When it comes to investing, Rule #1 investors take a similar approach to billionaire Warren Buffett’s views. It’s only fitting that some of my favorite investing books are also some of Buffett’s as well. Buffett can power through 500 pages a day and says that reading is the most important part of his job.
As investors, we’re in the business of gathering as much knowledge as we can. Here’s a list of 15 of the best investing books out there, including some of Warren Buffett’s favorites as well.
1. The Intelligent Investor by Ben Graham
This 1949 book focused on Graham’s strategy of loss minimization over profit maximization. This is the basic foundation of a Rule #1 education. Buffett wrote a preface and appendix to the 2006 edition.
This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions…
The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949. You can get it here.
2. Security Analysis by Ben Graham and David Dodd
This is the foundation textbook of value investing. Its a tough read but if you want to drill down on the numbers, this is your huckleberry.
“A road map for investing that I have now been following for 57 years.” –From the Foreword by Warren E. Buffett
First published in 1934, Security Analysis is one of the most influential financial books ever written. Selling more than one million copies through five editions, it has provided generations of investors with the timeless value investing philosophy and techniques of Benjamin Graham and David L. Dodd. Get it here.
3. Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger by Peter D. Kaufman
This book is a hot mess but its packed full of Munger’s ideas on investing.
Poor Charlie’s Almanack contains the wit and wisdom of Charlie Munger: his talks, lectures and public commentary. And, it has been written and compiled with both Charlie Munger and Warren Buffett’s encouragement and cooperation. So pull up your favorite reading chair and enjoy the unique humor, wit and insight that Charlie Munger brings to the world of business, investing and life itself. Get it here.
4. Common Stocks and Uncommon Profits by Philip Fisher
About evaluating a company’s management team. Fisher is one of the few guys Buffett points to as an influence on his investing strategy.
Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies, introduced almost forty years ago, are not only studied and applied by today’s financiers and investors, but are also regarded by many as gospel. This book is invaluable reading and has been since it was first published in 1958. Get it here.
5. The Essays of Warren Buffett by Lawrence Cunningham
These are key letters from Buffett to his partnership and to Berkshire shareholders. This is seminal wit and wisdom.
The year 2015 marks the fiftieth anniversary of Berkshire Hathaway under Warren Buffett’s leadership, a milestone worth commemorating. The tenure sets a record for chief executive not only in duration but in value creation and philosophizing.
As the book Buffett autographs most, its popularity and longevity attest to the widespread appetite for this unique compilation of Buffett’s thoughts that is at once comprehensive, non-repetitive, and digestible. New and experienced readers alike will gain an invaluable informal education by perusing this classic arrangement of Warren’s best writings. Get it here.
6. Business Adventures by John Brooks
This is the book that Buffett sent to Bill Gates when he asked Warren what his favorite book is. Twelve tales from the world of business that point to how critical management is.
What do the $350 million Ford Motor Company disaster known as the Edsel, the fast and incredible rise of Xerox, and the unbelievable scandals at General Electric and Texas Gulf Sulphur have in common? Each is an example of how an iconic company was defined by a particular moment of fame or notoriety; these notable and fascinating accounts are as relevant today to understanding the intricacies of corporate life as they were when the events happened. Get it here.
7. The Dhando Investor by Mohnish Pabrai
One of the best Ruler type investors show how to start with nothing and become wealthy using principles of business.
A comprehensive value investing framework for the individual investor.
In a straightforward and accessible manner, The Dhandho Investor lays out the powerful framework of value investing. Written with the intelligent individual investor in mind, this comprehensive guide distills the Dhandho capital allocation framework of the business savvy Patels from India and presents how they can be applied successfully to the stock market. The Dhandho method expands on the groundbreaking principles of value investing expounded by Benjamin Graham, Warren Buffett, and Charlie Munger. Get it here.
8. The Super-Investors of Graham-and-Doddsville by Warren Buffett
Buffett’s lecture to Columbia University MBA students, if you google it you can find a pdf of it for free. This is a key work about the foolishness of Modern Portfolio Management’s claim that no one beats the market except by luck.
9. The Outsiders by William Thorndike
Stunning portraits of how a great CEO allocates capital to maximize shareholder return.
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. Get it here.
10. Antifragile by Nassim Talib
This is another ‘stream of consciousness’ opus from Talib that spells out how fragility is at the heart of investment failure and anti-fragile strategies are the key to long-term success.
Nassim Nicholas Taleb, the bestselling author of The Black Swan and one of the foremost thinkers of our time, reveals how to thrive in an uncertain world.
Just as human bones get stronger when subjected to stress and tension, and rumors or riots intensify when someone tries to repress them, many things in life benefit from stress, disorder, volatility, and turmoil. What Taleb has identified and calls “antifragile” is that category of things that not only gain from chaos but need it in order to survive and flourish. Get it here.
11. Simple But Not Easy: An Autobiographical Book about Investing by Richard Oldfield
Simple But Not Easy has plenty of interest to the experienced professional, and is aimed also at the interested amateur investor. The theme of the book is that investment is simpler than non-professionals think it is in that the rudiments can be expressed in ordinary English, and picked up by anybody. Get it here.
12. Irrational Exuberance by Robert Shiller
Nobel Prize–winning economist Robert Shiller, who warned of both the tech and housing bubbles, cautions that signs of irrational exuberance among investors have only increased since the 2008–9 financial crisis. With high stock and bond prices and the rising cost of housing, the post-subprime boom may well turn out to be another illustration of Shiller’s influential argument that psychologically driven volatility is an inherent characteristic of all asset markets. In other words, Irrational Exuberance is as relevant as ever. Get it here.
13. The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, Enlightenment by Guy Spier
Guy Spier is a good friend and great investor and also a past guest on our podcast.
This book traces the arc of a transformation. Author Guy Spier started his career as a Gordon Gekko wannabe — brash, short-sighted and entirely out for himself. Then, a series of transformations and self-realizations led him from an investment banking job with a third-rate firm to managing his own fund, which has generated tremendous returns for his investors. Get it here.
14. Conscious Capitalism by John Mackey
One of the great CEOs talks about investing with integrity and leaving a positive impact on the world.
Read this book and you’ll better understand how four specific tenets—higher purpose, stakeholder integration, conscious leadership, and conscious culture and management—can help build strong businesses, move capitalism closer to its highest potential, and foster a more positive environment for all of us. Get it here.
15. Misbehaving: The Making of Behavioral Economics by Richard Thaler
Misbehaving is an arresting, frequently hilarious account of the struggle to bring an academic discipline back down to earth―and change the way we think about economics, ourselves, and our world. Get it here.
Bonus: “Rule #1” by Phil Town
This book combines modern tools with Buffett-style investing and takes you step by step through the analysis process. A must-read for new investors.
Phil Town is now a very wealthy man, but he wasn’t always. In fact, he was living on a salary of $4000 a year when some well-timed advice launched him down a highway of investing self-education that revealed what the true “rules” are and how to make them work in one’s favor. Chief among them, of course, is “rule #1”: “don’t lose money.” Other rules are: don’t diversify…think like an owner, not an investor … never, ever be seduced into thinking the market is efficient. Town also believes strongly in “betting on the jockey,” putting your faith in managers who’ve proven their financial mettle. Get it here.
Did I miss any of your favorites? Leave them in the comments and I’ll add them to my reading list.
If you’re not ready to buy Rule #1 just yet you can get some of the most valuable parts of both of my books for free by clicking the button below.
Book cover photos and descriptions from Amazon
This post was updated for 2018 with 5 new investing books to add to your list