11 Picks from Warren

Buffetts Bookshelf

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50 YEARS AT BERKSHIRE
BERKSHIRE ANNUAL MEETING
BERKSHIRE HATHAWAY
WARREN BUFFETT

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ERIK HOLM

CONNECT

Bloomberg News

Warren Buffett is a voracious reader, and the legendary investor isnt shy about sharing his book
recommendations. In television appearances, in frequent conversations with students, and in his
annual letters to shareholders of Berkshire Hathaway Inc., Mr. Buffett can often be counted on to
add another tome to an ever-growing reading list.
The chairman of the $350-billion Berkshire conglomerate has gone so far as to hand-pick many of
the books sold at his companys widely attended shareholder meeting in Omaha, Neb. A local
family-owned store, The Bookworm, sets up a pop-up location at the meeting each year, and does
brisk business in titles that Mr. Buffett recommends.
For Buffett acolytes looking for a little light reading ahead of the latest shareholder meeting on
Saturday, here are some of the highlights from Mr. Buffetts bookshelf:
The Intelligent Investor, by Benjamin Graham. Of this classic tome on value investing, Mr.
Buffett once wrote: Picking up that book was one of the luckiest moments in my life. After reading
it, Mr. Buffett enrolled in Columbia University so he could take classes from Mr. Graham, and later
went on to work for him. Even now, when asked a question about his approach to investing, Mr.
Buffett is liable to cite specific chapters from the book. Advanced readers can move on to Security
Analysis, by Mr. Graham and his colleague David Dodd, a much longer tome upon which The
Intelligent Investor is based.
Common Stocks and Uncommon Profits, by Philip A. Fisher. Though he wasnt as widely known
to the investing public in his lifetime, Mr. Fisher ranks right up with Messrs. Graham, Dodd and
Buffett in the pantheon of value investors. Mr. Buffett long ago said he was so impressed by this
book that he made a special effort to go meet Mr. Fisher, and Mr. Buffetts biographer, Alice
Schroeder, credits Mr. Fisher with helping evolve Mr. Buffetts investing approach. In 2013, Mr.
Buffett told shareholders that this book ranks behind only The Intelligent Investor and the 1940
edition of Security Analysis in the all-time-best list for the serious investor.

John Keatley for The Wall Street Journal

Business Adventures: Twelve Classic Tales from the World of Wall Street,by John Brooks. Not
long after MicrosoftCorp. co-founder Bill Gates first met Mr. Buffett back in 1991, Mr Gates asked
the Oracle of Omaha to recommend his favorite book about business. As Mr. Gates recounted in
the Journal last year, Mr. Buffett didnt miss a beat before naming this tome, a collection ofNew
Yorker articles from the 1960s, and promised to send Mr. Gates his personal copy. Mr. Gates, now a
member of Berkshires board, says its the best business book hes ever read, lists Mr. Brooks as his
favorite business writer and admits that he still has Mr. Buffetts copy.

Where Are the Customers Yachts?, by Fred Schwed. Another decades-old classic, this book uses
humor to pierce some of the pretensions of Wall Street. The title comes from the story of a visitor to
New York who was admiring all the nice boats in the harbor, and was told that they belonged to Wall
Street bankers. He naively asked where the bankers clients kept their boats. The answer: They
couldnt afford them. Mr. Buffett once called it the funniest book ever written about investing, and
said it lightly delivers many truly important messages on the subject.
Essays in Persuasion, by John Maynard Keynes. Mr. Buffett has flagged this collection of writings
from the noted economist both for the importance of its ideas and the clear way theyre presented.
The essays, written from 1919 to 1931, touch on a wide variety of topics, including inflation, the gold
standard, Russia and Germany, and the possibilities of economic growth. While Mr. Keynes is now
knownand in some quarters, vilifiedfor his work as an economist, he also devoted a fair amount of
thought to stock picking. Mr. Bufett has deemed him brilliant at both callings. Reading Keynes will
make you smarter about securities and markets, he told Outstanding Investor Digest in 1989. Im
not sure reading most economists would do the same.
The Little Book of Common Sense Investing, by Jack Bogle. Mr. Buffett has heaped accolades on
a few books from Mr. Bogle over the years, but this was the most recent to earn his praise, as Mr.
Buffett gave it a shout-out just a few weeks ago. Mr. Bogle is the founder of the Vanguard Group
and creator of the worlds first index mutual fund, and while this slim volume certainly spends time
extolling the virtues of index investing, it also explains why tangible business realitieslike dividend
yields and earnings growthare more important than market expectations. For the record, Mr.
Buffett himself has frequently said most investors are better off buying low-cost index funds.

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Poor Charlies Almanack: The Wit and Wisdom of Charles T. Munger, edited by Peter
Kaufman. Mr. Buffett has steered the helm at Berkshire for the past 50 years, and alongside him for
the whole ride has been Charlie Munger, his vice chairman. Mr. Buffett hasnt been shy about
attributing much of Berkshires success to his right-hand manin no small part for saying no to some
of Mr. Buffetts stupider ideas. Mr. Munger is a deep thinker on human behaviorand human frailties
and has spoken often about how investors can shoot themselves in the foot. This book collects Mr.
Mungers speeches and other writings in an informal anthology. You will never find a book with more
useful ideas, Mr. Buffett once said. But while Berkshires chairman is known for his folksy demeanor,
Berkshires vice chairman can be somewhat more scathing, as evidenced by his supposed reply to
someone who asked him what he should do if he didnt enjoy the book. No problem, Mr. Munger is
said to have answered. Just give it to someone more intelligent.
The Most Important Thing: Uncommon Sense for the Thoughtful Investor, by Howard Marks.
As a reviewer at Barrons noted in 2011, Oak Tree Capital Chairman Howard Marks planned to
wait until he retired to write this book, but Mr. Buffett, a fan of Marks famous client memos, offered to

contribute a dust-jacket blurb if he would speed up his publishing timetable. With that inducement,
Mr. Marks produced a tome that explains the keys to successful investing and the pitfalls that can
destroy capital. It borrows from the memos that Mr. Buffett likes so much.
The Outsiders, by William Thorndike Jr. A book that has continued to gain prominent followers in
the years since Mr. Buffett mentioned it in his 2012 annual letter, Mr. Thorndike makes the case that
chief executives have no greater role than to determine how to spend their companys cash flow,
whether reinvesting it in the business, spending it on acquisitions or returning it to shareholders.
Those that do it best are like the best investors, he says: They buy low and sell high and earn
massive shareholder returns over the long-run. Mr. Buffett called it an outstanding book and
flagged a chapter about Tom Murphy, the longtime chairman of Capital Cities/ABC whos now a
Berkshire board member. Mr. Buffett called Mr. Murphy overall the best business manager Ive ever
met.
Dream Big, by Cristiane Correa. Originally published in Portuguese, this book earned praise from
Mr. Buffett at last years annual shareholder meetingwhich prompted a run on then hard-to-find
English-language print copies. It tells the story of the Brazilian trio behind 3G Capital, the privateequity firm that owns Anheuser-Busch InBev and has partnered with Berkshire on deals to
acquire H.J. Heinz and Kraft Foods Group Inc. While Berkshires partnerships with the firm are
recent, Mr. Buffetts relationship with 3Gs Jorge Paulo Lemann go back for years. My friend and
now partner Jorge Paulo and his team are among the best businessmen in the world, Mr. Buffett
said. He is a fantastic person and his story should be an inspiration to everybody, as it is for me.