Editor’s note: This article was first published in September 2014. The phrases “the investing he has been doing for 57 years” and “the last 20 years of interviews” refer to 2014.
They say a person’s success is measured by the size of their library, while failure is measured by the size of their television. Warren Buffett says he still spends 80% of his time reading, although, as you might imagine, what he reads is about business management, business and investing, reading he considers necessary for anyone who wants to get ahead in life and build wealth.
As you would expect, his book recommendations include the much-cited The Intelligent Investor by Benjamin Graham, the bible of investing. It is a book every investor should read, regardless of the investment method they end up following. After every bad investment, you will find the explanation of your mistake in that book.
Recently we learned that Business Adventures by John Brooks was the best business book according to Bill Gates, who said he got the recommendation from Buffett.
But this legendary investor’s list of book recommendations is longer, and Drake Baer, a journalist at Business Insider, has compiled these recommendations from Buffett’s interviews and shareholder letters over the last 20 years.
3. Security Analysis, by Benjamin Graham and David Dodd
Security Analysis is another great work by Benjamin Graham. According to Buffett, this book gave him the roadmap for the investing he has been doing for 57 years. It is a follow-up to The Intelligent Investor, perhaps with a much wiser Graham, and it teaches how to carry out a complete analysis of the company you are going to invest in to work out the company’s value, giving us the much-needed margin of safety in an investment.
4. Common Stocks and Uncommon Profits, by Philip A. Fisher
We already included this book in our 5 recommended books for investors. Buffett has acknowledged that his investment method was 85% Benjamin Graham and 15% Fisher. The book covers topics such as when to buy, when to sell and when not to sell, as well as how to develop a solid investment philosophy suited to any economic context or investor profile. One of the most recommended books.
5. Jack: Straight from the Gut
Jack Welch is considered the best executive of the 20th century. In his 2001 letter to shareholders, Buffett recommended this book as one of the best business books, because of the long-term impact Welch has had on business, proving his worth during his leadership of General Electric. (Read also: 10 business lessons from Jack Welch)
6. Stress Test: Reflections on Financial Crises
Buffett says this book is required reading for any company manager, because many books have been written about how to manage a company in times of crisis, but never first-hand by a former Treasury Secretary.
7. The Outsiders
Forbes named this book one of the most important in America. Buffett praised it in his 2012 letter to shareholders as an outstanding book about CEOs who excelled, and it discusses Buffett’s own work at Berkshire Hathaway. The book describes many success patterns of great American executives.
Buffett’s recommendations also include a book by John Bogle, The Clash of the Cultures, which discusses intelligent (long-term) investing versus the pursuit of quick gains and impulsive investing. “Time is your friend; impulse is your enemy.” In it, Bogle, one of the best investors in history, explains how to take advantage of compound interest and how not to be lured by the market’s siren songs. Essentially, it is about investment versus speculation.
Further reading
- The 5 best books on financial education
- 3 books every business owner and leader should read
- The 2 best books for getting rich are more than 70 years old
Featured image: Lin Kristensen from New Jersey, USA, CC BY 2.0, via Wikimedia Commons.
