Warren Buffett is a rabid reader of newspapers, company reports, and books. He has spent many hours a day reading over the past 70 years and does have some favorite books that made a big impression on his life. Here are the top five books that most influenced Warren Buffett in his investing and business career.
‘The Intelligent Investor: The Definitive Book on Value Investing’ by Benjamin Graham
Warren Buffett first read this book when he was only 19 years old.
He said reading this book was the one of the luckiest moments of his life, because it gave him the intellectual framework for investing.
“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.” – Warren Buffett
‘Security Analysis: Principles and Techniques’ by Benjamin Graham and David Dodd
Warren Buffett said that this book gave him “A road map for investing that I have now been following for 57 years.”
This book taught Buffett that if his analysis is thorough enough, he can figure out the value of a company — and whether the market knows that fact or not creating opportunities to buy stocks at value prices.
‘Common Stocks and Uncommon Profits’ by Philip Fisher
Warren Buffett said “I am an eager reader of whatever Phil has to say, and I recommend him to you.”
In this book the author emphasizes that focusing on financial statements isn’t enough and that the investor should also look at the quality of a company’s management and the potential for future earnings power through growth.
‘Business Adventures: Twelve Classic Tales from the World of Wall Street’ by John Brooks.
Back in 1991, Bill Gates asked Buffett what his favorite book was.
Buffett then sent Bill Gates his copy of “Business Adventures.” The book is a collection of New Yorker stories by writer John Brooks.
Bill Gates said the book is a great reminder that the principles of success in business stay the same over time.
Gates said: “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.”
‘One Thousand Ways to Make $1000’ by F.C. Minaker.
This book was first published in 1936 and had been out-of-print for a long time before interest resurfaced in it after Warren Buffett’s biographers credited it with helping the billionaire understand both the power of compound interest and also the power of reinvesting cash flow from assets to buy more assets. Mr. Buffett says that after reading a copy of this book from the library at age eleven, he starting telling people he would be a millionaire by the age of 35. While most of the specific examples in this book are out dated the principles are powerful and can be applied to new types of opportunities in the 21st century to create cash flowing assets.
These are some of the most influential books in Warren Buffett’s life that helped lay the groundwork that made him a billionaire and the richest man in the world at the peak of his wealth.