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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 September 17, 2019

10 Simple Ways To Always Think Positive Thoughts

10 Simple Ways To Always Think Positive Thoughts

Positive thinking can lead to a lot of positive change in your life. Developing an optimistic outlook can be good for both your physical and mental health.

But sometimes, certain situations arise in life that makes it hard to keep a positive outlook. Take steps to make positive thinking become more like your second nature and you’ll reap the biggest benefits.

Here are 10 ways to make thinking positive thoughts easy:

1. Spend Time with Positive People

If you surround yourself with constant complainers, their negativity is likely to rub off on you.

Spend time with positive friends and family members to increase the likelihood that their positive thinking habits will become yours too. It’s hard to be negative when everyone around you is so positive.

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2. Take Responsibility for Your Behavior

When you encounter problems and difficulties in life, don’t play the role of the victim. Acknowledge your role in the situation and take responsibility for your behavior.

Accepting responsibility can help you learn from mistakes and prevent you from blaming others unfairly.

3. Contribute to the Community

One of the best ways to feel good about what you have, is to focus on what you have to give.

Volunteer in some manner and give back to the community. Helping others can give you a new outlook on the world and can assist you with positive thinking.

4. Read Positive and Inspirational Materials

Spend time each day reading something that encourages positive thinking. Read the Bible, spiritual material, or inspirational quotes to help you focus on what’s important to you in life. It can be a great way to start and end your day.

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Some recommendations for you:

5. Recognize and Replace Negative Thoughts

You won’t be successful at positive thinking if you’re still plagued by frequent negative thoughts. Learn to recognize and replace thoughts that are overly negative. Often, thoughts that include words like “always” and “never” signal that they aren’t true.

If you find yourself thinking something such as, “I always mess everything up,” replace it with something more realistic such as, “Sometimes I make mistakes but I learn from them.”

There’s no need to make your thoughts unrealistically positive, but instead, make them more realistic.

6. Establish and Work Toward Goals

It’s easier to be positive about problems and setbacks when you have goals that you’re working toward. Goals will give you motivation to overcome those obstacles when you encounter problems along the way. Without clear goals, it’s harder to make decisions and gauge your progress.

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Learn to set SMART goals to help you achieve more.

7. Consider the Consequences of Negativity

Spend some time thinking about the consequences of negative thinking. Often, it can become a self-fulfilling prophecy.

For example, a person who thinks, “I probably won’t get this job interview,” may put less effort into the interview. As a result, he may decrease his chances of getting the job.

Create a list of all the ways negative thinking impacts your life. It likely influences your behavior, your relationships, and your feelings. Then, create a list of the ways in which positive thinking could be beneficial.

8. Offer Compliments to Others

Look for reasons to compliment others. Be genuine in your praise and compliments, but offer it frequently. This will help you look for the good in other people.

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9. Create a Daily Gratitude List

If you start keeping a daily gratitude list, you’ll start noticing exactly how much you have to be thankful for. This can help you focus on the positive in your life instead of thinking about all the bad things that have happened in the day.

Getting in the habit of showing an attitude of gratitude makes positive thinking more of a habit. Here’re 40 Simple Ways To Practice Gratitude.

10. Practice Self-Care

Take good care of yourself and you’ll be more equipped to think positively.

Get plenty of rest and exercise and practice managing your stress well. Taking care of your physical and mental health will provide you with more energy to focus on positive thinking.

Learn about these 30 Self-Care Habits for a Strong and Healthy Mind, Body and Spirit.

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