Want to be like Warren Buffet, read like Warren Buffet!
“Read 500 pages like this every day,” the he shared with a group of MBA students at Columbia Business School in 2000. “That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not very many of you will do it.”
1. ‘The Intelligent Investor’
By Benjamin Graham
“In my early days, I, too, rejoiced when the market rose. Then I read chapter eight of Ben Graham’s ‘The Intelligent Investor,’ the chapter dealing with how investors should view fluctuations in stock prices,” he wrote in his 2011 letter. “Immediately, the scales fell from my eyes, and low prices became my friend. Picking up that book was one of the luckiest moments in my life.”
He mentioned it again in 2013: “Of all the investments I ever made, buying Ben’s book was the best (except for my purchase of two marriage licenses). In contrast, Ben’s ideas were explained logically in elegant, easy-to-understand prose (without Greek letters or complicated formulas).”
2. ‘The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success’
By William N. Thorndike
In “The Outsiders,” William N. Thorndike, a graduate of Harvard College and the Stanford Graduate School of Business, details the extraordinary success of eight successful CEOs who took a radically different approach to corporate management.
You probably don’t recognize all their names, but you’ve likely heard of their companies: General Cinema, Ralston Purina, Berkshire Hathaway, General Dynamics and Capital Cities Broadcasting.
″[‘The Outsiders’] is an outstanding book about CEOs who excelled at capital allocation,” Buffett wrote in 2012. “It has an insightful chapter on our director, Tom Murphy, overall the best business manager I’ve ever met.”
3. ‘Investing Between the Lines: How to Make Smarter Decisions by Decoding CEO Communications’
By L.J. Rittenhouse
Buffett recommended this title in his 2012 shareholder letter.
“So many books have been written on how to analyze a company, but so few have been written on how to analyze the person in control of a company,” -amazon review
4. ‘Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger’
Edited by Peter D. Kaufman
This book offers a collection of financial wisdom, speeches and essays written by Charlie Munger, Buffett’s longtime business partner and vice president of Berkshire.
One must read passage is “The Psychology of Human Misjudgment,” an essay in which he talks about the cognitive traps that investors fall into.
“Just buy a copy and carry it around; it will make you look urbane and erudite,” Buffett joked in a 2010 shareholder letter.
5. ‘Where Are the Customers’ Yachts? Or a Good Hard Look at Wall Street’
By Fred Schwed
Buffett recommended this book in his 2014 letter. He stated “This is the funniest book ever written about investing,” in 2006 . “It lightly delivers many truly important messages on the subject.”
In “Where Are the Customer Yachts?,” Fred Schwed exposes the hypocrisy of Wall Street through the story of a visitor to New York who admires the yachts of bankers and brokers. He then wonders where all the customers’ yachts have gone.
(Fact: They don’t have any because they can’t afford them — despite the fact that they followed the advice of their bankers and brokers.)