Top 10 Favorite Books From Billionaire Warren Buffett

These are the 10 books Warren Buffett thinks everyone should read for having success in financial investments.

Considered to be the greatest investor of all time, Warren Buffet started from scratch to build a real financial empire with his Berkshire Hathaway company. His innate business acumen, his willpower and the application of a few simple principles have enabled him to become one of the richest men in the world. His success is fascinating and many people are looking for more information about his lifestyle and his ideas about the world today.

Nevertheless, Warren Buffett himself admits that too few people ask him about his favorite books. However, this great reader, who spends several hours reading every day, considers that reading has enabled him to achieve such success.

In the following, I therefore suggest that you revisit Warren Buffett’s 10 favorite books. These are the 10 books that Warren Buffett recommends to read to anyone who wants to be successful in financial investments.

1. The Intelligent Investor by Benjamin Graham

Warren Buffett simply considers that the book “The Intelligent Investor” written by economist Benjamin Graham in 1949 is by far the best book ever written on investment.

The Intelligent Investor by Benjamin Graham

Given the financial success that Warren Buffett has achieved, all investors should consider such a judgment and hasten to buy “The Intelligent Investor” to eat it up! This best-seller by Benjamin Graham details the philosophy of “value investing” that made Warren Buffett his fortune.

Over the years, the evolution of the market has proven the wisdom of Benjamin Graham’s strategies. A fan of the first hour of this book, Warren Buffett was invited to write the preface to the new edition. He wrote:

“To invest successfully does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding the framework.”

2. Security Analysis by Benjamin Graham and David L. Dodd

As a big fan of Benjamin Graham, Warren Buffett considers that the book “Security Analysis” he wrote with David L. Dodd in 1934 is an investment roadmap that he has been following for over 60 years. Successfully when we see the wealth that Warren Buffett has managed to accumulate.

Security Analysis by Benjamin Graham and David L. Dodd

Sold in excess of one million copies, “Security Analysis” has rocked entire generations of investors with “value investing” philosophy that is never out of date. While the book is over 85 years old, it is still relevant today because it has stood the test of time in a wide variety of market conditions, countries and asset classes.

Even better, the latest edition, based on the original 1934 edition, was enhanced with an additional 200 pages of comments from some of Wall Street’s leading current fund managers. These investment masters follow to the letter the “value investing” philosophy of Benjamin Graham and David L. Dodd allow the book to remain relevant even in the very different markets we know today.

3. Stress Test: Reflections on Financial Crises by Tim Geithner

Published in 2014, the book “Stress Test: Reflections on Financial Crises” is much more recent than Benjamin Graham’s two previously mentioned books. It was written by Tim Geithner who was Secretary of the Treasury during Barack Obama’s presidency. This book can be seen as an account of the unprecedented effort that has been made to save the American economy from the collapse following the 2008 crisis, the worst global financial crisis since the Great Depression.

Stress Test: Reflections on Financial Crises by Tim Geithner

For Warren Buffett, it is a book that every person involved in management must read. Throughout the book, Tim Geithner details the roles of the key actors Barack Obama, Ben Bernanke, Hank Paulson and Larry Summers and the various exchanges that took place during these delicate months following the 2008 crisis.

Finally, it examines in detail the political tensions that their efforts have created and how their actions have prevented a collapse of the American economy while ultimately leading to a loss of public confidence in the financial community and political elites.

4. Business Adventures by John Brooks

In 1991, a certain Bill Gates asked Warren Buffett what his favorite book was. In response, Warren Buffett sent Bill Gates his own version of “Business Adventures: Twelve Classic Tales from the World of Wall Street”. It is a book that brings together a number of stories published by John Brooks in the New Yorker in the 1920s and 1930s.

Business Adventures by John Brooks

This book quickly became one of Bill Gates’ favorite business books. Thus, he says that this book serves as a reminder of the principles for building a winning business that lasts. It even specifies:

“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.”

John Brooks’ “Business Adventures” has come back to the forefront in recent years and this is clearly no coincidence. If you’ve never read it, you know what you have to do.

5. The Little Book of Common Sense Investing by John Bogle

Founder of The Vanguard Group, John Bogle is a very important figure in finance, considered to be the father of index funds. Warren Buffett has always been a great admirer of his, so it was only natural that he recommended reading this book in his letter to shareholders in Berkshire Hathaway in 2014.

The Little Book of Common Sense Investing by John Bogle

Many consider the book “The Little Book of Common Sense Investing” as the investment bible offering new information, new perspectives and new points of view. In other words, this book is essential to a better understanding of the markets.

John Bogle describes the simplest and most effective investment strategy for building long-term wealth: buying and holding, at very low cost, a mutual fund that tracks a broad stock market index like the S&P 500.

6. Essays in Persuasion by John Maynard Keynes

Written by legendary author John Maynard Keynes in 1931, “Essays in Persuasion” is often considered one of the 100 greatest books of all time. Just that!

Essays in Persuasion by John Maynard Keynes

For Warren Buffett, this book is a must-read. He told the Investor Digest in 1989, among other things:

“Reading Keynes will make you smarter about securities and markets. I’m not sure most economists would do the same.”

This book also includes the famous essay “Economic Possibilities for Our Grandchildren” in which John Maynard Keynes predicted that the current generation would not work more than 15 hours a week… With the advent of robots and artificial intelligence, this prediction may very well prove true in the future.

In short, a classic to read and reread that the new generations must discover.

7. Common Stocks and Uncommon Profits by Philip Fisher

Widely respected and admired, Philip Fisher is one of the most influential investors of all time. Released in 1960, his book “Common Stocks and Uncommon Profits” highlights his investment philosophies. For many, his philosophy of markets is considered as gospel words. Philip Fisher considers that investing in a company is not just about focusing on the financial statements. It is also necessary to evaluate the management of a company.

Common Stocks and Uncommon Profits by Philip Fisher

Although Philip Fisher did not shape Warren Buffett’s thinking on investment in the same way as a Benjamin Graham, Warren Buffett holds him in high regard and recommends reading everything that comes from him. He says as follows:

“I’m an avid reader of everything Phil has to say, and I recommend it to you.”

If you want to succeed in financial investments, you know what you have to do.

8. Where Are the Customers’ Yachts? by Fred Schwed

Published in 1940 by Fred Schwed, “Where Are the Customers’ Yachts?” is a classic that exposes the madness and hypocrisy of the professional investment industry. This book is often cited by Warren Buffett and other leading investors as one of the most authentic, timeless, hilarious and true descriptions of Wall Street culture and investment firms.

Where Are the Customers’ Yachts? by Fred Schwed

For the record, the title of this book comes from a story about a visitor in New York who saw the yachts of bankers and brokers and then asked where the customers were.

Regarding this book by Fred Schwed, Warren Buffett said in 2006:

“The funniest book ever written about investment. He delivers many really important messages on this subject lightly.”

9. Take on the Street by Arthur Levitt

In his book “Take on the Street”, Arthur Levitt, Chairman of the Securities and Exchange Commission (SEC) for eight years during Bill Clinton’s presidency, provides a wealth of inside information that all investors need to know to protect themselves from Wall Street’s deliberately confusing actions.

Take on the Street by Arthur Levitt

As early as 2002, Warren Buffett explained how accounting standards and audit quality had deteriorated in recent years. As an example, he cited the fall of Arthur Andersen’s accounting.

He pointed out that all the light on this matter was shed on Arthur Levitt’s excellent book “Take on the Street”, which he strongly recommends to read.

10. The Clash of the Cultures by John Bogle

Released in 2012, John Bogle’s book “The Clash of the Cultures” perfectly explains how speculation has taken over from investment in what is a real clash of cultures. During his career, John Bogle has witnessed a real paradigm shift in terms of culture in the financial sector.

The Clash of the Cultures by John Bogle

Right from the book’s release, Warren Buffett strongly recommended it to all investors looking for long-term success. In particular, he shares John Bogle’s view that long-term value-based investment has been crowded out by a culture of aggressive and value-destroying short-term speculation.

At the end of the book, John Bogle calls for a return to the principles of common sense and long-term investment. Warren Buffett stresses in particular the importance of the following two points highlighted by John Bogle:

Remember reversion to the mean. What is hot today is probably not going to be hot tomorrow. The stock market always returns to long-term fundamental returns. Don’t follow the herd like a sheep. Time is your friend, impulse is your enemy. Enjoy compound interest and don’t be captivated by the sound of market sirens. The famous song that only attracts you to buy when stocks soar and sell after they fall.

Conclusion

Warren Buffett’s phenomenal success in financial investments is no coincidence. It stems from a very specific investment philosophy composed of a number of simple rules that he has followed throughout his life. The favorite books he recommends have helped him, and will help you, to develop this winning “value investing” philosophy that lets to make long-term profitable investments.

At the end of the day, very big profits for those who will have the intelligence to bet on value and especially the long term without being tempted by the sirens of the stock markets.