Today’s we are
going to talk about 11 books that Warren Buffett recommends every investor must read. First
quick side note, did you guys know Buffett’s full name is Warren Edward Buffett. I have
been following him for a while and I just learned his middle name. Comment down below
if you actually knew his middle name.
Anyways back to the video. You might ask how do we know that Buffett’s actually recommended
all books in this list. Well as most you might already know, Buffett is an avid reader himself.
He spends 80% of his day reading. So whenever he finds an exceptional book, he usually shares
it through his shareholders letters or at his annual meetings.
So let's jump right into what these books are.
Common Stocks and Uncommon Profits, by Philip A. Fisher.
Widely respected and admired, Philip Fisher is among the most influential investors of
all time. His investment philosophies, introduced almost forty years ago, are not only studied
and applied by today's financiers and investors, but are also regarded by many as gospel. His
book, Common Stocks and Uncommon Profits, published in 1958, devotes careful attention
to this concept of networking and gathering information via business contacts. Fisher
recommended targeting businesses for investment that had growth orientation, high profit margins,
high return on capital, a commitment to research and development, a superior sales organization,
a leading industry position, and proprietary products or services. He was famous for the
depth of his research on companies with which he would invest. He relied on personal connections,
what he called the “business grapevine”, and conversation to learn about businesses
before buying stock. Warren Buffett said - A thorough understanding of the business, obtained
by using Phil's techniques, enables one to make intelligent investment commitments.
Business Adventures: Twelve Classic Tales from the World of Wall Street, by John Brooks.
Not long after Microsoft Corp . co-founder Bill Gates first met Mr. Buffett back in 1991,
Mr Gates asked the Oracle of Omaha to recommend his favorite book about business. As Mr. Gates
recounted, Mr. Buffett “ didn't miss a beat ” before naming this tome, a collection
of New Yorker articles from the 1960s. The book contains notable and fascinating accounts
of some of the largest companies of the mid 1900s that are as relevant today to understanding
the intricacies of corporate life as they were when the events happened. Stories about
Wall Street are infused with drama and adventure and reveal the machinations and volatile nature
of the world of finance. John Brooks's insightful reportage is so full of personality and critical
detail that whether he is looking at the astounding market crash of 1962, the collapse of a well-known
brokerage firm, or the bold attempt by American bankers to save the British pound, one gets
the sense that history really does repeat itself.
Where Are the Customers’ Yachts? by Fred Schwed.
Another decades-old classic, this book uses humor to pierce some of the pretensions of
Wall Street. The title comes from the story of a visitor to New York who was admiring
all the nice boats in the harbor, and was told that they belonged to Wall Street bankers.
He naively asked where the bankers' clients kept their boats. The answer: They couldn't
afford them. Mr. Buffett once called it "the funniest book ever written about investing,"
and said it "lightly delivers many truly important messages on the subject."
Full of wise contrarian advice and offering a true look at the world of investing, in
which brokers get rich while their customers go broke, this book continues to open the
eyes of investors to the reality of Wall Street. A light, fun read and something you’d definitely
want to pick up to have a laugh and more importantly, learn about the world of brokers and managers
so you don’t lose out on your money.
Essays in Persuasion, by John Maynard Keynes Essays In Persuasion written by legendary
author John Maynard Keynes is widely considered to be one of the top 100 greatest books of
all time. The essays in this volume show Keynes's attempts to influence the course of events
by public persuasion over the period of 1919-40. With startling accuracy Keynes forecast the
economic fluctuations that were to beset the economies of Europe and the United States
and even proposed measures which, if heeded at the time, might have warded off an era
of world-wide depression. His views on Soviet Russia, on the decline of laissez-faire, and
the possibilities of economic growth are as relevant today as when Keynes originally set
them forth. Mr. Buffett has flagged this collection of writings from the noted economist both
for the importance of its ideas and the clear way they're presented. While Mr. Keynes is
now known--and in some quarters, vilified--for his work as an economist, he also devoted
a fair amount of thought to stock picking. Mr. Bufett has deemed him "brilliant" at both
callings. "Reading Keynes will make you smarter about securities and markets," he told Outstanding
Investor Digest in 1989. "I'm not sure reading most economists would do the same."
The Little Book of Common Sense Investing, by Jack Bogle.
Jack Bogle, the CEO of the Vanguard group is a prolific investor best known for creating
the first index fund. An author of multiple books, The Little Book of Common Sense Investing
is probably his most famous work. In a time when everyone tried to beat the market with
great stock picks and then charge expensive fees for it, he thought: “Why not just mimic
what the indexes are doing and not manage anything?” This little thought turned into
one of the most prevailing investment ideas of the following century, and one of the most
respected investment companies in the world.The book shows you an alternative to actively,
poorly managed, overpaid funds by introducing you to low-cost, passive index funds as a
sustainable investing strategy, which gets you the retirement savings you need without
the usual hassle of stock investing. He claims that the majority of your money is best invested
in safe, low-cost index funds and you can’t go wrong by just choosing the cheapest index
fund. For the record, Mr. Buffett himself has frequently said most investors are better
off buying low-cost index funds.
Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger, edited by Peter Kaufman
This is a book very close to Mr.Buffett. It comes from Charles Munger, the Vice President
of Berkshire Hathaway, a man Warren Buffett described as his closest partner and right-hand
man. Mr. Buffett hasn’t been shy about attributing much of Berkshire’s success to his right-hand
man–in no small part for saying no to some of Mr. Buffett's stupider ideas. Mr. Munger
is a deep thinker on human behavior—and human frailties—and has spoken often about
how investors can shoot themselves in the foot. This book is a biography that chronicles
Charlie’s growth from his humble Omaha childhood to his phenomenal financial success. His Midwest
values prepared him well for his long illustrious journey. The book also summarises his approach
to life, decision-making, learning, and investing. It talks about his unconventional method of
thinking and his astonishing work ethic, that is, the twin fonts of his remarkable success.
There is a special Mungerisms: Charlie Unscripted section that holds a collection of scathing
remarks he had made at previous Wesco Financial and Berkshire Hathaway annual meetings. This
book also includes the talks and speeches that he had given in a specific twenty-year
period. The book not only will help you with direct tips on investment, but reading through
Mr. Munger’s experiences will definitely help you hone your investing skills and to
identify better investments. The Intelligent Investor, by Benjamin Graham.
If you are watching this video, I am 100% sure you already know this book. It’s considered
the bible of investing. The book that started it all for Buffett. A classic on the basics
of value investing, Warren Buffett once said about the book “Picking up that book was
one of the luckiest moments in my life”. After reading it, Mr. Buffett enrolled in
Columbia University so he could take classes from Mr. Graham, and later went on to work
for him. Even now, when asked a question about his approach to investing, Mr. Buffett is
liable to cite specific chapters from the book. The book teaches readers strategies
on how to successfully use value investing in the stock market. The Intelligent Investor
is notable today, with many famous investors praising it for helping them learn how to
determine value in the stock market and successfully pick stocks for their portfolios. Graham’s
main investment approach outlined in The Intelligent Investor is that of value investing. Value
investing is an investment strategy that targets undervalued stocks of companies that have
the capabilities as businesses to perform well in the long run. Value investing is not
concerned with short term trends in the market or daily movements of stocks. This is because
value investing strategies believe the market overreacts to price changes in the short term,
without taking into account a company’s fundamentals for long-term growth. In its
most basic terms, value investing is based on the premise that if you know the true value
of a stock, then you can save lots of money if you can buy that stock on sale. This book
is an absolute must read for starters to understand how to truly evaluate the market and not be
swayed by trends.
The Most Important Thing: Uncommon Sense for the Thoughtful Investor, by Howard Marks.
Howard Stanley Marks is an American investor and writer. He is the co-founder and co-chairman
of Oaktree Capital Management, the largest investor in distressed securities worldwide.
The Most Important Thing explains the keys to successful investment and the pitfalls
that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate
his ideas, Marks teaches by example, detailing the development of an investment philosophy
that fully acknowledges the complexities of investing and the perils of the financial
world. Brilliantly applying insight to today's volatile markets, Marks offers a volume that
is part memoir, part creed, with a number of broad takeaways. Marks expounds on such
concepts as "second-level thinking," the price/value relationship, patient opportunism, and defensive
investing. Frankly and honestly assessing his own decisions--and occasional missteps--he
provides valuable lessons for critical thinking, risk assessment, and investment strategy.
In today’s post-pandemic global market where companies are still finding their footing,
these are important values to find a solid investment.
The Outsiders, by William Thorndike Jr. A book that was #1 on Warren Buffett’s Recommended
Reading List on the Berkshire Hathaway Annual Shareholder Letter 2012, The Outsiders details
the extraordinary success of CEOs who took a radically different approach to corporate
management. In this refreshing, counterintuitive book, author Will Thorndike brings to bear
the analytical wisdom of a successful career in investing, closely evaluating the performance
of companies and their leaders. Thorndike talks about eight individualistic CEOs whose
firms’ average returns outperformed the S&P 500 by a factor of twenty—in other words,
an investment of $10,000 with each of these CEOs, on average, would have been worth over
$1.5 million twenty-five years later. Some of the companies on this list are highly recognisable
names like The Washington Post Company, Berkshire Hathaway, General Dynamics and more. Humble,
unassuming, and often frugal, these "outsiders” shunned Wall Street and the press, and shied
away from the hottest new management trends. This book is a must read to learn the traits
and methods—striking for their consistency and relentless rationality—that helped these
unique leaders achieve such exceptional performance.
The Clash of the Cultures: Investment vs. Speculation
This is another book from Buffett’s 2012 letter. In this Book, Legendary Investor John
Bogle talks about the changing culture in the mutual fund industry. For regular investors
like you and I, Bogle shares his list of 10 simple rules of “Common senses investing.”
According to Bogle, it “may not be the best strategy ever devised. But the number of strategies
that are worse is infinite.”
Dream Big by Cristiane Correa This book was original published in protugese
and after buffett’s recommnedation, English Copies of the book were virtually sold out
from every store. In this book Author Shares the story of the Brazilian trio behind 3G
Capital, the private-equity firm that owns Anheuser-Busch InBev and has partnered with
Berkshire on deals to acquire H.J. Heinz and Kraft Foods Group Inc. While Berkshire's partnerships
with the firm are recent, Mr. Buffett's relationship with 3G's Jorge Paulo Lemann go back for years.
"My friend - and now partner - Jorge Paulo and his team are among the best businessmen
in the world," Mr. Buffett said. "He is a fantastic person and his story should be an
inspiration to everybody, as it is for me."
That’s it for today, smash that like button if you enjoyed the video