranteed that you’re headed in the right direction.
Warren E. Buffett, the “Oracle of Omaha”, was born on August 30, 1930. The 85-year-old investment guru founded Buffett Partnership Ltd. in 1956 and took over the textile company Berkshire Hathaway in 1965. He eventually dissolved his first company and moved on to expand the latter. He removed the textile division of Berkshire Hathaway and bought various assets in different industries instead namely Geico (insurance), Washington Post (media), and Exxon (oil).
Buffett also made a huge investment in The Coca-Cola Co (NYSE:KO) and later on became the company’s director from 1989 to 2006. He also bought shares of American Express Company (NYSE:AXP), which is still in Berkshire’s portfolio and Gillette Company (now part of Procter & Gamble Co (NYSE:PG)). The “Sage of Omaha” believes in the investment philosophy of acquiring stocks of companies that he thinks are “well-managed” but are “undervalued”. This has been proven to be effective as Buffett’s wealth continues to grow.
More than just a businessman, the 85-year-old investing expert is also a voracious reader. Warren Buffett used to read 600 to 1,000 pages a day when he started his career and admits that now he still devotes 80% of his day to reading. We curated Buffett’s recommended books from Business Insider, The Motley Fool, and Wall Street Journal. However, if you like books but are not really keen on business titles, then you can check out our top 50 books to read before you die.
In 2008, Buffett was named by Forbes as the world’s richest person with an estimated net worth of $62 billion. In 2012, he was named as one of Time Magazine’s World’s Most Influential People and rightfully so. As of this writing, his current net worth is $67.3 billion and ranks third on the billionaires list. However, Buffett is not keeping his wealth all to himself. In 2006, he said that he would donate the majority of his wealth to the Bill and Melinda Gates Foundation. His total donation is 10 million shares of Berkshire Hathaway that will be distributed in 5% increments. In 2011, Buffett was awarded the Presidential Medal of Freedom by President Barack Obama.
Are you ready to increase your investing acumen? Let’s start reading the books that made Buffett the genius investor that he is!
11. “Take on the Street” by Arthur Levitt
In his 2002 shareholder letter, Buffett cited this “excellent book” telling the story of author Arthur Levitt during his stint as Chairman of the Securities and Exchange Commission (SEC). Out of 62 reviews, it has an average rating of 3.6 out of 5 stars on Amazon with 48% of readers giving it 5 stars and 21% giving it 4 stars.
What is the book about? Levitt gives readers an inside look at Wall Street from someone who used to regulate it. His insights are backed by eight years of being an SEC Chairman under President Bill Clinton. This book will help small and honest investors on how they can protect themselves from the labyrinth that Wall Street is. It gives you the tools and know-how you need to not only avoid pitfalls, but also to have a secure financial future.
10. “Business Adventures: Twelve Classic Tales from the World of Wall Street” by John Brooks
Back in 1991, Microsoft Corporation (NASDAQ:MSFT) founder Bill Gates asked Buffett, what his favorite business book was and the investment guru quickly cited “Business Adventures: Twelve Classic Tales from the World of Wall Street.” Out of 277 reviews, it has an overall Amazon rating of 4.1 out of 5 stars with 55% of readers giving it 5 stars. Buffett promised to send Gates a copy of the book and he did! Gates said that it’s the “best business book he’s ever read” and has since said that author John Brooks is his favorite business writer.
What is it about? This book tells Wall Street stories narrated with drama and adventure. It also exposes the volatility of the financial world and the machinations behind it. There are also corporate scandals in this book. Gates said that this book emphasizes the principles of creating a winning business, “For one thing, there’s an essential human factor in every business endeavor. It doesn’t matter if you have a perfect product, production plan, and marketing pitch; you’ll still need the right people to lead and implement those plans.”
9. “Investing Between the Lines” by L. J. Rittenhouse
Recommended in Buffett’s 2012 shareholder letter, the book “Investing Between the Lines” received praise from Buffett saying, “Rittenhouse is still on the side of the angels.” Out of 39 reviews, it has an average overall rating of 4.3 out of 5 stars on Amazon with 75% of reviewers giving it 5 stars. The book is written by L.J. Rittenhouse, President of Rittenhouse Rankings Inc., an investor relations and CEO advisory company that conducts yearly benchmark surveys on corporate candor.
What is the book about? It basically helps readers make better and smarter decision by simply looking at CEO communications. The book asserts that you don’t need inside information to know the financial integrity of an organization. Backed by decades of analyzing executive communications, the author will help you decipher the corporate jargon and CEO language as it reveals the true culture of the company. This book will also help you distinguish the fact from the fluff when it comes to quarterly earnings and annual reports.
8. “The Outsiders” by William Thorndike, Jr.
Buffett described this book as “an outstanding book about CEOs who excelled at capital allocation.” It also resonated well with the readers, garnering an average rating of 4.6 out of 5 stars on Amazon. Out of the 228 reviewers, 76% gave it 5 stars. Buffet and his company were in one of the chapters. He was described by Capital Cities/ABC Inc. director Tom Murphy as “overall the best business manager I’ve ever met.”
What is it about? The full title of this book is “The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success.” It looks at how the leaders of General Cinema, Ralston Purina, The Washington Post Company, Berkshire Hathaway, General Dynamics, Capital Cities Broadcasting, TCI, and Teledyne deliver exceptional performance. Author William Thorndike brings his analytic wisdom as a successful investor in analyzing how these CEOs have shared values in focusing on per share value rather than sales growth or company earnings, have a remarkable ability in talent and capital allocation, and have strong belief that cash flow determines the long-term value of a company.
7. “The Most Important Thing Illuminated” by Howard Marks
Buffett had this to say about this book: “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something, and that goes double for his book.” Out of 103 customer reviews on Amazon, “The Most Important Thing Illuminated” averaged 4.5 out of 5 stars with 74% of reviewers giving it 5 stars.
What is the book about? Author Howard Marks is the former CEO and Co-founder of Oak Tree Capital Management. His book compiles his highly notable client memos which are commented on by renowned investors and industry experts. It highlights the concepts of defensive investing, price-value relationship, patient opportunism, reasonable expectations, and the popular “second-level” thinking.
6. “The Little Book of Common Sense Investing” by John Bogle
Recommended by Buffett in his 2014 shareholder letter, he gave investors tips on advisors, “In truth their core is salesmanship. Rather than listen to their siren songs, investors—large and small—should instead read John Bogle’s The Little Book of Common Sense Investing.” Out of 420 reviews, the book received an average rating of 4.6 out of 5 stars on Amazon with 72% giving it 5 stars.
What is the book about? Founder of Vanguard Group Bogle created the first index mutual fund in the world. He detailed in the book the benefits of index investing. It tells you why earnings growth and dividend yields are more vital than market expectations. Buffet has been known to advise investors to buy index funds that are low cost. Much loved by readers, this book truly deserves a place in the 11 investing books Warren Buffet wants you to read.
5. “Where are the Customers’ Yachts?” by Fred Schwed Jr.
Part of Buffett’s recommended reading in the 2006 shareholder letter, the Oracle of Omaha described this book as the “funniest book ever written about investing, it lightly delivers many truly important messages on the subject.” Out of 105 reviews, it received a 4.4 out of 5 stars on Amazon with 70% of readers giving it 5 stars.
What is the book about? This classic book tells the story of a New York visitor who was told that the boats in the harbor were owned by Wall Street Bankers. When the visitor asked “where are the customers’ yachts?” he was told the bankers’ clients couldn’t afford them. This hilarious book exposes the hypocrisy in Wall Street, where “brokers get rich and customers go broke.”
4. “The Clash of the Cultures” by John Bogle
Mentioned in Buffett’s 2012 shareholder letter, this book is another classic written by Bogle that highlights the importance of long-term investment over short-term speculation. Out of 75 reviews, it has an average rating of 4.5 out of 5 stars on Amazon, receiving 5 stars from 75% of readers.
What is the book about? Bogle discussed the changing tides in the mutual fund industry, how the national retirement system is permeated by speculation, and more. But this book is not all knowledge, there are 10 practical tips toward the end of the book to guide starting and seasoned investors. One of which is “time is your friend, impulse is your enemy.”
3. “Common Stocks and Uncommon Profits” by Phillip Fisher
Buffett holds author Phillip Fisher in high esteem saying, “I am an eager reader of whatever Phil has to say, and I recommend him to you.” He also said, “”I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits […] A thorough understanding of the business, obtained by using Phil’s techniques…enables one to make intelligent investment commitments.” The book garnered an average review of 4.4 out of 5 on Amazon, receiving 5 stars from 67% of the 119 customers.
What is the book about? Respected and influential investor, Fisher shares his investment philosophies that are still being used up to now. Though the book was published back in 1958, both investment newbies and gurus still recognize Fisher’s investing principles as their ultimate guide. Buffett said that Fisher’s approach is, “to find something so good — if you don’t pay too much for it — that it will have very, very large growth.”
2. Security Analysis by Benjamin Graham
Mentored by Benjamin Graham, Buffett considers the author as the second most influential person in his life next to his father. He said that this book has given him “a road map for investing that I have now been following for 57 years.” Out of 147 customers, the book has an average rating of 4.5 out of 5 stars on Amazon with 72% of reviewers giving it 5 stars.
What is the book about? “Security Analysis” has already sold more than 1 million copies worldwide. Published in 1934, the book’s timeless content cuts across all market conditions, asset classes, and countries. It teaches readers the basic principles of value investing, evaluating assets, and determining if assets are classified correctly.
1. “The Intelligent Investor” by Benjamin Graham
Another book by Buffett’s mentor, the Oracle of Omaha read this book at the age of 19. In his 2011 shareholder letter he said, “Picking up that book was one of the luckiest moments in my life.” This prompted him to enroll in Columbia University and take classes under Graham. Buffett calls it, “By far the best book on investing ever written.” He also noted that some of the most valuable investing insights in the book are found in chapters 8 and 20. Out of 1,050 reviews, the book received an average rating of 4.5 out 5 stars on Amazon with 69% of customers giving it 5 stars and 19% giving it 4 stars.
What is the book about? Buffett explained it this way, “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.” “The Intelligent Investor” is all about value investing and how this principle protects investors from committing costly mistakes and teaches them to create long-term strategies. The book is also known as the stock market bible.
These 11 investing books Warren Buffett wants you to read are roadmaps to smarter and successful investing. In a volatile financial market, it’s best to rely on time-tested and proven techniques from reliable and expert sources who have decades of success to show for.
