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By ERIK HOLM
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Warren Buffett is a voracious reader, and the legendary investor isn’t shy about sharing
his book recommendations. In television appearances, in frequent conversations with
students, and in his annual letters to shareholders of Berkshire Hathaway Inc., Mr.
Buffett can often be counted on to add another tome to an evergrowing reading list.
The chairman of the $350billion Berkshire conglomerate has gone so far as to handpick
4 British Stage and
Film Star Alan
many of the books sold at his company’s widely attended shareholder meeting in Rickman Dies at 69
Omaha, Neb. A local familyowned store, The Bookworm, sets up a popup location at
the meeting each year, and does brisk business in titles that Mr. Buffett recommends.
For Buffett acolytes looking for a little light reading ahead of the latest shareholder
meeting on Saturday, here are some of the highlights from Mr. Buffett’s bookshelf: 5 RBS Warns: Sell
Everything
The Intelligent Investor, by Benjamin Graham. Of this classic tome on value investing,
Mr. Buffett once wrote: “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
Show 5 More
his approach to investing, Mr. Buffett is liable to cite specific chapters from the
book. Advanced readers can move on to Security Analysis, by Mr. Graham and his
colleague David Dodd, a much longer tome upon which The Intelligent Investor is based.
Common Stocks and Uncommon Profits, by Philip A. Fisher. Though he wasn’t as
widely known to the investing public in his lifetime, Mr. Fisher ranks right up with Messrs.
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1/14/2016 11 Picks from Warren Buffett’s Bookshelf MoneyBeat WSJ
Graham, Dodd and Buffett in the pantheon of value investors. Mr. Buffett long ago said he
was so impressed by this book that he made a special effort to go meet Mr. Fisher, and
Mr. Buffett’s biographer, Alice Schroeder, credits Mr. Fisher with helping evolve Mr.
Buffett’s investing approach. In 2013, Mr. Buffett told shareholders that this book “ranks Investment Banking Scorecard
behind only The Intelligent Investor and the 1940 edition of Security Analysis in the all Updated January 14, 2016
timebest list for the serious investor.” The Dealogic and WSJ scorecard breaks down the investment
banking industry by region, product, bank and sector.
Business Adventures: Twelve Classic
Tales from the World of Wall Street, by Below shows yearonyear global volume and top 10 banks in $
John Brooks. Not long after Microsoft billions and global investment banking revenue and top 10 banks
Corp. MSFT +1.69% cofounder Bill Gates full year 2015 in $ millions:
first met Mr. Buffett back in 1991, Mr
Gates asked the Oracle of Omaha to
Equity Capital Markets $18.5 26%
recommend his favorite book about
business. As Mr. Gates recounted in the
Debt Capital Markets $224.0 18%
Journal last year, Mr. Buffett “didn’t miss
a beat” before naming this tome, a
Mergers & Acquisitions $65.6 38%
collection of New Yorker articles from the — John Keatley for The Wall Street Journal
1960s, and promised to send Mr. Gates
Investment Banking Revenue $1,607.9 30%
his personal copy. Mr. Gates, now a member of Berkshire’s board, says it’s the best
business book he’s ever read, lists Mr. Brooks as his favorite business writer… and admits
that he still has Mr. Buffett’s copy.
M&A ECM DCM IB
Where Are the Customers’ Yachts?, by Fred Schwed. Another decadesold 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 M&A Adviser Ranking
was told that they belonged to Wall Street bankers. He naively asked where the bankers’
Goldman Sachs
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 Morgan Stanley
important messages on the subject.” JPMorgan
BofA Merrill Lynch
Essays in Persuasion, by John Maynard Keynes. Mr. Buffett has flagged this collection
Citi
of writings from the noted economist both for the importance of its ideas and the clear way
Credit Suisse
they’re presented. The essays, written from 1919 to 1931, touch on a wide variety of
topics, including inflation, the gold standard, Russia and Germany, and the possibilities of Deutsche Bank
economic growth. While Mr. Keynes is now known–and in some quarters, vilified–for his Barclays
work as an economist, he also devoted a fair amount of thought to stock picking. Mr. Lazard
Bufett has deemed him “brilliant” at both callings. “Reading Keynes will make you smarter Centerview Part…
about securities and markets,” he told Outstanding Investor Digest in 1989. “I’m not sure In billions $0 $500 $1,000 $1,500$2,000
reading most economists would do the same.”
The Little Book of Common Sense Investing, by Jack Bogle. Mr. Buffett has heaped Source: Dealogic
accolades on a few books from Mr. Bogle over the years, but this was the most recent to See More Data » (http://graphics.wsj.com/investment
earn his praise, as Mr. Buffett gave it a shoutout just a few weeks ago. Mr. Bogle is the bankingscorecard/)
founder of the Vanguard Group and creator of the world’s first index mutual fund, and
The MoneyBeat Team
while this slim volume certainly spends time extolling the virtues of index investing, it also
Stephen Phillipa
explains why tangible business realities—like dividend yields and earnings growth—are Grocer LeightonJones
more important than market expectations. For the record, Mr. Buffett himself has Editor European Editor
frequently said most investors are better off buying lowcost index funds.
Poor Charlie’s Almanack: The Wit and
More In 50 Years at Berkshire
Wisdom of Charles T. Munger, edited
Scenes from Omaha: PingPong, Pets by Peter Kaufman. Mr. Buffett has Erik Holm Maureen Farrell
and More from the Berkshire Meeting steered the helm at Berkshire for the past Deputy Editor Reporter
New York
7 Takeaways From Berkshire's Annual 50 years, and alongside him for the whole
Meeting ride has been Charlie Munger, his vice
Recap: The 2015 Berkshire Hathaway chairman. Mr. Buffett hasn’t been shy
Annual Meeting about attributing much of Berkshire’s Paul Vigna Kristen Scholer
Reporter Reporter
50 Years of Warren Buffett in The Wall success to his righthand man–in no small
New York New York
Street Journal part for saying no to some of Mr. Buffett’s
Berkshire Shareholders Shopping Early stupider ideas. Mr. Munger is a deep
and Often in Omaha thinker on human behavior—and human
Giles Turner
frailties—and has spoken often about how
Reporter
investors can shoot themselves in the foot. This book collects Mr. Munger’s speeches and
London
other writings in an informal anthology. “You will never find a book with more useful ideas,”
Mr. Buffett once said. But while Berkshire’s chairman is known for his folksy demeanor,
Berkshire’s vice chairman can be somewhat more scathing, as evidenced by his
supposed reply to someone who asked him what he should do if he didn’t enjoy the book. MoneyBeat Columnists
“No problem,” Mr. Munger is said to have answered. “Just give it to someone more
intelligent.” Ronald Jason Zweig
Barusch The Intelligent
The Most Important Thing: Uncommon Sense for the Thoughtful Investor, by Howard Dealpolitik Investor
Marks. As a reviewer at Barron’s noted in 2011, Oak Tree Capital Chairman Howard
Marks planned to wait until he retired to write this book, but Mr. Buffett, a fan of Marks’
famous client memos, offered to contribute a dustjacket blurb if he would speed up his E.S.
publishing timetable. With that inducement, Mr. Marks produced a tome that explains the Browning
keys to successful investing and the pitfalls that can destroy capital. It borrows from the
memos that Mr. Buffett likes so much.
The Outsiders, by William Thorndike Jr. A book that has continued to gain prominent
followers in the years since Mr. Buffett mentioned it in his 2012 annual letter, Mr.
Thorndike makes the case that chief executives have no greater role than to determine
Newsletters
how to spend their company’s cash flow, whether reinvesting it in the business, spending
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1/14/2016 11 Picks from Warren Buffett’s Bookshelf MoneyBeat WSJ
it on acquisitions or returning it to shareholders. Those that do it best are like the best Morning MoneyBeat U.S. Morning MoneyBeat Europe
investors, he says: They buy low and sell high and earn massive shareholder returns over Morning MoneyBeat Asia
the longrun. Mr. Buffett called it “an outstanding book” and flagged a chapter about Tom
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Murphy, the longtime chairman of Capital Cities/ABC who’s now a Berkshire board
member. Mr. Buffett called Mr. Murphy “overall the best business manager I’ve ever met.”
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Dream Big, by Cristiane Correa. Originally published in Portuguese, this book earned
praise from Mr. Buffett at last year’s annual shareholder meeting–which prompted a run
on then hardtofind Englishlanguage print copies. It tells the story of the Brazilian trio
behind 3G Capital, the privateequity firm that owns AnheuserBusch 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.”
For a reading list that focuses more on Mr. Buffett himself, check out this list we put
together earlier this year.
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Comments (3 of 3) View all Comments »
5:29 pm November 23, 2015
Anonymous wrote:
Jack Nicholson you need to learn how to count!
2:17 pm May 22, 2015
Jack Nicholson wrote:
I count only 10.
8:29 am May 1, 2015
Serenity Stocks wrote:
Good list and nice to see The Intelligent Investor in the #1 spot as it should be.
Benjamin Graham also known as The Dean of Wall Street and The Father of Value Investing
was a scholar and financial analyst who mentored legendary investors such as Warren Buffett,
William J. Ruane, Irving Kahn and Walter J. Schloss.
Buffett describes Graham's book The Intelligent Investor as "by far the best book about
investing ever written" (in its preface).
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1/14/2016 11 Picks from Warren Buffett’s Bookshelf MoneyBeat WSJ
Graham's first recommended strategy for casual investors was to invest in Index stocks.
For more serious investors, Graham recommended three different categories of stocks
Defensive, Enterprising and NCAV and 17 qualitative and quantitative rules for identifying
them.
For advanced investors, Graham described various "special situations".
The first requires almost no analysis, and is easily accomplished today with a good S&P500
Index fund.
The last requires more than the average level of ability and experience. Such stocks are also not
amenable to impartial algorithmic analysis, and require a casespecific approach.
But Defensive, Enterprising and NCAV stocks can be reliably detected by today's datamining
software, and offer a great avenue for accurate automated analysis and profitable investment.
Warren Buffett once wrote a detailed article explaining how Graham's record of creating
exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles
are everlasting. The article is called "The Superinvestors of GrahamandDoddsville".
Thank you.
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