Warren Buffett: 11 Books That Made Me MILLIONS (Must READ)

Summary

In this video, the host discusses 11 books recommended by Warren Buffett for investors, emphasizing their significance in shaping investment strategies. Titles include 'Common Stocks and Uncommon Profits' by Philip A. Fisher, 'The Intelligent Investor' by Benjamin Graham, and 'Poor Charlie’s Almanack' featuring insights from Charlie Munger. The list reflects Buffett's belief in value investing, the importance of understanding business fundamentals, and the wisdom of long-term, rational investment approaches.

Takeaways

• 📚 Warren Buffett recommends 11 essential books for investors, reflecting his belief in the importance of reading and learning from the past.
• 🧐 Buffett spends 80% of his day reading, emphasizing the value he places on continuous education and knowledge acquisition.
• 💡 'Common Stocks and Uncommon Profits' by Philip A. Fisher is highlighted for its influence on Buffett's investment strategies, especially the importance of in-depth company research.
• 🏛 'Business Adventures' by John Brooks is Buffett's recommended read on business, offering timeless insights into corporate life and financial markets.
• 🤣 'Where Are the Customers’ Yachts?' by Fred Schwed uses humor to critique Wall Street, a book Buffett finds both funny and insightful about the realities of investing.
• 📈 'Essays in Persuasion' by John Maynard Keynes is recognized for its economic foresight and relevance to understanding securities and markets.
• 📊 'The Little Book of Common Sense Investing' by Jack Bogle promotes the concept of low-cost, passive index funds as a sound investment strategy, aligning with Buffett's views on investing simplicity.
• 🤝 'Poor Charlie’s Almanack' captures the wisdom of Charlie Munger, Buffett's partner, and his unconventional approach to life and investing.
• 📘 'The Intelligent Investor' by Benjamin Graham is considered the bible of investing and was instrumental in shaping Buffett's value investing philosophy.
• 🔑 'The Most Important Thing' by Howard Marks discusses key investment concepts, including the importance of second-level thinking and defensive investing.
• 🏆 'The Outsiders' by William Thorndike Jr. celebrates CEOs who achieved exceptional performance by taking a unique approach to corporate management.
• 🌐 'The Clash of the Cultures' by John Bogle addresses the shift in the mutual fund industry and offers 10 common-sense rules for investing.
• 🌟 'Dream Big' by Cristiane Correa tells the story of 3G Capital, a firm that has partnered with Berkshire Hathaway, and is praised by Buffett for its business acumen.

Q & A

What is the full name of Warren Buffett?

Warren Edward Buffett.

What percentage of his day does Warren Buffett reportedly spend reading?

Warren Buffett spends 80% of his day reading.

Which book did Warren Buffett recommend to Bill Gates as his favorite about business?

Buffett recommended 'Business Adventures: Twelve Classic Tales from the World of Wall Street' by John Brooks to Bill Gates.

What is the title of the book that Warren Buffett called 'the funniest book ever written about investing'?

The book is 'Where Are the Customers’ Yachts?' by Fred Schwed.

What economic concept does John Maynard Keynes explore in his book 'Essays in Persuasion'?

Keynes explores economic fluctuations and their impact on the economies of Europe and the United States, as well as the possibilities of economic growth.

What is the significance of the first index fund created by Jack Bogle?

Jack Bogle's creation of the first index fund introduced a low-cost, passive investing strategy that has become a prevailing investment idea and led to the establishment of one of the most respected investment companies in the world.

Who is Charles T. Munger and what is his relationship to Warren Buffett?

Charles T. Munger is the Vice President of Berkshire Hathaway and is described by Warren Buffett as his closest partner and right-hand man.

What book is considered the bible of investing and had a profound impact on Warren Buffett's investment philosophy?

The Intelligent Investor by Benjamin Graham is considered the bible of investing and greatly influenced Buffett's investment approach.

What is the main investment strategy Howard Marks discusses in 'The Most Important Thing: Uncommon Sense for the Thoughtful Investor'?

Howard Marks discusses value investing and the importance of understanding the complexities of investing and the perils of the financial world.

What is the central theme of the book 'The Outsiders' by William Thorndike Jr.?

The book 'The Outsiders' details the success of CEOs who took a radically different approach to corporate management, focusing on their traits and methods that led to exceptional performance.

What is the main message of John Bogle's book 'The Clash of the Cultures: Investment vs. Speculation'?

Bogle's book emphasizes the importance of 'Common Sense Investing' and shares a list of 10 simple rules for regular investors to follow, advocating for a strategy that is more reliable than many others.

What story does 'Dream Big' by Cristiane Correa tell and why is it significant to Warren Buffett?

The book tells the story of the Brazilian trio behind 3G Capital, a private-equity firm with which Berkshire has partnered on several deals. Buffett's relationship with 3G's Jorge Paulo Lemann is long-standing, and he considers Lemann and his team to be among the best businessmen in the world.

Outlines

00:00

📚 Warren Buffett's Essential Reading List

This paragraph introduces a list of 11 books recommended by Warren Buffett for investors. It highlights Buffett's passion for reading and how he shares exceptional reads through his shareholder letters and annual meetings. The paragraph also mentions the first book on the list, 'Common Stocks and Uncommon Profits' by Philip A. Fisher, emphasizing its focus on growth-oriented businesses and the importance of in-depth research in investment decisions.

05:03

📈 Influential Works on Investing and Economics

The second paragraph delves into several influential books that have shaped investment strategies and economic thought. It includes 'Business Adventures' by John Brooks, known as Buffett's favorite business book; 'Where Are the Customers' Yachts?' by Fred Schwed, a humorous critique of Wall Street; and 'Essays in Persuasion' by John Maynard Keynes, which Buffett appreciates for its clarity and depth in economic ideas. Additionally, it mentions 'The Little Book of Common Sense Investing' by Jack Bogle, advocating for low-cost index funds, and 'Poor Charlie’s Almanack,' a collection of wisdom from Buffett's partner, Charles T. Munger.

10:04

🛠️ The Foundations of Value Investing

This section discusses the significance of 'The Intelligent Investor' by Benjamin Graham, a foundational text in value investing that greatly influenced Buffett's approach. It also introduces 'The Most Important Thing' by Howard Marks, which offers insights on investment philosophy and risk assessment. The paragraph underscores the importance of understanding market value and the long-term performance of companies over short-term market fluctuations.

🌟 Exceptional Leadership in Business

The final paragraph highlights books that focus on exceptional business leadership and unconventional management strategies. 'The Outsiders' by William Thorndike Jr. examines CEOs who achieved outstanding results by avoiding Wall Street trends, while 'The Clash of the Cultures' by John Bogle contrasts investment with speculation, offering common-sense investment rules. Lastly, 'Dream Big' by Cristiane Correa tells the story of 3G Capital, a private-equity firm with a partnership with Berkshire Hathaway, illustrating the success of its business approach.

Keywords

💡Warren Buffett

Warren Buffett is a renowned American investor, business tycoon, and philanthropist. He is the chairman and largest shareholder of Berkshire Hathaway and is often referred to as the 'Oracle of Omaha' due to his investment acumen. In the video, Buffett's recommendations of books for investors highlight his influence and the value of his insights.

💡Investment Philosophy

Investment philosophy refers to a set of principles that guide an investor's approach to making investment decisions. In the video, the books recommended by Buffett reflect various investment philosophies, such as value investing and the importance of research and understanding of businesses.

💡Value Investing

Value investing is an investment strategy that involves selecting stocks that appear to be trading for less than their intrinsic value. The video mentions this concept in relation to books like 'The Intelligent Investor' by Benjamin Graham, which is foundational to Buffett's own investment approach.

💡Index Funds

Index funds are a type of mutual fund with a portfolio constructed to match or track the components of a financial market index, such as the S&P 500. The video discusses 'The Little Book of Common Sense Investing' by Jack Bogle, who is credited with creating the first index fund and advocating for low-cost, passive investing strategies.

💡Common Stocks and Uncommon Profits

This is a book by Philip A. Fisher that emphasizes the importance of investing in companies with growth potential, high profit margins, and other positive attributes. It is mentioned in the video as a key text that influenced Buffett's investment strategies.

💡Business Adventures

A collection of New Yorker articles from the 1960s by John Brooks, 'Business Adventures' is highlighted in the video as Buffett's favorite book about business. It provides historical accounts of corporate life and financial market events that are still relevant today.

💡Economic Fluctuations

Economic fluctuations refer to the periodic changes in economic activity, typically measured as the rise and fall of Gross Domestic Product (GDP). In the video, John Maynard Keynes's 'Essays in Persuasion' is discussed, where he forecasted such fluctuations and proposed measures to mitigate them.

💡Charlie Munger

Charles T. Munger is the Vice Chairman of Berkshire Hathaway and a close partner of Warren Buffett. The video mentions 'Poor Charlie’s Almanack,' which compiles Munger's wisdom on life, decision-making, and investing, reflecting his significant influence on Buffett's investment decisions.

💡Benjamin Graham

Benjamin Graham is considered the father of value investing and author of 'The Intelligent Investor,' a book that deeply influenced Buffett. The video describes it as the bible of investing and a key text for understanding value investing principles.

💡Howard Marks

Howard Marks is an American investor and author of 'The Most Important Thing: Uncommon Sense for the Thoughtful Investor.' The video discusses his book, which outlines the keys to successful investment and the importance of critical thinking in the financial world.

💡The Outsiders

This book by William Thorndike Jr., mentioned in the video, details the success of CEOs who took unconventional approaches to corporate management. It was highly recommended by Buffett in his 2012 Berkshire Hathaway shareholder letter.

Highlights

Warren Buffett recommends 11 books essential for investors, reflecting his belief in the importance of reading.

Buffett spends 80% of his day reading and often shares exceptional books through shareholder letters and annual meetings.

Philip A. Fisher's 'Common Stocks and Uncommon Profits' emphasizes the significance of business networking and information gathering for investment decisions.

Fisher's investment philosophies are considered gospel, focusing on growth-oriented businesses with high profit margins and commitment to R&D.

John Brooks' 'Business Adventures' is Buffett's favorite book about business, offering timeless insights into corporate life through New Yorker articles.

Fred Schwed's 'Where Are the Customers’ Yachts?' humorously critiques Wall Street, highlighting the disparity between brokers' wealth and their clients.

John Maynard Keynes' 'Essays in Persuasion' showcases his economic forecasts and influence on events from 1919-1940, deemed brilliant by Buffett.

Jack Bogle's 'The Little Book of Common Sense Investing' advocates for low-cost, passive index funds as a sustainable investment strategy.

Charles T. Munger's 'Poor Charlie’s Almanack' provides wisdom on life, decision-making, and investing from Buffett's partner and Vice President of Berkshire Hathaway.

Benjamin Graham's 'The Intelligent Investor' is the bible of investing, teaching value investing strategies that focus on long-term business performance.

Howard Marks' 'The Most Important Thing' details the keys to successful investment, emphasizing the complexities and perils of the financial world.

William Thorndike Jr.'s 'The Outsiders' reveals the success of CEOs who took a different approach to corporate management, achieving exceptional performance.

John Bogle's 'The Clash of the Cultures: Investment vs. Speculation' discusses the changing culture in the mutual fund industry and offers 10 common sense investing rules.

Cristiane Correa's 'Dream Big' tells the story of 3G Capital and its partnership with Berkshire Hathaway, inspiring Buffett and offering insights into successful business practices.

Buffett's middle name, Edward, is a lesser-known fact, prompting a call for audience engagement in the video.

The video concludes with a call to action, encouraging viewers to like the video if they enjoyed the content.

Transcripts

Today’s we are

going to talk about 11 books that Warren Buffett recommends every investor must read. First

quick side note, did you guys know Buffett’s full name is Warren Edward Buffett. I have

been following him for a while and I just learned his middle name. Comment down below

if you actually knew his middle name.

Anyways back to the video. You might ask how do we know that Buffett’s actually recommended

all books in this list. Well as most you might already know, Buffett is an avid reader himself.

He spends 80% of his day reading. So whenever he finds an exceptional book, he usually shares

it through his shareholders letters or at his annual meetings.

So let's jump right into what these books are.

Common Stocks and Uncommon Profits, by Philip A. Fisher.

Widely respected and admired, Philip Fisher is among the most influential investors of

all time. His investment philosophies, introduced almost forty years ago, are not only studied

and applied by today's financiers and investors, but are also regarded by many as gospel. His

book, Common Stocks and Uncommon Profits, published in 1958, devotes careful attention

to this concept of networking and gathering information via business contacts. Fisher

recommended targeting businesses for investment that had growth orientation, high profit margins,

high return on capital, a commitment to research and development, a superior sales organization,

a leading industry position, and proprietary products or services. He was famous for the

depth of his research on companies with which he would invest. He relied on personal connections,

what he called the “business grapevine”, and conversation to learn about businesses

before buying stock. Warren Buffett said - A thorough understanding of the business, obtained

by using Phil's techniques, enables one to make intelligent investment commitments.

Business Adventures: Twelve Classic Tales from the World of Wall Street, by John Brooks.

Not long after Microsoft Corp . co-founder Bill Gates first met Mr. Buffett back in 1991,

Mr Gates asked the Oracle of Omaha to recommend his favorite book about business. As Mr. Gates

recounted, Mr. Buffett “ didn't miss a beat ” before naming this tome, a collection

of New Yorker articles from the 1960s. The book contains notable and fascinating accounts

of some of the largest companies of the mid 1900s that are as relevant today to understanding

the intricacies of corporate life as they were when the events happened. Stories about

Wall Street are infused with drama and adventure and reveal the machinations and volatile nature

of the world of finance. John Brooks's insightful reportage is so full of personality and critical

detail that whether he is looking at the astounding market crash of 1962, the collapse of a well-known

brokerage firm, or the bold attempt by American bankers to save the British pound, one gets

the sense that history really does repeat itself.

Where Are the Customers’ Yachts? by Fred Schwed.

Another decades-old classic, this book uses humor to pierce some of the pretensions of

Wall Street. The title comes from the story of a visitor to New York who was admiring

all the nice boats in the harbor, and was told that they belonged to Wall Street bankers.

He naively asked where the bankers' clients kept their boats. The answer: They couldn't

afford them. Mr. Buffett once called it "the funniest book ever written about investing,"

and said it "lightly delivers many truly important messages on the subject."

Full of wise contrarian advice and offering a true look at the world of investing, in

which brokers get rich while their customers go broke, this book continues to open the

eyes of investors to the reality of Wall Street. A light, fun read and something you’d definitely

want to pick up to have a laugh and more importantly, learn about the world of brokers and managers

so you don’t lose out on your money.

Essays in Persuasion, by John Maynard Keynes Essays In Persuasion written by legendary

author John Maynard Keynes is widely considered to be one of the top 100 greatest books of

all time. The essays in this volume show Keynes's attempts to influence the course of events

by public persuasion over the period of 1919-40. With startling accuracy Keynes forecast the

economic fluctuations that were to beset the economies of Europe and the United States

and even proposed measures which, if heeded at the time, might have warded off an era

of world-wide depression. His views on Soviet Russia, on the decline of laissez-faire, and

the possibilities of economic growth are as relevant today as when Keynes originally set

them forth. Mr. Buffett has flagged this collection of writings from the noted economist both

for the importance of its ideas and the clear way they're presented. While Mr. Keynes is

now known--and in some quarters, vilified--for his work as an economist, he also devoted

a fair amount of thought to stock picking. Mr. Bufett has deemed him "brilliant" at both

callings. "Reading Keynes will make you smarter about securities and markets," he told Outstanding

Investor Digest in 1989. "I'm not sure reading most economists would do the same."

The Little Book of Common Sense Investing, by Jack Bogle.

Jack Bogle, the CEO of the Vanguard group is a prolific investor best known for creating

the first index fund. An author of multiple books, The Little Book of Common Sense Investing

is probably his most famous work. In a time when everyone tried to beat the market with

great stock picks and then charge expensive fees for it, he thought: “Why not just mimic

what the indexes are doing and not manage anything?” This little thought turned into

one of the most prevailing investment ideas of the following century, and one of the most

respected investment companies in the world.The book shows you an alternative to actively,

poorly managed, overpaid funds by introducing you to low-cost, passive index funds as a

sustainable investing strategy, which gets you the retirement savings you need without

the usual hassle of stock investing. He claims that the majority of your money is best invested

in safe, low-cost index funds and you can’t go wrong by just choosing the cheapest index

fund. For the record, Mr. Buffett himself has frequently said most investors are better

off buying low-cost index funds.

Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger, edited by Peter Kaufman

This is a book very close to Mr.Buffett. It comes from Charles Munger, the Vice President

of Berkshire Hathaway, a man Warren Buffett described as his closest partner and right-hand

man. Mr. Buffett hasn’t been shy about attributing much of Berkshire’s success to his right-hand

man–in no small part for saying no to some of Mr. Buffett's stupider ideas. Mr. Munger

is a deep thinker on human behavior—and human frailties—and has spoken often about

how investors can shoot themselves in the foot. This book is a biography that chronicles

Charlie’s growth from his humble Omaha childhood to his phenomenal financial success. His Midwest

values prepared him well for his long illustrious journey. The book also summarises his approach

to life, decision-making, learning, and investing. It talks about his unconventional method of

thinking and his astonishing work ethic, that is, the twin fonts of his remarkable success.

There is a special Mungerisms: Charlie Unscripted section that holds a collection of scathing

remarks he had made at previous Wesco Financial and Berkshire Hathaway annual meetings. This

book also includes the talks and speeches that he had given in a specific twenty-year

period. The book not only will help you with direct tips on investment, but reading through

Mr. Munger’s experiences will definitely help you hone your investing skills and to

identify better investments. The Intelligent Investor, by Benjamin Graham.

If you are watching this video, I am 100% sure you already know this book. It’s considered

the bible of investing. The book that started it all for Buffett. A classic on the basics

of value investing, Warren Buffett once said about the book “Picking up that book was

one of the luckiest moments in my life”. After reading it, Mr. Buffett enrolled in

Columbia University so he could take classes from Mr. Graham, and later went on to work

for him. Even now, when asked a question about his approach to investing, Mr. Buffett is

liable to cite specific chapters from the book. The book teaches readers strategies

on how to successfully use value investing in the stock market. The Intelligent Investor

is notable today, with many famous investors praising it for helping them learn how to

determine value in the stock market and successfully pick stocks for their portfolios. Graham’s

main investment approach outlined in The Intelligent Investor is that of value investing. Value

investing is an investment strategy that targets undervalued stocks of companies that have

the capabilities as businesses to perform well in the long run. Value investing is not

concerned with short term trends in the market or daily movements of stocks. This is because

value investing strategies believe the market overreacts to price changes in the short term,

without taking into account a company’s fundamentals for long-term growth. In its

most basic terms, value investing is based on the premise that if you know the true value

of a stock, then you can save lots of money if you can buy that stock on sale. This book

is an absolute must read for starters to understand how to truly evaluate the market and not be

swayed by trends.

The Most Important Thing: Uncommon Sense for the Thoughtful Investor, by Howard Marks.

Howard Stanley Marks is an American investor and writer. He is the co-founder and co-chairman

of Oaktree Capital Management, the largest investor in distressed securities worldwide.

The Most Important Thing explains the keys to successful investment and the pitfalls

that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate

his ideas, Marks teaches by example, detailing the development of an investment philosophy

that fully acknowledges the complexities of investing and the perils of the financial

world. Brilliantly applying insight to today's volatile markets, Marks offers a volume that

is part memoir, part creed, with a number of broad takeaways. Marks expounds on such

concepts as "second-level thinking," the price/value relationship, patient opportunism, and defensive

investing. Frankly and honestly assessing his own decisions--and occasional missteps--he

provides valuable lessons for critical thinking, risk assessment, and investment strategy.

In today’s post-pandemic global market where companies are still finding their footing,

these are important values to find a solid investment.

The Outsiders, by William Thorndike Jr. A book that was #1 on Warren Buffett’s Recommended

Reading List on the Berkshire Hathaway Annual Shareholder Letter 2012, The Outsiders details

the extraordinary success of CEOs who took a radically different approach to corporate

management. In this refreshing, counterintuitive book, author Will Thorndike brings to bear

the analytical wisdom of a successful career in investing, closely evaluating the performance

of companies and their leaders. Thorndike talks about eight individualistic CEOs whose

firms’ average returns outperformed the S&P 500 by a factor of twenty—in other words,

an investment of $10,000 with each of these CEOs, on average, would have been worth over

$1.5 million twenty-five years later. Some of the companies on this list are highly recognisable

names like The Washington Post Company, Berkshire Hathaway, General Dynamics and more. Humble,

unassuming, and often frugal, these "outsiders” shunned Wall Street and the press, and shied

away from the hottest new management trends. This book is a must read to learn the traits

and methods—striking for their consistency and relentless rationality—that helped these

unique leaders achieve such exceptional performance.

The Clash of the Cultures: Investment vs. Speculation

This is another book from Buffett’s 2012 letter. In this Book, Legendary Investor John

Bogle talks about the changing culture in the mutual fund industry. For regular investors

like you and I, Bogle shares his list of 10 simple rules of “Common senses investing.”

According to Bogle, it “may not be the best strategy ever devised. But the number of strategies

that are worse is infinite.”

Dream Big by Cristiane Correa This book was original published in protugese

and after buffett’s recommnedation, English Copies of the book were virtually sold out

from every store. In this book Author Shares the story of the Brazilian trio behind 3G

Capital, the private-equity firm that owns Anheuser-Busch InBev and has partnered with

Berkshire on deals to acquire H.J. Heinz and Kraft Foods Group Inc. While Berkshire's partnerships

with the firm are recent, Mr. Buffett's relationship with 3G's Jorge Paulo Lemann go back for years.

"My friend - and now partner - Jorge Paulo and his team are among the best businessmen

in the world," Mr. Buffett said. "He is a fantastic person and his story should be an

inspiration to everybody, as it is for me."

That’s it for today, smash that like button if you enjoyed the video