WARREN BUFFETT Think Everyone Should Read This 9 Book ✓

 TOP 9 BOOK THAT WARREN BUFFETT THINK EVERYONE SHOULD READ 

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    5 Feb | 2021 | VISHWAJIT MIRGALE 

1) " Intelligent invester " | Benjamin Graham 

Graham, along with David Dodd, began teaching value investing as an investment approach at Columbia Business School in 1928. In 1949, Graham and Dodd published The Intelligent Investor. Here are some of the key concepts from the book.Mr. Market

Graham's favorite allegory was that of Mr. Market. This imaginary person, "Mr. Market," turns up every day at the stockholder's office offering to buy or sell his shares at a different price. Sometimes the proposed prices make sense, but other times, the proposed prices are off the mark, given current economic realities.

Individual investors have the power to accept or reject Mr. Market's offers on any given day, giving them a leg up over those who feel compelled to be invested at all times, regardless of the current valuation of securities. It is most advisable for an investor to concentrate on the real-life performance of their companies and the dividends they receive, rather than paying attention to the changing sentiments of Mr. Market as determining the value of the stocks. An investor is neither right nor wrong if others share the same sentiments as them; only facts and analysis can make them right.2

Value Investing

Value investing is deriving the intrinsic value of a common stock independent of its market price. Analyzing a company's assets, earnings, and dividend payouts can help identify the intrinsic value of a stock, which can then be compared to its market price. If the intrinsic value is more than the market value—in other words, the stock is undervalued in the market—the investor should buy and hold until a mean reversion occurs. The mean reversion theory holds that over time, the market price and the intrinsic price will converge. At this point, the stock price will reflect its true value.            

KEY TAKEAWAYS

• Economist Benjamin Graham, best known for his book The Intelligent Investor, is lauded as a top guru of finance and investment.

• Known as the father of value investing, The Intelligent Investor: The Definitive Book on Value Investing is considered one of the most important books on the topic.

• It is most advisable for an investor to concentrate on the real-life performance of their companies and the dividends they receive, rather than paying attention to the changing sentiments of the market.

• Graham also advocated for an investing approach that provides a margin of safety—or room for human error—for the investor.

Most importantly, investors should look for price-value discrepancies—when the market price of a stock is less than its intrinsic value

2 ) " security analysis " | Benjamin Graham 

Security Analysis is a book written by professors Benjamin Graham and David Dodd of Columbia Business School, which laid the intellectual foundation for what would later be called value investing. The first edition was published in 1934, shortly after the Wall Street crash and start of the Great Depression. Among other terms, Graham and Dodd coined the term margin of safety in Security Analysis.With nearly a million copies sold, Security Analysis has been continuously in print for more than sixty years. No investment book in history had either the immediate impact, or the long-term relevance and value, of its first edition in 1934. By 1951, seventeen years past its original publication and more than a decade beyond its revised and acclaimed 1940 second edition, authors Benjamin Graham and David Dodd had seen business and investment markets travel from the depths of Depression to the heights of recovery, and had observed investor behavior during both the calm of peacetime and the chaos of World War II.

The prescient thinking and insight displayed by Graham and Dodd in the first two editions of Security Analysis reached new heights in the third edition. In words that could just as easily have been written today as fifty years ago, they detail techniques and strategies for attaining success as individual investors, as well as the responsibilities of corporate decision makers to build shareholder value and transparency for those investors.

The focus of the book, however, remains its timeless guidance and advice--that careful analysis of balance sheets is the primary road to investment success, with all other considerations little more than distractions. The authors had seen and survived the Great Depression as well as the political and financial instabilities of World War II and were now better able to outline a program for sensible and profitable investing in the latter half of the century.

3 ) Common Stocks And Uncommon Profits | Philip Fisher 

Warren Buffett has called himself "85% Graham and 15% Fisher". While the works of Graham are often cited, Fisher's book "Common Stocks and Uncommon Profits" is not. Here follows a summary of this work by Philip Fisher, known as one of the greatest investors of all time.

In this chapter, Fisher discusses tailoring one's investment strategy to one's individual financial situation. There should be no doubt, however, that Fisher recommends growth stocks for all types of investors. While one can make good money investing in "bargains" rather than growth stocks, the relatively small upside of 50% does not give investors the triple-digit returns he enjoys from some of his growth stock investments.

Therefore, the decision the investor has to make has to do with the type of growth stock that should be bought. In this regard, Fisher comes up with two categories of growth companies. Those that are large and continue to grow (at the time of writing, these included stocks such as IBM, Dow and DuPont), and those that are as yet undiscovered by the institutional investors. Fisher notes that the undiscovered stocks have the most potential for excellent returns (on the order of thousands of percent), but at the same time he acknowledges that any one of them could turn out to be a dud and cost the investor his entire investment. Therefore, for those that have a stronger requirement to maintain their capital base, Fisher suggests the larger companies for their safety, and the fact that their upside should continue to be strong relative to the market. For those that can take more risks, Fisher advises a small-cap portfolio of the type of growth stocks that pass the tests of Chapter 

3.Fisher also recommends that investors who do not have the time to go through the steps outlined in Chapter 3 use a money manager. However, it is still important for such investors to understand the issues involved, so that they may ask the right questions of their manager. Noting that there are many incompetent managers, Fisher discusses some important aspects in choosing a strong manager, including a good track record, a comparison of this track record to the market, and a discussion of the manager's investing philosophy.

Chapter 5 is titled "When To Buy" as, having established that a stock is a winner (using the criteria from Chapter 3), the investor must now decide when to buy. Fisher notes that even purchases of extraordinary companies at the market heights of 1929 would have yielded handsome returns 25 years later, however, the largest returns are only possible when some thought is put into purchasing at the right time.

4 ) " Stress Test " | Tim Geithner 

He’s written a really good book — we might as well get that out of the way, as so much else about Timothy F. Geithner remains unsettled. Geithner served as president of the New York Federal Reserve from late 2003 to 2008 and secretary of the Treasury from 2009 to 2013, and so sat near the center of the American financial system as it prepared to self-destruct. He then had a courtside seat to the global catastrophe. He has rich material to work with, and he has contrived to preserve its freshness. His inability as Treasury secretary to explain himself, or his actions, or the financial crisis, or his beliefs about financial reform, to the wider public will leave many readers, I suspect, feeling they are hearing his voice on these subjects for the first time.

“I had always been a backstage guy,” Geithner writes by way of general explanation, but referring specifically to his first, spectacularly unsuccessful, public speech as Treasury secretary. “I had spent my career behind the scenes. Ever since high school, I had dreaded public speaking. . . . I swayed back and forth, like an unhappy passenger on an unsteady ship. I kept peering around the teleprompter to look directly at the audience, which apparently made me look shifty; one commentator said I looked like a shoplifter. My voice wavered. I tried to sound forceful, but I just sounded like someone trying to sound forceful.”

Geithner is clearly more at ease, and more himself, on the page than on the stage or the screen — which is, for an American public figure, both odd and charming. So much so that I finished his book half wishing he had just skipped all of the public performances required of him as Treasury secretary and instead written out what he had to say and handed it to an actor — say, Denzel Washington — to perform. “Stress Test” has surprising virtues — for instance, the skill with which Geithner draws his hard-to-describe main character. He thinks of himself — and on the evidence it’s hard to disagree with him — as a fairly ordinary person thrust into a great many extraordinary situations. His mother was a card-carrying liberal; his father a Republican who spent his career working in nonprofits in poor countries, and who voted for Mitt Romney in 2012 while his son was still in the Obama administration. The future Treasury secretary grew up everywhere and nowhere, a bit like a military brat, and came away from his childhood with a certain detachment from the American way of life: “At a local supermarket in suburban Virginia one summer, I was stunned to see an entire aisle stocked with pet food. It seemed bizarre in a world full of starving people.”

5 ) " Jack: Straight From The Gut " | Jack Welch 

Jack Welch is acknowledged by many as the greatest corporate leader of the 20th century. When he first became CEO of General Electric in 1981 the company was worth $12 billion - in 2001 it was worth $280 billion. But Welch is more than just a leader of the most successful business in the world. He revolutionized GE's entire corporate culture with his distinctive management style: the individual appreciation of each of his 500 managers, the committment to an informal but driven work style and the encouragement of candour are all part of the Welch approach. Welch's story offers the classic tale of a self-made man whose business career embodies the American dream.It was the final hockey game of a lousy season. We had won the first three games in my senior year at Salem High School, beating Danvers, Revere, and Marblehead, but had then lost the next half dozen games, five of them by a single goal. So we badly wanted to win this last one at the Lynn Arena against our archrival Beverly High. As co-captain of the team, the Salem Witches, I had scored a couple of goals, and we were feeling pretty good about our chances.

It was a good game, pushed into overtime at 2-2.

But very quickly, the other team scored and we lost again, for the seventh time in a row. In a fit of frustration, I flung my hockey stick across the ice of the arena, skated after it, and headed back to the locker room. The team was already there, taking off their skates and uniforms. All of a sudden, the door opened and my Irish mother strode in.

The place fell silent. Every eye was glued on this middle-aged woman in a floral-patterned dress as she walked across the floor, past the wooden benches where some of the guys were already changing. She went right for me, grabbing the top of my uniform.

"You punk!" she shouted in my face. "If you don't know how to lose, you'll never know how to win. If you don't know this, you shouldn't be playing."

I was mortified—in front of my friends—but what she said never left me. The passion, the energy, the disappointment, and the love she demonstrated by pushing her way into that locker room was my mom. She was the most influential person in my life. Grace Welch taught me the value of competition, just as she taught me the pleasure of winning and the need to take defeat in stride.

If I have any leadership style, a way of getting the best out of people, I owe it to her. Tough and aggressive, warm and generous, she was a great judge of character. She always had opinions of the people she met. She could "smell a phony a mile away."

6 ) " The Essay Of Warren Buffett " | Warren Buffett 

Experienced readers of Warren Buffett's letters to the shareholders of Berkshire Hathaway Inc have gained an enormously valuable informal education. This book features letters that distill in plain words all the basic principles of sound business practices.

Warren Edward Buffett (born August 30, 1930) is a U.S. investor, and philanthropist. He is one of the most eminent investors in chronicle, the basic shareholder and chief executive officer of Berkshire Hathaway and in 2008 was ordered by Forbes as the 2nd most robust person in the world on an approximated net worth of around $62 billion.Warren Buffett was born in Omaha, Nebraska. His father name is Howard Buffett and having 2 siblings. He worked at his grandpa’s grocery store. In 1943, Buffett registered his 1st income tax return, deducing his pedal and watch as an exercise disbursement for $35 for his employment as paper deliveryman. Later on his father was elected to United States Congress, Buffett was schooled at Woodrow Wilson High School , Washington. In 1945, in his fledgeling year of high school, Buffett and a acquaintance expended $25 to buy a secondhand pinball game machine, which they placed in a barber workshop. Within weeks, they possessed 3 game machines in different emplacements.

Buffett first entered at The Wharton School, University of Pennsylvania, (1947-49) where he united the Alpha Sigma Phi brotherhood. His father and uncles were Alpha Sigma Phi brothers from the chapter in Nebraska. In 1951, he changed to the University of Nebraska where he underwent a B.S. in Economics.

Buffett then enrolled at Columbia Business School subsequently memorising that Benjamin Graham, (the generator of The Intelligent Investor), and David Dodd, 2 long-familiar financial analyst*, tutored there. In 1951, he then underwent a M.S. in Economics from Columbia University.

In Buffett’s personal articulates:

I’m 15 percent Fisher and 85 percent Benjamin Graham.

The primary theme of investing is to consider stocks as business, utilise the market’s variations to your welfare, and look for a safety margin. That is what Benjamin Graham educated us. A century from today they’ll even be the fundaments of investing.

7 ) " The Outsiders " | William Throndike jr 

An outstanding book about CEOs who excelled at capital allocation." -- Warren Buffett #1 on Warren Buffett's Recommended Reading List, Berkshire Hathaway Annual Shareholder Letter, 2012 Named one of "19 Books Billionaire Charlie Munger Thinks You Should Read" in Business Insider. "A book that details the extraordinary success of CEOs who took a radically different approach to corporate management." -- Charlie Munger, Vice-Chairman of Berkshire Hathaway Corporation "Thorndike explores the importance of thoughtful capital allocation through the stories of eight successful CEOs. A good read for any business leader but especially those willing to chart their own course." -- Michael Dell, chairman of the board of directors and chief executive officer of Dell What makes a successful CEO? Most people call to mind a familiar definition: "a seasoned manager with deep industry expertise." Others might point to the qualities of today's so-called celebrity CEOs--charisma, virtuoso communication skills, and a confident management style. But what really matters when you run an organization? What is the hallmark of exceptional CEO performance? Quite simply, it is the returns for the shareholders of that company over the long term. In this refreshing, counterintuitive book, author Will Thorndike brings to bear the analytical wisdom of a successful career in investing, closely evaluating the performance of companies and their leaders. You will meet eight individualistic CEOs whose firms' average returns outperformed the S&P 500 by a factor of twenty--in other words, an investment of $10,000 with each of these CEOs, on average, would have been worth over $1.5 million twenty-five years later. You may not know all their names, but you will recognize their companies: General Cinema, Ralston Purina, The Washington Post Company, Berkshire Hathaway, General Dynamics, Capital Cities Broadcasting, TCI, and Teledyne. In The Outsiders, you'll learn the traits and methods--striking for their consistency and relentless rationality--that helped these unique leaders achieve such exceptional performance. Humble, unassuming, and often frugal, these "outsiders" shunned Wall Street and the press, and shied away from the hottest new management trends. Instead, they shared specific traits that put them and the companies they led on winning trajectories: a laser-sharp focus on per share value as opposed to earnings or sales growth; an exceptional talent for allocating capital and human resources; and the belief that cash flow, not reported earnings, determines a company's long-term value. Drawing on years of research and experience, Thorndike tells eye-opening stories, extracting lessons and revealing a compelling alternative model for anyone interested in leading a company or investing in one--and reaping extraordinary returns.

8 ) " The Clash Of The Culture " | Jone Bangel  

 Recommended Reading by Warren Buffet in his March 2013 Letter to Shareholders

How speculation has come to dominate investment—a hard-hitting look from the creator of the first index fund.

Over the course of his sixty-year career in the mutual fund industry, Vanguard Group founder John C. Bogle has witnessed a massive shift in the culture of the financial sector. The prudent, value-adding culture of long-term investment has been crowded out by an aggressive, value-destroying culture of short-term speculation. Mr. Bogle has not been merely an eye-witness to these changes, but one of the financial sector’s most active participants. In The Clash of the Cultures, he urges a return to the common sense principles of long-term investing.

Provocative and refreshingly candid, this book discusses Mr. Bogle's views on the changing culture in the mutual fund industry, how speculation has invaded our national retirement system, the failure of our institutional money managers to effectively participate in corporate governance, and the need for a federal standard of fiduciary duty.

Mr. Bogle recounts the history of the index mutual fund, how he created it, and how exchange-traded index funds have altered its original concept of long-term investing. He also presents a first-hand history of Wellington Fund, a real-world case study on the success of investment and the failure of speculation. The book concludes with ten simple rules that will help investors meet their financial goals. Here, he presents a common sense strategy that "may not be the best strategy ever devised. But the number of strategies that are worse is infinitely .

9 ) " Business Adventure " | Jone Broke

 

Business Adventures details 12 critical moments in American industry, including the rise of Xerox and Piggly Wiggly, the Ford Edsel fiasco, and the GE and Texas Gulf Sulphur scandals. Perhaps above all, Business Adventures teaches lessons about people – how they act, what makes them thrive and flounder, and what devilry they’re likely to get up to if left to their own devices. Business Adventures’ lessons are about human nature in the context of business, and though technologies and best practices change, people never do.

Penned by a long-time New Yorker contributor, one of the main strengths of Business Adventures is its wonderful prose and stories. In his blog, Gates writes:

“Brooks wrote long articles that frame an issue, explore it in depth, introduce a few compelling characters, and show how things went for them… Unlike a lot of today’s business writers, Brooks didn’t boil his work down into pat how-to lessons or simplistic explanations for success.”

We agree that the 12 case studies that comprise Business Adventures resist summary. But if you’re in it for the key lessons from Business Adventures rather than the book’s elegant prose, we’ve rounded up a few for you here.

Business Adventures: Bill Gates’s Favorite Business Book

. It’s a little young for an American president and a bit old for a pop idol. As it turns out, however, it’s a great age for a business book.

Since Bill Gates blogged about his admiration for the John Brooks book Business Adventures, it has been reshelved at the top of the Amazon and NYT bestseller lists. Business Adventures isn’t new, but it’s beloved by business tycoons like Gates and Warren Buffet for the evergreen lessons it contains.

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Business Adventures details 12 critical moments in American industry, including the rise of Xerox and Piggly Wiggly, the Ford Edsel fiasco, and the GE and Texas Gulf Sulphur scandals. Perhaps above all, Business Adventures teaches lessons about people – how they act, what makes them thrive and flounder, and what devilry they’re likely to get up to if left to their own devices. Business Adventures’ lessons are about human nature in the context of business, and though technologies and best practices change, people never do.

Penned by a long-time New Yorker contributor, one of the main strengths of Business Adventures is its wonderful prose and stories. In his blog, Gates writes:

“Brooks wrote long articles that frame an issue, explore it in depth, introduce a few compelling characters, and show how things went for them… Unlike a lot of today’s business writers, Brooks didn’t boil his work down into pat how-to lessons or simplistic explanations for success.”

We agree that the 12 case studies that comprise Business Adventures resist summary. But if you’re in it for the key lessons from Business Adventures rather than the book’s elegant prose, we’ve rounded up a few for you here.

1. A lesson from the 1962 Flash Crash:

At their core, humans are basically emotional, irrational beings. Over the course of only three days, fear and panic led the stock market to plummet $20 billion only to boomerang back up a day later. Facts are a lot less compelling than the dictates of the lizard brain.

2. A lesson from the Ford Edsel fiasco:

Pay close attention to your market. Customers’ wishes can change very quickly and it’s important to keep a finger on the collective pulse. When Ford wasn’t looking, mid-sized dropped off of their buying radar.

3. A lesson from the federal income tax system:

Sometimes, the best solution is to scrap it. Over the years, the US tax system became so convoluted, corrupt, and loophole laden that it now encourages inefficiency. The only real recourse would be a do-over.

4. A lesson from the Texas Gulf case of 1959:

Just as people are inherently irrational, you can also count on them to be pretty self serving, too. In summary: when Texas Gulf executives found out about mineral-rich ground the company had just struck, they slowly began buying up stock shares and telling their families to follow suit – all the while denying the find to the public. Thus, insider trading laws were born.

5. A lesson from Xerox’s rollercoaster success:

Never trust a rapid success. Nobody expected copy machines to take off when Xerox launched its product in 1959, but by 1964, revenue was so good that the company could afford to drop $4 million to support the UN. By 1965, however, Xerox was in trouble: while they’d been busy philanthropizing, competitors had caught up fast.

6. A lesson from Piggly Wiggly’s investment debacle:

Revenge isn’t actually so sweet – and it certainly doesn’t pay. To teach them a lesson, incensed Piggly Wiggly owner Clarence Saunders sought to buy back all of his stock from tricksy prospectors. What he got instead was near bankruptcy.

7. A lesson from the Bretton Woods Conference of ‘64:

A small group of determined individuals can prevail against a bigger, stronger foe. When a collective of savvy prospectors believed Britain couldn’t keep up the currency exchange rates, they started betting against the pound in the market. Despite odds (and a strong central bank alliance against them) they won.

We’ve skipped any mention of five of the other case studies here, but you can read all of the blinks from Business Adventures in the Blinkist library. For some clever, elegant writing, check out John Brooks’s full book