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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.

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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.

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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.”

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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.

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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

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The Gentle Art of Saying No

The Gentle Art of Saying No

No!

It’s a simple fact that you can never be productive if you take on too many commitments — you simply spread yourself too thin and will not be able to get anything done, at least not well or on time.

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But requests for your time are coming in all the time — through phone, email, IM or in person. To stay productive, and minimize stress, you have to learn the Gentle Art of Saying No — an art that many people have problems with.

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What’s so hard about saying no? Well, to start with, it can hurt, anger or disappoint the person you’re saying “no” to, and that’s not usually a fun task. Second, if you hope to work with that person in the future, you’ll want to continue to have a good relationship with that person, and saying “no” in the wrong way can jeopardize that.

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But it doesn’t have to be difficult or hard on your relationship. Here are the Top 10 tips for learning the Gentle Art of Saying No:

  1. Value your time. Know your commitments, and how valuable your precious time is. Then, when someone asks you to dedicate some of your time to a new commitment, you’ll know that you simply cannot do it. And tell them that: “I just can’t right now … my plate is overloaded as it is.”
  2. Know your priorities. Even if you do have some extra time (which for many of us is rare), is this new commitment really the way you want to spend that time? For myself, I know that more commitments means less time with my wife and kids, who are more important to me than anything.
  3. Practice saying no. Practice makes perfect. Saying “no” as often as you can is a great way to get better at it and more comfortable with saying the word. And sometimes, repeating the word is the only way to get a message through to extremely persistent people. When they keep insisting, just keep saying no. Eventually, they’ll get the message.
  4. Don’t apologize. A common way to start out is “I’m sorry but …” as people think that it sounds more polite. While politeness is important, apologizing just makes it sound weaker. You need to be firm, and unapologetic about guarding your time.
  5. Stop being nice. Again, it’s important to be polite, but being nice by saying yes all the time only hurts you. When you make it easy for people to grab your time (or money), they will continue to do it. But if you erect a wall, they will look for easier targets. Show them that your time is well guarded by being firm and turning down as many requests (that are not on your top priority list) as possible.
  6. Say no to your boss. Sometimes we feel that we have to say yes to our boss — they’re our boss, right? And if we say “no” then we look like we can’t handle the work — at least, that’s the common reasoning. But in fact, it’s the opposite — explain to your boss that by taking on too many commitments, you are weakening your productivity and jeopardizing your existing commitments. If your boss insists that you take on the project, go over your project or task list and ask him/her to re-prioritize, explaining that there’s only so much you can take on at one time.
  7. Pre-empting. It’s often much easier to pre-empt requests than to say “no” to them after the request has been made. If you know that requests are likely to be made, perhaps in a meeting, just say to everyone as soon as you come into the meeting, “Look guys, just to let you know, my week is booked full with some urgent projects and I won’t be able to take on any new requests.”
  8. Get back to you. Instead of providing an answer then and there, it’s often better to tell the person you’ll give their request some thought and get back to them. This will allow you to give it some consideration, and check your commitments and priorities. Then, if you can’t take on the request, simply tell them: “After giving this some thought, and checking my commitments, I won’t be able to accommodate the request at this time.” At least you gave it some consideration.
  9. Maybe later. If this is an option that you’d like to keep open, instead of just shutting the door on the person, it’s often better to just say, “This sounds like an interesting opportunity, but I just don’t have the time at the moment. Perhaps you could check back with me in [give a time frame].” Next time, when they check back with you, you might have some free time on your hands.
  10. It’s not you, it’s me. This classic dating rejection can work in other situations. Don’t be insincere about it, though. Often the person or project is a good one, but it’s just not right for you, at least not at this time. Simply say so — you can compliment the idea, the project, the person, the organization … but say that it’s not the right fit, or it’s not what you’re looking for at this time. Only say this if it’s true — people can sense insincerity.

Featured photo credit: Pexels via pexels.com

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