Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has inspired countless books over the years. While Buffett himself has never authored a book, his life, investment strategies, and philosophies have been extensively studied and documented by others. These books offer valuable insights for investors of all levels, from beginners to seasoned professionals. In this comprehensive article, we will explore the best Warren Buffett books that every investor should read.
Table of Contents
Best Warren Buffett Books
The Intelligent Investor by Benjamin Graham
No discussion of the best Warren Buffett books would be complete without mentioning “The Intelligent Investor” by Benjamin Graham. This book, which Buffett has called “the best book about investing ever written,” is a must-read for any investor looking to learn from the master himself.
In “The Intelligent Investor,” Graham lays out his principles of value investing, which focus on buying stocks at a significant discount to their intrinsic value. He emphasizes the importance of having a margin of safety, which means not investing unless the intrinsic value of a stock is at least 10% higher than the market price.
Buffett has said that reading “The Intelligent Investor” was one of the luckiest moments of his life, as it gave him the intellectual framework for investing. He has followed Graham’s principles for over 50 years, and they have served him well.
Security Analysis by Benjamin Graham and David Dodd
Another essential read for any Warren Buffett fan is “Security Analysis” by Benjamin Graham and David Dodd. This book, which was first published in 1934, is considered a classic in the field of investment analysis.In “Security Analysis,” Graham and Dodd provide a detailed framework for analyzing the value of a company’s stock.
They emphasize the importance of looking beyond the financial statements and considering factors such as the company’s competitive position, management, and growth prospects.Buffett has said that “Security Analysis” gave him “a road map for investing that I have now been following for 57 years.” He has praised the book for its clear and precise prescriptions for making investment decisions.
The Essays of Warren Buffett: Lessons for Corporate America by Warren Buffett and Lawrence Cunningham
While Buffett has never written a book himself, his annual shareholder letters to Berkshire Hathaway investors are widely regarded as some of the best investment writing ever produced. In “The Essays of Warren Buffett: Lessons for Corporate America,” Lawrence Cunningham has compiled and organized these letters into a cohesive book that offers valuable insights into Buffett’s investment philosophy.
The book covers a wide range of topics, including Buffett’s views on value investing, corporate governance, and the importance of having a strong corporate culture. It also includes case studies of some of Buffett’s most successful investments, such as Coca-Cola and American Express.
One of the key takeaways from “The Essays of Warren Buffett” is Buffett’s emphasis on investing in businesses that you understand. He has said that he only invests in companies that he can explain to his sister Doris, who he describes as “a very bright woman, but a non-business person.”
The Warren Buffett Way by Robert G. Hagstrom
For investors looking for a more comprehensive overview of Buffett’s investment strategies, “The Warren Buffett Way” by Robert G. Hagstrom is an excellent choice. First published in 1994, this book has become a classic in its own right, with a third edition released in 2013.
In “The Warren Buffett Way,” Hagstrom lays out the principles that Buffett follows in investing, and walks the reader through them with case studies from Buffett’s own investment portfolio. These include well-known rules like buying businesses you understand and ignoring Mr. Market (an imaginary, emotional investor devised by Benjamin Graham), along with many others.
One of the strengths of “The Warren Buffett Way” is its accessibility. Hagstrom writes in a clear and engaging style, making complex investment concepts easy to understand. The book is a great read for investors just starting out, and it continues to be a good read even when you think you know what you’re doing.
The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers by Robert P. Miles
While most books about Warren Buffett focus on his investment strategies, “The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers” by Robert P. Miles takes a different approach. Published in 2003, this book looks at Buffett’s role as a leader and manager of Berkshire Hathaway’s many subsidiaries.
The book describes how Buffett selects the CEOs for Berkshire’s subsidiaries and how he oversees them. It tells this story through the eyes of the Berkshire executives themselves, offering valuable insights into Buffett’s management style and the qualities he looks for in a CEO.
One of the key takeaways from “The Warren Buffett CEO” is that Buffett is not just a great investor, but also a great manager. He has built Berkshire Hathaway into a conglomerate with over 60 subsidiaries by selecting talented CEOs and giving them the autonomy to run their businesses.
Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street by Janet Tavakoli
“Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street” by Janet Tavakoli offers a unique perspective on Warren Buffett’s investment philosophy. Tavakoli, a structured finance expert, met with Buffett and, following the financial crisis of 2008, started to put greater value on his value investing methods.The book provides insights into Buffett’s approach to investing, as well as his views on the financial crisis and the systematic abuses that led to it.
Tavakoli’s background as a structured finance expert gives her a unique vantage point from which to analyze Buffett’s investment strategies.One of the strengths of “Dear Mr. Buffett” is its readability. Tavakoli writes in a conversational style that makes complex investment concepts easy to understand. The book is a pleasure to read, and it offers valuable lessons for investors of all levels.
Common Stocks and Uncommon Profits by Philip Fisher
While Benjamin Graham is often cited as the primary influence on Warren Buffett’s investment philosophy, Philip Fisher’s “Common Stocks and Uncommon Profits” has also had a significant impact. Published in 1958, this book is considered a classic in the field of growth investing.In “Common Stocks and Uncommon Profits,” Fisher emphasizes the importance of investing in high-quality companies with strong growth prospects.
He argues that fixating on financial statements isn’t enough – you also need to understand a company’s competitive position, management, and growth potential.Buffett has said that he is “an eager reader of whatever Phil has to say, and I recommend him to you.” While he doesn’t follow Fisher’s principles as closely as Graham’s, he has incorporated many of Fisher’s ideas into his own investment approach.
Buffett: The Making of an American Capitalist by Roger Lowenstein
For investors who want to learn more about Warren Buffett’s life and career, “Buffett: The Making of an American Capitalist” by Roger Lowenstein is an excellent choice. Published in 1995, this biography offers a detailed look at Buffett’s life, from his childhood in Omaha to his rise to become one of the wealthiest people in the world.The book provides valuable insights into Buffett’s personality and the factors that have shaped his investment philosophy.
It also offers a behind-the-scenes look at some of Buffett’s most famous investments, such as his purchase of GEICO and his investment in The Washington Post.One of the strengths of “Buffett: The Making of an American Capitalist” is its readability. Lowenstein writes in a engaging style that makes the book hard to put down. The book is a must-read for anyone who wants to understand the man behind the legend.
The Little Book of Common Sense Investing by John C. Bogle
While Warren Buffett is best known for his success in picking individual stocks, he has also been a vocal advocate of index investing. In “The Little Book of Common Sense Investing,” John C. Bogle, the founder of Vanguard, makes a compelling case for investing in low-cost index funds.
Bogle argues that most investors are better off investing in a broad index fund that tracks the overall stock market, rather than trying to pick individual stocks or actively managed funds. He points to the high costs and poor performance of most actively managed funds as evidence that index investing is the best way for most people to achieve their financial goals.
Buffett has endorsed Bogle’s approach, writing in his 2014 shareholder letter that “when trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients.” He has also said that “the best way to own common stocks is through an index fund that charges minimal fees.”
The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike
In “The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success,” William N. Thorndike profiles eight CEOs who have achieved remarkable success by following a different playbook than their peers.
One of the CEOs profiled in the book is Warren Buffett.Thorndike argues that these “outsider” CEOs share a common set of traits, including a focus on capital allocation, a willingness to go against the grain, and a long-term orientation.
He shows how these traits have enabled them to create value for their shareholders over the long term.Buffett has praised “The Outsiders” as “an outstanding book about CEOs who excelled at capital allocation.” He has said that the book offers valuable lessons for anyone interested in investing or running a business.
Conclusion
Warren Buffett’s investment philosophy has been shaped by a wide range of books and thinkers, from Benjamin Graham to Philip Fisher to John Bogle. While Buffett has never written a book himself, his life and investment strategies have been extensively studied and documented by others.The books discussed in this article offer valuable insights into Buffett’s approach to investing and running a business. They cover a wide range of topics, from value investing to capital allocation to index investing.
