Warren Buffett is a voracious reader, and the legendary investor isn’t shy about sharing his book recommendations. When Buffett started his investing career, he would read 600, 750, or 1,000 pages a day. Even now, he still spends about 80% of his day reading.
The chairman of the $350-billion Berkshire conglomerate has gone so far as to hand-pick many of the books sold at his company’s widely attended shareholder meeting in Omaha, Neb.
Here are the 10 books recommended by Warren Buffett for the entrepreneurs,
In his 2001 shareholder letter, Buffett gleefully endorses “Jack: Straight From The Gut,” a business memoir of longtime GE exec Jack Welch, whom Buffett describes as “smart, energetic, hands-on.”
From layoffs to glory, Jack Welch tells his story of how General Electric went from the bottom of the stock pile to an investment worth having. Management tips are woven into personal stories about good and bad decisions with continual ripple effects, such as the Crotonville training center that moved students along the tiers of upper management. Welch puts feet on some of Peter Drucker’s favorite list of ideas, including the necessity of change and the need to build a corporation with the right people, instead of on the backs of people while bilking the customer. This business book has been included on business reading lists, from Hampden-Sydney College to Warren Buffet’s favourites of 2010.
After entering into a battle with cancer, Sam Walton decided to outline the shaky beginnings and roller-coaster ride of WalMart. The result is a zany blend of common-sense tips, quotable aphorisms, and true stories that outdo fiction by a long shot. Not surprisingly, the founder’s odyssey is featured on WalMart reading lists, as well as those of contributors to the Motley Fool (such as Jeremy MacNealy) and 800-CEO-Read. Walton is unapologetic about both his mistakes and his successes, and includes equal-time stories about zealous managers who moved at the drop of a hat to further the breakneck speed of grand openings across the United States.
A book that’s earned its spot on the New York Times bestseller book list, Cialdini has concentrated over 30 years of research into how and why people respond with a “yes” instead of a no. Forbes magazine hailed Cialdini’s work on their favorite “75 Smartest” business books list, with its explanation of how people feel obligated to return favors (reciprocity) and why commitment is so powerful. Charlie Munger, the co-chairman of Berkshire Hathaway and leader of Wesco Financial, also has a copy on his favorite reading list as one of the top three business books necessary for negotiation success.
Back in 1991, Bill Gates asked Buffett what his favourite book was. To reply, Buffett sent the Microsoft founder his personal copy of “Business Adventures,” a collection of New Yorker stories by John Brooks.
Gates says that the book serves as a reminder that the principles for building a winning business stay constant. He writes:
“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.”
The book has become a media darling as of late; Slate wrote that it’s “catnip for billionaires.”
Another entry on the Warren Buffet business book list is Berlin’s biography of Robert Noyce, who accomplished daring maneuvers in and out of the land of technology. Based on first-hand interviews of other key business leaders, including Steve Jobs and Gordon Moore, Berlin shows the approachable personality and keen insight of the man who developed the secret ingredient for our computer-based world: the integrated circuit. Sadly, Berlin also points out the personal flaws that detracted from the genius of Noyce, who co-founded Fairchild Semiconductor.
Buffett said that “Security Analysis,” another groundbreaking work of Graham’s, had given him “a road map for investing that I have now been following for 57 years.”
The book’s core insight: If your analysis is thorough enough, you can figure out the value of a company — and if the market knows the same. Buffett has said that Graham was the second-most influential figure in his life, after only his father.
“Ben was this incredible teacher; I mean he was a natural,” he said.
When Buffett was 19 years old, he picked up a copy of legendary Wall Streeter Benjamin Graham’s “Intelligent Investor.” It was the one of the luckiest moments of his life, he said, 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,” Buffett said.
“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.”
While investor Philip Fisher — who specialized in investing in innovative companies —didn’t shape Buffett in quite the same way as Graham did, he still holds him in the highest regard.
“I am an eager reader of whatever Phil has to say, and I recommend him to you,” Buffett said.
In “Common Stocks and Uncommon Profits,” Fisher emphasises that fixating on financial statements isn’t enough — you also need to evaluate a company’s management.
If you want to get to know the way Buffett thinks, go straight to the Sage himself. In this collection, he keeps it very real — in his signature folksy-intellectual fashion.
“What could be more advantageous in an intellectual contest — whether it be chess, bridge, or stock selection —than to have opponents who have been taught that thinking is a waste of energy?” Buffett asks.
In his 2012 shareholder letter Buffett praises “Outsiders” as “an outstanding book about CEOs who excelled at capital allocation.”
Berkshire Hathaway plays a major role in the book. One chapter is on director Tom Murphy, who Buffett says is “overall the best business manager I’ve ever met.”
The book — which finds patterns of success from execs at The Washington Post, Ralston Purina, and others — has been praised as “one of the most important business books in America” by Forbes.