Advertising
Advertising

5 Finance Books From Warren Buffett’s Bookshelf

5 Finance Books From Warren Buffett’s Bookshelf

If you’re into investing, you know how successful Warren Buffett is. The investing genius is now worth an estimated $65 billion, and his Berkshire Hathaway is an international conglomeration with investments in nearly any industry you can think of. A Buffett investment can send shocks running throughout the investing world, which can be demonstrated by Berkshire Hathaway’s surprising decision to invest in Apple Inc.

How has Buffett come so far? Some of it is just a knack for business which he has shown since he was a young boy. But a huge part of Buffet’s success is his voracious appetite for books. When a student asked Buffett how he could prepare for an investing career, Buffet told him to read 500 pages every day. Some of it is the standard stock information, but much of Buffet’s reading has taken the form of financial and investing books.

A total Buffet book list could last for pages, but here are five books which have played a key role in Buffet’s life and what an ordinary investor could take away from them.

Advertising

1. The Intelligent Investor by Benjamin Graham

Graham, an investor and educator at the Columbia Business School, had a huge influence on Buffett’s life. Buffett enrolled in Columbia Business School because Graham taught there, and a roommate observed that Buffett treated Graham’s book “like a god.”

The Intelligent Investor’s key lesson is about the importance of staying calm in the volatile world of investing, a trait which Buffett believes is more important than inside information or mere intelligence. If you give in to the mob and buy what everyone else buys, you will end up in trouble. You need a solid, intellectually justifiable reason to jump in on a stock. And never get emotionally caught up in whether your stock does well or not.

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

Fisher may not be as well known as Graham, and he may not have had an as big influence on Buffet’s life as Graham. But Buffett still enthusiastically recommends Fisher, stating that he was “an eager reader of whatever Phil has to say.” Fisher’s work is well known for how it values senior management over looking at financial statements.

Advertising

In addition, Fisher like Graham also stresses the importance of a strong will and learning to zag when the crowd zigs. Another thing that he points out is that owning a stock is owning a part of the company – and if you cannot understand the company’s business, you cannot understand the stock you own. This is something which Buffett follows very heavily, as shown by his well-known lack of interest in tech companies.

3. The Outsiders by William Thorndike Jr.

In his 2012 letter to shareholders, Buffett recommended The Outsiders, calling it “an outstanding book about CEOs who excelled at capital allocation.” He also noted how it praised Berkshire Hathaway director Tom Murphy, who Buffett called “the best business manager I’ve ever met.”

The Outsiders has become a prominent hit in the business community, as Thorndike spent years profiling CEOs he viewed as particularly successful. He came to the conclusion that the best CEOs are not necessarily charismatic, but instead are “pragmatic, flexible and opportunistic, frugal and patient.”

Advertising

4. Poor Charlie’s Almanack by Peter Kaufman

This book is a collection of speeches and talks by Charles Munger, the vice chairman of Berkshire Hathaway. Buffett has always praised his fellow Omaha boy, calling him, observing that they have always been able to get along despite disagreeing on certain business decisions.

Poor Charlie’s Almanack lists Munger’s investment strategies, along with his emphasis on personal finance models. Munger observes that if you only have one strategy or worldview in investment, you will twist reality to fit that worldview. By constantly having multiple models (and multiple means 80 to 90), you will be able to keep yourself grounded, which is how Munger has helped Buffett when Buffett has had some of his wackier schemes.

5. Business Adventures by John Brooks

In 1991, Bill Gates asked Warren Buffett what his favorite business book was. Buffett recommended Business Adventures without a second thought and the book today is also one of Gates’s favorites.

Advertising

Business Adventures was published more than four decades ago, but its stories are just as relevant today. Brooks avoids summing up his stories with neat business lessons, letting the readers draw their own conclusions. But one running theme throughout the book is how executives can get complacent with their own success and fail to innovate.

The story of Xerox, which revolutionized offices in the 60s but failed to adapt to the rise of the computer, is relevant here. Buffett has always stayed on his toes and is willing to try new things, as his recent investment in Apple shows.

As noted above, these are just a few of the books Buffett recommends. Here is an additional list from Business Insider of Buffett-recommended books which can improve your investment abilities.

Featured photo credit: sher xia via flickr.com

More by this author

8 Signs You Have A Strong Personality That Might Scare Some People How to Achieve Quick Success at Work Even If You’re Lacking in Clear Direction You’ll No Longer Be Fooled by Skillful Liars If You Know This Concept How I Kill Boredom at Work to Regain My Productivity This Is Why Classical Music Lovers Are Smarter

Trending in Communication

1 7 Ways To Deal With Negative People 2 How to Talk to Strangers Without Feeling Awkward 3 What Are Interpersonal Skills? Master Them for Better Relationships 4 How To Stop Negative Thoughts from Killing Your Confidence 5 This 4-Year Old Girl’s Explanation On the Problem with New Year’s Resolutions Is Everything You Need

Read Next

Advertising
Advertising
Advertising

Last Updated on January 18, 2019

7 Ways To Deal With Negative People

7 Ways To Deal With Negative People

Some people will have a rain cloud hanging over them, no matter what the weather is outside. Their negative attitude is toxic to your own moods, and you probably feel like there is little you can do about it.

But that couldn’t be farther from the truth.

If you want to effectively deal with negative people and be a champion of positivity, then your best route is to take definite action through some of the steps below.

1. Limit the time you spend with them.

First, let’s get this out of the way. You can be more positive than a cartoon sponge, but even your enthusiasm has a chance of being afflicted by the constant negativity of a friend.

Advertising

In fact, negativity has been proven to damage your health physically, making you vulnerable to high levels of stress and even cardiac disease. There’s no reason to get hurt because of someone else’s bad mood.

Though this may be a little tricky depending on your situation, working to spend slightly less time around negative people will keep your own spirits from slipping as well.

2. Speak up for yourself.

Don’t just absorb the comments that you are being bombarded with, especially if they are about you. It’s wise to be quick to listen and slow to speak, but being too quiet can give the person the impression that you are accepting what’s being said.

3. Don’t pretend that their behavior is “OK.”

This is an easy trap to fall into. Point out to the person that their constant negativity isn’t a good thing. We don’t want to do this because it’s far easier to let someone sit in their woes, and we’d rather just stay out of it.

Advertising

But if you want the best for this person, avoid giving the false impression that their negativity is normal.

4. Don’t make their problems your problems.

Though I consider empathy a gift, it can be a dangerous thing. When we hear the complaints of a friend or family member, we typically start to take on their burdens with them.

This is a bad habit to get into, especially if this is a person who is almost exclusively negative. These types of people are prone to embellishing and altering a story in order to gain sympathy.

Why else would they be sharing this with you?

Advertising

5. Change the subject.

When you suspect that a conversation is starting to take a turn for the negative, be a champion of positivity by changing the subject. Of course, you have to do this without ignoring what the other person said.

Acknowledge their comment, but move the conversation forward before the euphoric pleasure gained from complaining takes hold of either of you.

6. Talk about solutions, not problems.

Sometimes, changing the subject isn’t an option if you want to deal with negative people, but that doesn’t mean you can’t still be positive.

I know that when someone begins dumping complaints on me, I have a hard time knowing exactly what to say. The key is to measure your responses as solution-based.

Advertising

You can do this by asking questions like, “Well, how could this be resolved?” or, “How do you think they feel about it?”

Use discernment to find an appropriate response that will help your friend manage their perspectives.

7. Leave them behind.

Sadly, there are times when we have to move on without these friends, especially if you have exhausted your best efforts toward building a positive relationship.

If this person is a family member, you can still have a functioning relationship with them, of course, but you may still have to limit the influence they have over your wellbeing.

That being said, what are some steps you’ve taken to deal with negative people? Let us know in the comments.

You may also want to read: How to Stop the Negative Spin of Thoughts, Emotions and Actions.

Read Next