Investing

Warren Buffett Reading List: 15 Investing Books Recommended by the Oracle of Omaha

Warren Buffet Reading List
Some links included here are from our sponsors. Please read our affiliate disclaimer for more information.

With a net worth of $73.2 billion, Warren Buffett is the fourth wealthiest person in the world and one of the most successful investors of all time. 

He cites his love for reading as the foundation for much of that achievement, and in the 2017 HBO documentary Becoming Warren Buffett, the then 86-year-old Berkshire Hathaway chairman and CEO claimed to still spend “five or six hours a day reading.”

These days, he uses those hours to read general and financial news publications, along with as many as 500 pages of corporate reports each workday. 

However, Buffett has read a substantial number of books over his lifetime — most of them related to business, economics and investing (as well as many biographies).

Below is a reading list that features some of Buffett’s favorite and most frequently recommended finance and investing texts, listed in chronological order based on original release date.

The books on this list span nearly seven decades, with the first having been published shortly after the onset of the Great Depression.

As such, reading each of these recommendations will give you valuable insight into not only Buffett’s personal investing philosophy, but also into the evolution of investing thought and theory over time.

#1. Essays in Persuasion

Author: John Maynard Keynes
First published in: 1931
Synopsis: A collection of essays discussing various early-20th-century economic issues and how to solve them.

John Maynard Keynes - Essays in Persuasion

John Maynard Keynes was a British economist who was largely responsible for the post-WW2 economic order — now known as “Keynesian economics” (which he developed during the Great Depression). 

Essays in Persuasion is a collection of Keynes’ essays in which he explores the various economic issues of his time.

Keynes covers topics such as post-WW1 European reconstruction, the Great Depression, the Russian Revolution, the Gold Standard and laissez-faire economics.

In each essay, Keynes tries to explain what he believed to be the right solution for each economic problem.

Discussing the recommendation in 1989, Buffett told Outstanding Investor Digest, “Reading Keynes will make you smarter about securities and markets, I’m not sure reading most economists would do the same.”

Consider this high praise for an economics book, as both Buffett and his longtime partner Charlie Munger have been critical of the field. Buffett was even quoted as saying:

“I don’t pay any attention to what economists say, frankly, Well, think about it. You have all these economists with 160 IQs that spend their life studying it, can you name me one super-wealthy economist that’s ever made money out of securities? No.”

Why is Keynes an exception? Simply put, he’s one of the 20th-century’s leading economic thinkers and played a crucial role in shaping and building the economic system we have today.

Related Reading: Charlie Munger on mental models – how to use them to make better financial decisions.

#2. Security Analysis

Authors: Benjamin Graham and David Dodd
First published in: 1934
Synopsis: An advanced investing text that lays the foundation for the philosophy of value investing. Aimed at finance professionals.

Benjamin Graham and David Dodd Security Analysis

Like Buffett himself, David Dodd was once Benjamin Graham’s student at Columbia University’s business school.

When Dodd became Graham’s colleague as a post-graduate, they co-wrote Security Analysis — a book that went on to become one of the most important investing texts ever published.

As a value investing book, Security Analysis emphasizes the careful analysis of financial statements. In doing so, investors can find stocks that are trading for less than they should be based on their financials. 

Buffett learned under Graham as a student at Columbia, and eventually went to work for him in New York. Graham is considered the most influential person in shaping Buffett’s investment philosophy, with the Berkshire chairman claiming that 85% of his investing approach is derived from his former teacher and boss. 

This is an advanced textbook on value investing. Graham’s more popular book, The Intelligent Investor, aims to teach the general public about value investing. Security Analysis, on the other hand, is more like an academic textbook — the type you work thoroughly slowly. 

As such, for those who are new to investing and want to learn why Graham was so influential for Buffett, start with The Intelligent Investor (which is discussed below).

#3. Where Are the Customers’ Yachts?

Author: Fred Schwed
Subtitle: Or, a Good Hard Look at Wall Street.
First published in: 1940
Synopsis: Many on Wall Street are out to make themselves rich, not their clients.

Fred Schwed Jr - Where Are The Customers Yachts

Fred Schwed Jr. was not a notable investor of his time, losing everything in the 1929 crash.

However, he used what he learned to write his book: Where Are the Customers’ Yachts?

Among other lessons, Schwed shows people that often Wall Street’s goal is to generate transactions simply because they can charge you more fees for doing so — a problem that persists to the present day. 

Schwed also discusses Wall Street’s incessant pursuit of trying to find meaning among stock price movements.

In short, the takeaway from this book is that Wall Street isn’t necessarily here to help you. And it’s that idea alone that makes this classic a worthwhile read today. 

#4. The Intelligent Investor

Author: Benjamin Graham
First published in: 1949
Synopsis: This book introduces value investing in a more digestible format than Security Analysis

Benjamin Graham - The Intelligent Investor

Graham wrote The Intelligent Investor — a book Buffett called “by far the best book on investing ever written” — to be more approachable than Security Analysis for a newer investor. 

The Intelligent Investor introduces a theoretical investor named Mr. Market, who represents the pitfalls of emotional investing. Mr. Market buys based on emotions rather than by analyzing stocks.

From there, Graham explains how to use fundamental analysis (i.e., analysis of a company’s financial statements) to pick stocks that provide steady returns with limited risk.

This is a must-read book to truly understand Buffett’s investing approach. 

See Also: The best investing books for beginners to learn the stock market.

#5. The Great Crash, 1929

Author: John Galbraith
First published in: 1955
Synopsis: A look at what caused the infamous 1929 stock market crash, as well as a glimpse at its effects and long-term consequences.

John Kenneth Galbraith - The Great Crash 1929

In The Great Crash, 1929, economist John Galbraith argues that speculation occurs when people believe they can get rich without work.

This leads to investing based on price changes rather than underlying financials, with the goal of short-term profits.

Unfortunately, combined with inadequate regulations and social inequality, that type of speculation can result in substantial economic damage when (not if) the bubble bursts.

Galbraith illustrates his argument using the infamous 1929 stock market crash and the events that led up to it.

#6. Common Stocks and Uncommon Profits

Author: Philip A. Fisher
First published in: 1958
Synopsis: The key to wealth is buying stocks with long-term growth strategies and holding them for the long-run.

Philip A Fisher - Common Stocks and Uncommon Profits

In Common Stocks and Uncommon Profits, legendary investor Philip Fisher emphasizes the importance of learning all you can about companies by talking to competitors, consumers, suppliers and more.

Additionally, Fisher advocates for thorough analysis of companies based on a 15-point checklist.

With this knowledge, you can identify when a company has excellent growth prospects and buy their stock before the price takes off.

Fisher is considered the second most influential investor to Buffett, behind Graham.

Graham’s philosophy is more about finding stocks that are undervalued today, whereas Fisher’s philosophy is more that of a growth investor — finding investments that are undervalued based on potential future earnings. 

Charlie Munger, co-chairman at Berkshire, summed up the idea well when he said, “A great business at a fair price is superior to a fair business at a great price.”

#7. Paths to Wealth Through Common Stocks

Author: Philip Fisher
First published in: 1960
Synopsis: An expansion upon Fisher’s Common Stocks and Uncommon Profits that goes deeper into how stock ownership can lead to wealth.

Philip A Fisher - Paths to Wealth Through Common Stocks

This book was considered forward-looking for Fisher’s time.

In it, the famed investor discusses the economic environment of the 1960s and identifies key industries that were poised for growth.

He also provides general information on evaluating investments, as well as insights into corporate management, mergers and acquisitions, and shareholder voting.

It’s widely considered one of the most important texts when it comes to the fundamentals of picking individual stocks.

Related Reading: Websites that will give you free shares of stock just for signing up.

#8. Business Adventures

Author: John Brooks
Subtitle: Twelve Classic Tales from the World of Wall Street.
First published in: 1969
Synopsis: Human nature remains the same, even as technology and the business environment evolve around it.

John Brooks - Business Adventures

John Brooks was a long-time financial writer for The New Yorker. In Business Adventures, he details 12 critical moments in American business history to demonstrate how human nature can affect our business and investing decisions.

Each case study extracts one key lesson about how humans operate in a business context.

Although Brooks penned Business Adventures in 1969, the importance of knowing your market, avoiding emotions when investing, and other lessons are relevant to this day.

When Microsoft founder and fellow billionaire Bill Gates asked Buffett for a book recommendation, this was the title he offered up “without missing a beat,” according to the Wall Street Journal.

#9. Common Sense on Mutual Funds

Author: John C. Bogle
Subtitle: New Imperatives for the Intelligent Investor.
First published in: 1999
Synopsis: Offers a simple, common-sense approach to building wealth through investing in index funds.

John C Bogle - Common Sense on Mutual Funds

John C. Bogle — founder of The Vanguard Group and the creator of the first index fund — wrote Common Sense on Mutual Funds to provide a guide to the mutual fund industry.

In the book, Bogle covers everything from strategy to performance to the spirit of entrepreneurship. He also recommends broad-based index funds — passively managed funds that track a market index (like the S&P 500).

Since they’re passively managed, costs are low, ensuring that you keep more of your returns.

Some people might find this to be an interesting recommendation, as you won’t find any information in this book about how to go about picking stocks.

Actually, it’s the exact opposite: Bogle argues that you should avoid buying individual stocks, and instead stick with low-cost index funds. 

In a way, Buffett’s recommendation of this book represents a recognition of how hard and unlikely it is for the average investor to beat the market over time.

As Buffett has gone on to say about index fund investing, “I think it’s the thing that makes the most sense practically all of the time, and that is to consistently buy an S&P 500 low-cost index fund.”

#10. The Little Book of Common Sense Investing

Author: John C. Bogle
Subtitle: The Only Way to Guarantee Your Fair Share of Stock Market Returns.
First published in: 2007
Synopsis: A guide to help the average investor build a low-cost, diversified portfolio.

John C Bogle - The Little Book of Common Sense Investing

The Little Book of Common Sense Investing is yet another recommendation of Bogle’s work.  

It’s a quick read, aimed at the complete beginner.

And, like Buffett’s recommendation for Common Sense on Mutual Funds, it makes the argument to avoid individual stock picking all together — urging investors to instead focus on low-cost index funds. 

Why might that be a good idea? Simply put, picking individual stocks and timing the market is very difficult — as I learned when I bought Tesla shares for $26 each.

#11. The Ten Commandments for Business Failure

Author: Donald Keough
First published in: 2008
Synopsis: There may not be a guaranteed success formula, but there are several mistakes that almost certainly lead to business failure.

Donald Keough - The Ten Commandments for Business Failure

Donald Keough — who’s been COO of Coca-Cola, Chairman of Columbia Pictures, and Chairman of the investment bank Allen & Company — has witnessed many business failures in his lifetime.

In The Ten Commandments for Business Failure, Keough reveals the 10 key things (plus a bonus 11th tip) businesses should not do if they hope to avoid failure. 

Many of the tips seem obvious enough, yet even some of the world’s top executives make the mistakes he discusses time and again.

#12. Investing Between the Lines

Author: L. J. Rittenhouse
Subtitle: How to Make Smarter Decisions By Decoding CEO Communications.
First published in: 2012
Synopsis: A guide to deciphering corporate communications to make better investing decisions.

LJ Rittenhouse - Investing Between the Lines

L.J. Rittenhouse works with Fortune 500 executives to improve their communication with shareholders and strengthen financial performance. 

In Investing Between the Lines, she shares her knowledge on interpreting shareholder letters and financial reports so you can identify risky businesses before bad things happen.

This book is written primarily for investors, but managers can also use it to improve their communications with their shareholders.

#13. The Clash of the Cultures

Author: John Bogle
Subtitle: Investment Vs. Speculation.
First published in: 2012
Synopsis: There must be a balance between investment and speculation. The investment world has strayed too far towards the latter.

John C Bogle - The Clash of the Cultures

Bogle once again appears on this list with The Clash of the Cultures.

Throughout the book the Vanguard founder echoes several sentiments from his earlier works, this time offering a more historical perspective on the financial system.

He explains how the market has lost sight of value-adding long-term investing in favor of short-term trading, laments the failure of institutional investors to wield their power properly in corporate governance, and critiques the shift towards salesmanship that is hurting individual investors.

#14. The Outsiders

Author: William Thorndike Jr.
Subtitle: Eight Unconventional CEOs.
First published in: 2012
Synopsis: The Outsiders looks at eight CEOs who outperformed their competitors in the second half of the 20th century, and explores what they did to create those amazing results.

William N Thorndike Jr - The Outsiders

William Thorndike, founder of private equity firm Housatonic Partners, sought to discover commonalities between CEOs that outperformed their peers by a factor of 20 in terms of shareholder returns.

His research turned into The Outsiders.

In particular, Thorndike found two differences between the “outsider” CEOs and their conventional counterparts:

  1. Capital allocation strategies: Outsider CEOs saw themselves as investors, making calculated decisions based on return on investment.
  2. Management practices: From decentralization to a focus on shareholder returns, outsider CEOs ran their companies in then-uncommon ways.

#15. Strategic Value Investing

Authors: Stephen Horan, Robert Johnson and Thomas Robinson 
Subtitle: Practical Techniques of Leading Value Investors: Techniques From the World’s Leading Value Investors of All Time.
First published in: 2013
Synopsis: A crash course for aspiring DIY investors who want to learn the theory and practice of value investing.

Strategic Value Investing

Written by three accomplished and decorated financial professionals, Strategic Value Investing is a practical guide to identifying undervalued stocks. 

The book is split into three sections:

Section One introduces valuation and the idea of analyzing company financials.

Section Two gets into specific models of valuing companies. 

Section Three discusses how to pick the right value investing style and valuation model, as well as how to apply your knowledge to the market.

Summary

Buffett used to tell his late first wife Susan that “everybody can read what I read. It is a level playing field.”

Many of those books are on the list above.

But can reading Buffett’s favorite books actually help you?

Well, reading won’t make you rich — but it is one of the most accessible forms of knowledge. And that knowledge can help you better leverage and exploit the opportunities available to you.

Once you learn about a topic through reading, you can apply your knowledge to that subject (and to other areas of life). For example, reading business books can make you a better investor because you’ll understand the inner workings of the enterprises in which you invest.

Take it from Buffett himself. In a lecture to students in a Columbia University investing class, Buffett explained that knowledge “builds up, like compound interest.” 

And just like compound interest, the earlier you start, the better.

So start compounding your knowledge by reading the books on this list. If you’re interested in learning how the markets work and how to invest your money, you won’t regret it. 

And if you’re looking for more reading options, check out the following lists:

 
R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *