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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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Last Updated on July 18, 2019

10 Warning Signs of Low Self-Esteem and a Lack of Confidence

10 Warning Signs of Low Self-Esteem and a Lack of Confidence

Self-confidence can be defined as a belief in one’s abilities and maintaining a sense of competence. On the other hand, low self-confidence can be defined as a lack of faith in one’s abilities and competence.

Self-confidence can fuel success, while low self-esteem can impede it. To avoid falling into patterns of low self-esteem and a lack of confidence, consult the following warning signs.

1. You check your phone while alone in social situations.

You find yourself unable to sit still during social situations with little or no friends. Instead, you find yourself desperately checking your phone to appear more socially connected.

Tip: Try exercising an affirmation such as “I am loved.”

2. You back down during a disagreement to appease another person.

You find yourself backing down in conversation often; you negotiate your views so as to avoid conflict. You would rather avoid experiencing rocky waters than express yourself honestly.

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Tip: Try an affirmation such as “my opinion matters” or “I live authentically.”

3. You are unable to leave the house without make-up or primping.

You gain a false sense of self-esteem from wearing make-up or primping. Instead of feeling self-esteem from within, you feel a need to primp in order to feel good about yourself.

Tip: Try a daily “I am beautiful” affirmation.

4. You take constructive criticism too personally.

You tear up in the bathroom after a coworker gives you constructive criticism about your job performance; you wind up yelling at friends when they criticize your choice in a date. Instead of taking criticism objectively, you react emotionally.

Tip: Try counting to 3 before responding to criticism.

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5. You are afraid to contribute your opinion in conversation.

You find yourself second guessing what you want to say before you say it, instead of diving into conversation without a thought. You may find yourself stuttering and engaging in negative self-talk.

Tip: Focus on your breath when you begin to second guess yourself to avoid over-thinking.

6. You are indecisive in the midst of simple decisions.

You change your mind after coming to a simple decision, such as what activity to do with a friend or what food to eat. Then once you come to another decision, you change your mind over and over.

Tip: Vocalize the affirmation “I am assertive and in control of my life.”

7. You cannot handle genuine compliments.

You reflect when someone pays you a genuine compliment, instead of graciously accepting the compliment.

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Tip: Practice the affirmation “I am worthy of love” or “I have many good qualities.”

8. You give up too soon.

You give up on your goals and dreams before you have hardly started. You lack confidence in your success, so you give up all together.

Tip: Practice the affirmation “I am a success seeker, not a failure avoider.”

9. You compare yourself with others.

You pay extra attention to those you deem more successful than you, and let your own self-worth take a plummet as a result. Instead of focusing on your journey and your journey only, you constantly look at everyone else’s.

Tip: Declare the affirmation “I am more than enough.”

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10. You slouch.

You display a low body stance: you do not stand tall, but instead let your body slouch downwards, sending the message that you are not proud of yourself.

Tip: Take a few minutes each day to focus on your body posture. Take a look at these 10 Graphs That Help You Improve Posture In No Time.

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