Be warned - the list is long and may intimidate some. The solution is simple - start now, pick one book - and just begin. If you are disciplined and read a chapter a night, within a couple of years you will possess some of the knowledge possessed by the investment masters. Don't hesitate even for a moment. Life is too short. Feeding your mind with quality reading is something that you won't regret. Do not be daunted by the number of books on this list. Remember 'a journey of a thousand miles begins with a single step' - so choose one and begin that journey today.
Written more than 10 years ago, it is a much easier read than most of the core texts or Greenwald's. A good primer for the reader that does not want to work too hard.
This book was voted by Business Week as one of the top 10 business books of 1994. Despite the fact that at the 2006 Berkshire Annual Shareholders meeting Charlie Munger called Siegel demented for comparing 'apples to elephants' - I did find much of value in this book. This book provides strong evidence for the long term 'buy-and-hold' strategy. It is good to return to during short-term periods of market turbulence that rock your portfolio.
See above.
In his book, Dreman delves into psychology to show that our brains are 'hard-wired' for under- or average performance on the market. By adopting a contrarian approach - buying when everyone is selling - we must over-ride and ignore our most basic instincts of 'flight'.
More Than You Know - Michael J. Mauboussin
Mauboussin who is Chief Strategist at Legg Mason Capital Management, is a brilliant mind - and a great writer. His focus is on 'behavioral finance' - and you can read much of his writing
here. This book follows in the steps of Munger's 'latticework of multiple mental models', and leads the reader through psychology, science and other disciplines. Great.
This book teaches you to think about investing by focusing on valuation, expectations of future cash flows and obviously discounted cashflow.
(3) BOOKS ON WARREN BUFFETT
The Warren Buffett Way - Robert G. Hagstrom, JR.
This was the first book that I ever read about Buffett (placed into my hands - yes - by Tony Holley). Very well researched and written, it provides much insight into the man. I try to re-read it once every second year. I highly recommend it.
The Warren Buffett Portfolio - Robert G. Hagstrom, JR.
Recommended by Buffett and Munger as one of the better books to read.
The Essays of Warren Buffett - Warren E. Buffett & Lawrence Cunningham
A MUST READ. A compilation of Buffett's writings, from his 'Letters to Shareholders'. It doesn't get better than this. Raw wisdom. His metaphors and aphorisms are his greatest marketing tools.
Buffett: The Making of an American Capitalist - Roger Lowenstein
This is considered one of the better Buffett biographies. Superbly written, it provides depth of insight into Buffett's character, but does not delve into his investment strategies. Nonetheless, highly recommended.
Of Permanent Value - Andrew Kilpatrick
This is the ultimate Buffett biography. 2 volumes, 9 pounds, 1,800 pages. All that you have ever wanted to know about the man. I have not read this - yet - but it is on my 'wishlist' (hint).
How to Pick Stocks Like Warren Buffett - Timothy Vick
The Tao of Warren Buffett - Mary Buffett
Despite being written by Buffett's former daughter-in-law, and without his consent, Mary Buffett provides for readers 125 meditations (Buffett quotes) - each with a page that explains further the 'thoughts'. It's an easy read - finished in one sitting. Some of the thoughts include: "You can't make a good deal with a bad person", "Wall Street is the only place that people ride to in a Rolls Royce to get advice from those that take the subway", and "What we learn from history is that people do not learn from history".
The Midas Touch - John Train
From the best-selling author of The Money Masters, this is a short and easy read. A good first book on Buffett.
Warren Buffet Speaks - Janet Lowe
An easy read - and probably the most comprehensive collection of Buffett aphorisms. I refer to it often to make sure that I am getting th quote right.
The New Buffetology - Mary Buffett
Written by Buffett's former daughter-in-law. Contains some good case studies on Buffett's investments, and a good investment checklist.
(4) BOOKS ON CHARLIE MUNGER:
What Warren Buffett thinks of Charlie Munger:
“Charlie can analyze and evaluate any kind of deal faster and more accurately than any man alive. He sees any valid weakness in sixty seconds. He is a perfect partner.”
"Charlie shoved me in the right direction of not just buying bargains, as Ben Graham had taught me. This was the real impact Charlie had on me. It took a powerful force to move me on from Graham's limiting views. It was the power of Charlie's mind. He expanded my horizons."
Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger
This is without a doubt one of my most valuable books in my library. At $50, it is a bargain for the value that you are getting. I wish I'd bought it 10 years ago! While it looks like a 'coffee table' book, it is much much more. You can open to any page and just learn. It is filled with a biography of Munger's life, his speeches over the past 20 years, and hundreds of quotes and testimonials. My copy sits on our dining room table, and whenever I am waiting for my wife to 'finish getting ready' before we go out, I just randomly flip to a page and soak up some Munger-wisdom. Makes one hell of a gift, and the proceeds go to the Munger Research Center at the Huntington Library.
Damn Right! Behind The Scenes With Berkshire Hathaway Billionaire Charlie Munger - Janet Lowe
This is one of the most enjoyable books that I read this year - I couldn't put it down. An in-depth biography of Buffett's partner - Charlie Munger, it tells the story of a brilliant mind, committed to learning about this world, and to contributing to society. Absolutely inspirational. I can't recommend it enough.
(5) BOOKS RECOMMENDED BY WARREN BUFFETT:
When Genius Failed - Roger Lowenstein
Buffett refers to Long Term Capital Management saga often as an example of the irrelevance of IQ when it comes to successful investing. There is much to be learned from their failure.
Nuclear Terrorism: The Ultimate Preventable Catastrophe: Graham Allison
Recommended by Buffett at the 2005 Annual Berkshire Shareholders meeting. Never in the history of mankind has there been a situation where one man (or 19) has the ability to kill tens of thousands. 9-11 taught us otherwise. What is described in this book is the type of 'black swan' that Taleb refers to in his book. A good op-ed in the Wall Street Journal by the author can be read here.
F.I.A.S.C.O: Blood In The Water On Wall Street - Frank Partnoy
Recommended by Buffett at the 2005 Annual Berkshire Shareholders meeting. Munger said of the book:
"You would be disgusted if you had a fair mind and spent a month really delving into a big derivative operation. You would think it was Lewis Carroll (Alice in Wonderland). You would think it was the Mad Hatter's Tea Party. And the false precision of these people is unbelievable. They make the worst economic professors look like gods. Morever, there is depravity augmenting folly. Read the book F.I.A.S.C.O by law professor and former derivatives trader Frank Portnoy, an inside account of depravity in derivative trading at one of the biggest and best-regarded Wall Street firms. The book will turn your stomach."
The Wealth and Poverty of Nations: Why some are so rich and some are so poor - David Landes
This book explores and attempts to explain why some cultures that possess certain advantages have never become world powers, and why others have become so prosperous. Thought-provoking.
Guns Germs and Steel- The Fates of Human Societies - Jared Diamond
Diamond tackles the same subject as Landes (see previous recommendation), and attempts to explain why certain countries become cultural centers and military superpowers. It provides the reader with an interesting explanation of why the world has developed the way it has.
The Third Chimpanzee - Jared Diamond
A provocative book that attempts to show the reader that with 98% of human genes being identical to chimpanzees, that we are merely another more developed species of ape. The book explores the evolution of mankind from ape to what we are today.
A Short History of Nearly Everything - Bill Bryson
Recommended by Buffett at the 2004 Annual Berkshire Shareholders Meeting. I recently finished this book and highly recommend it. I possess little to no formal science education and this filled many gaps. Bryson is a great writer, witty and brilliant - he takes the reader on a journey - showing him how insignificant mankind and the planet earth are in the greater scheme of things - and yet how significant we are in protecting an environment that is becoming ever more fragile.
Personal History - Katherine Graham
Owner of the Washington Post, Kay Graham was a close friend of Buffett and a remarkable woman. This is an inspirational read. This book is a 1998 Pulitizer Prize winner.
Titan: The Life of John D. Rockefeller, Sr. - Ron Chernow
A biography of history's first billionaire.
Bull: A History of the Boom and Bust - Maggie Mahar
The Smartest Guys in the Room - Bethany McLean
The full story behind the Enron scandal.
In an Uncertain World - Robert Rubin
Warren Buffett says of the author:
"As Secretary of the Treasury, Robert Rubin ranked with the best. The drama-packed account of his years on the job should be read by all who are interested in what happens when politics and economics intersect."
Liar's Poker - Michael Lewis
(6) BOOKS RECOMMENDED BY CHARLIE MUNGER:
Influence: The Psychology of Persuasion - Robert Cialdini
This is my favorite Munger recommendation and another Tony Holley special. Charlie Munger actually gave the author one Berkshire Hathaway share (worth today $120,000) as a show of appreciation. This is one of the most useful books that I have read in the past decade. Makes you realize what suckers we really are and how easily we are manipulated. In the book, Cialdini describes six psychological principles that drive our powerful impulses to comply to the pressures of others, and shows how we can defend ourselves against manipulation or use them to make our persuasion techniques more effective.
The Martians of Science - Istvan Hargittai
Recommended at the 2007 Annual Wesco Shareholders Meeting. Munger said: "It's a hell of a book about five Hungarian physicists driven to the U.S. by Hitler, who contributed much to science here. I can't recommend it enough." You can read an excerpt from the book here.
Einstein: His Life and Universe - Walter Isaacson
Recommended at the 2007 Annual Wesco Shareholders Meeting. Munger said: "I've read all the Einstein biographies and this is by far the best - a very interesting biography."
Master of the Game: Steve Ross and the Creation of Time Warner - Connie Bruck
Munger says of the book:
"I very much enjoyed Connie Bruck's biography - Master of the Game - about Steve Ross... she is a very insightful writer and it's a very interesting story." - 1994 Annual Berkshire Shareholders Meeting
Ice Age - John and Mary Gribbin
What Munger had to say about the book:
"Ice Age is one of the best books I have ever read. I've spent thousands of dollars buying copies for my friends. If you don't like Ice Age, then you have some limitations." - 2002 Wesco Annual Shareholders Meeting
How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World and Everything In It - Arthur Herman
What Munger had to say about the book:
"I also recommend How the Scots Invented the Modern World. It's amazing how one million poor people with a lousy climate and no resources had such a large constructive influence on the world. I tried to figure it out and I couldn't. The professor did that. It's a wonderful book."
Deep Simplicity: Bringing Order to Chaos and Complexity - John Gribbin
"Not everyone will like Deep Simplicity. It's pretty hard to understand everything, but if you can't understand it, you can always give it to a more intelligent friend." - Charlie Munger, 2004 Wesco Annual Shareholders Meeting.
A Matter of Degrees: What Temperature Reveals About the Past and Future of Our Species, Planet and Universe - Gino Segre
A Matter of Degrees, by a physicist named Segre, is a perfectly marvelous book. Not a book you can go through at 90 MPH, but if you parse through it slowly, you'll get a lot out of it. You'll get a lot of hours per dollar if you use it right." - Charlie Munger, 2003 Wesco Annual Shareholders Meeting.
Getting It Done: How to Lead When You Are Not in Charge - Roger Fisher
What Munger has to say about the book:
"This book is must reading for those seeking to maximize their contribution to the constructive work of the world."
Conspiracy of Fools: A True Story – Kurt Eichenwald
Charlie Munger said of the book: "... that Enron book is really worth reading because the evil is so extreme. You see people getting sucked in by the evil around them. You just learn so much." - 2007 Wesco Annual Meeting.
Several books have been written about the Enron affair, but this is, in my opinion is the best. A great read. Thoroughly-researched and Eichenwald is a great story-teller.
The Path to Power (The Years of Lyndon Johnson, Volume 1) – Robert A. Caro
" I loved Caro’s book – I thought it was very well done. I think reading his biography on LBJ is very important for anyone who wants a view into the human condition. LBJ never told the truth when a lie would be better. This is the way he went through life. He had a high intellect and extraordinary energy and did a lot of good along with the bad. I’m not sure he didn’t do more good than bad. But I think it’s an appalling life to lie as much as LBJ. What I said at Berkshire meeting about the robber barons applies here: “When he’s talking, he’s lying, and when he’s quiet, he’s stealing.” - Charlie Munger, 2004 Wesco Annual Shareholders Meeting.
Les Schwab: Pride in Performance – Les Schwab
"If you want to read one book, read the autobiography of Les Schwab. He ran tire shops in the Midwest and made a fortune by being shrewd in a tough business by having good systems…He made hundreds of millions selling tires". - Charlie Munger, 2004 Berkshire Hathaway Annual Meeting.
The Selfish Gene - Richard Dawkins
Recommended in the second edition of Poor Charlie's Almanack.
Only the Paranoid Survive - Andy Grove
Recommended in the second edition of Poor Charlie's Almanack. A great read - a reminder to why Buffett steers clear from Hi-tech companies: the environment is changing to quickly - the 'moats' and the unless the management is continuously vigiliant and prepared to adapt, then any competitive advantage is only temporary.
Three Scientists and Their Gods: Looking for Meaning in an Age of Information - Robert Wright
Recommended in the second edition of Poor Charlie's Almanack.
Getting to Yes: Negotiating Agreement Without Giving In - Roger Fisher & Ury Fry
Recommended in the second edition of Poor Charlie's Almanack
Benjamin Franklin: An American Life - Walter Isaacson
"The Isaacson book on Franklin was terrific. He had a terrific subject – it’s hard to write a bad book on such an interesting subject." - Charlie Munger, 2004 Wesco Annual Shareholders Meeting.
Darwin's Blind Spot - Frank Ryan
Recommended by Charlie at the 2003 Annual Berkshire Shareholders Meeting.
Living Within Limits: Ecology, Economics and Population Taboos - Garret Hardin
Charlie says of this book: "It is a summary of the major things Hardin has learned in a lifetime. He is a real thinker. That is a fabulous book. " - Outstanding Investor Digest, June 30, 1993
The book argues for population and immigration control and proposes that the earth is not capable of supporting limtless population growth.
(7) OTHER 'LATTICEWORK' TEXTS TO EXPAND YOUR MENTAL MODELS:
On the Latticework (multiple mental models) concept, Charlie Munger says:
“You must know the big ideas in the big disciplines and then use them routinely – all of them, not just few. Most people are trained in one model – economics, for example – and try to solve all problems in one way. You know the old saying: ‘To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems.”
Another Tony Holley recommendation. I haven't read it yet - but it's on my wishlist. I hope to pick it up in Omaha in 2008.
The author writes: "Investment decisions are more likely to be correct when ideas from other disciplines lead to the same conclusion. Those who strive to understand (these) connections are well on the way to worldly wisdom. This makes us not only better investors but better leaders, better citizens, better parents, spouses and friends."
Beyond Graham and Dodd - Mitch Julis
Recently released, I look forward to reading and reviewing this. Mitch is the founder of Canyon Capital.
The Origin of Wealth - Eric D. Beinhocker
This was recommended to me by Canyon Capital's Mitch Julis. It recently arrived in the post - and I look forward to reviewing it once I have completed it.
(8) OTHER RECOMMENDATIONS:
Manias, Panics and Crashes - Charles. P Kindleberger
Warren Buffett once said that the one thing you can learn from history is that people do not learn from history. It is for this reason that it is worth reading both this book and the next one - so that we are able to remain apart from the herd during times of panics or irrational exuberance.
Devil Take the Hindmost - Edward Chancellor
See the review above.
Revolutionary Wealth - Alvin & Heidi Toffler
I recommend all the books written by the Tofflers. They are 'futurists' at heart - keen observers of the changes that are occuring in our world, and where we are heading. In their latest book, the Tofflers examine the new 'wealth system' of the 21st century - and look at everything from extreme sports, how vodka is marketed to blogging etc. If you want to get a glimpse of the future - this is the book for you. Adapt or wither.
The Rediscovered Benjamin Graham - Janet Lowe
This is a great collection of Graham's writings, speeches, interviews and lectures.
Fooled By Randomness - Nassim Nicholas Taleb
Remember the line from Baz Lurman's 'Wear Sunscreen' - the one that goes: "Whatever you do, don't congratulate yourself too much, or berate yourself either. Your choices are half-chance, so are everybody else's."? Well - that's what this book's all about. This book examines the difference between skill and luck, and looks at to what extent randomness plays in success and failure. Taleb has a brilliant mind - a deep thinker - and his writing is both humorous and rivetting. His latest book 'Black Swan' is a New York Times Best Seller.
The Black Swan - Nassim Nicholas Taleb
Do you know what a 'Black Swan' is? No - not the bird. In this new York Times Best Seller, Taleb argues that the really important events that affect us (and financial markets) cannot be predicted by past events, but instead will be rare and unpredictable - what he refers to as 'Black Swans'. Why Black Swans? Before Australia was colonialized by the British, Europeans believed that all swans were white. That is, until they arrived on the shores of Australia to discover that their assumptions were wrong - and that black swans exist.
Like his first best-seller, Taleb continued to explore risk and uncertainty. Both of his books are in my opinion the best on these subjects.
Family Village Tribe: The Story of Flight Centre Limited - Mandy Johnson
Another Tony Holley Special! This is a great read about one of Autralia's most successful franchises.
The Millionaire Next Door: The Surprising Secrets of America's Wealthy - T. Stanley & W. Danko
Also a Tony Holley Special - this book surprised me by confirming that my behavior, though significantly different to my friends, is validated. I highly recommend it if you are open and willing to look at yourself critically and change patterns of behavior.
The Power Laws: The Science of Success - Richard Koch
A birthday present from - you guessed it - Tony Holley. This is along the lines of Latticework's multiple mental models - and actually lists the different laws and how they can be applied.
Decision Traps: The Ten Barriers to Brilliant Decision-Making and How to Overcome Them - J.E Russo & P.J Schoemaker
Decision making should become a science in its own right, and a mandatory course in all MBA's. What is Wisdom but the ability to discern the best course of action, and to see through the illusions that blind us.
The Long Tail: Why the Future of Business is Selling Less of More - Chris Anderson
Understanding the Long Tail concept is essential in understanding how business has been forever changed by the knowledge sharing phenomenon that is the internet. Authored by Wired Magazines editor, he explores how niche markets and unlimited shelf space has changed nature of business. Thought-provoking. I highly recommend it.
Against the Gods - Paul Bernstein
The skill of understanding, recognizing and minimizing risks is integral to successful value investing. This is a great book to hone this skill. It draws from history and biographies to trace the development of risk management. It's up there with Taleb's books.
The Art of the Long View - Peter Schwartz
Peter Schwartz is one of the world's 'futurist pioneers'. This book is not about predicting the future, but rather about preparing for the future. It discusses how to think about possible scenarios in the future in order to make better decisions in the present.
Ishmael - Daniel Quinn
If I was to choose 5 books that had the most impact on my life, this would be one of them. There is a quote on the front cover of the book by Jim Britell from the Whole Earth Review - "From now on I will divide the books I have read into two categories - the ones I read before Ishmael and those read after." - I couldn't agree more. I read this whilst diving in Vanuatu - and I remember being troubled by the books ideas. It challenged my core outlook of the world and the paradigms I held true. Quinn is a master story teller and I could not recommend his writings enough. I have bought tens of copies for friends and loved ones.
The Story of B - Daniel Quinn
See review above.
My Ishmael - Daniel Quinn
See review above.
The Lexus and the Olive Tree - Thomas Friedman
Thomas Friedman is a multiple Pulitzer Prize winner, regular New York Times columnist - and a great writer and futurist. Although some of this book is out-dated, his ideas on globalization are mandatory reading for those who want to gain a better grasp on the world we live in today. Concepts such as 'the electronic herd' must be understood to remain in-sync with today's investing environment. Chapter 3 - "and the Walls Came Tumbling Down" - is great - and discusses 'soft power' - how the West can positively influence oppressive regimes without using military force - but rather by using global media and satellite TV. The concepts regarding the 'democratization of information' were way ahead of its time - (considering the fact that it was written in 1999) - before the blogging era.
The World Is Flat - Thomas Friedman
See above review. In his latest book, Friedman continues from where he left off in the Lexus and the Olive Tree, to share his insights of what our future is going to look like.
The Richest Man in Bablyon - George S. Clason
A short and easy read, this best-selling classic offers timeless wisdom on how to generate and maintain wealth. The beauty of the ideas contained in the book are that they are simple and common sense. Readers will say 'obviously' - and yet very few have the discipline to implement these.
Tuesdays with Morrie - Mitch Albom
Albom's book - a true story and best-seller, also places on my 'top 5 books of all time'. I read it in one sitting (on a flight from SF to NY) and have bought tens of copies for friends. This book nourishes the soul and serves as a reminder of the things that are truly important in our lives. Make sure you have a box of tissues - I guarantee you'll need it.
Man's Search for Meaning - Viktor Frankl
This is also one of the top 5 books that has had a major impact on the way I view the world. Viktor Frankl, neurologist, psychiatrist and holocaust survivor, brought to the world his theories of logotherapy. Absolutely brilliant. I have bought tens of copies for friends and loved ones.
The Tipping Point - Malcolm Gladwell
Both of Gladwell's books are must reads. In the Tipping Point, he examines why and how ideas and trends catch on and spread. The chapter on 'mavens' and 'connectors' (especially on Lois Weisberg) was superb.
Blink - Malcolm Gladwell
If you believe in 'gut instincts' or a 'sixth sense' then you will want to read this book. In this book, Gladwell examines how we are able to sub-consciously make snap-decisions - and why it is often best to go with our first instincts. This book deals with how we often 'just know' something without really being able to explain why we know it, and how this is one of the most powerful skills that we have. This book shows how we can develop these skills and how these can help us make better decisions.
Freakonomics - Stephen D. Levitt
The cover refers to the author as a 'rogue economist' - and that title could not be more appropriate. Levitt, a brilliant researcher and writer, draws from various fields and statistics to show his readers that conventional wisdom and opinion is often incorrect. This is a book that encourages you (leaves you little choice) but to think critically.
The World as I See It - Albert Einstein
At little over a 100 pages in length - this collection of Einstein's writings touches on his views on wealth, science, politics, education, religion and on the Jewish people. Insightful.
Everyday Irrationality - Robyn Dawes
Filters Against Folly - Hardin Garrett
