Warren Buffett Book Reviews

The following Warren Buffett book reviews contain details of publications that contain some of the most important business and investment advice ever set onto paper.

Who else would you take advice from about investment?

Warren Buffett is quite simply the master of this game and his strategies are or should be of massive importance to anyone who wants to understand investment.

It is my personal opinion that whilst he is clearly the most successful investor who has ever lived, he is actually a business philosopher. By reading some of his thoughts or essays, it quickly becomes clear that Warren Buffett is a very deep thinker.

Unlike others, his deep thoughts have been focused on business, management and investment. When carried out over many decades, these thoughts are like a library of knowledge.

Ok - I am waxing a little too lyrical. Can you tell that I am a fan?

And if you plan to be a profitable investor, you should become a fan too!

As ever, working through the publications discussed in these Warren Buffett book reviews will take time and effort. These are more like a job or retraining with a new education than relaxing evening reading. But hey - working is where the money is!

Best advice? Buy the books and slowly work through them. Take the time you need to understand their concepts and you will become a much better investor.

Buy a high-end scientific calculator - you'll find you need it to fully understand the math he does in his head! - and start to read around the topic of value investment. It could be the most profitable thing you ever do.

The Intelligent Investor by Benjamin Graham

There can be no coincidence that The Intelligent Investor by Benjamin Graham is both the most important book written about investment and the book that apparently sits constantly on Warren Buffett's desk.

In fact, on the cover, Warren Buffett is quoted as saying, 'By far the best book on investment ever written.' How can you argue with that?

Legend has it that Buffett re-reads the book before he makes an investment. Apparently, he feels that every reading stimulates the mind to further ideas and subtleties.

In his early years, Buffett was a student in an investment class taught by Ben Graham. He describes Graham as his most important influence.

The book itself is not a particularly easy read. The core of the book forms the basis of value investment (information here). It has been published and revised and republished many times, and still remains a massive influence in the world of stock markets - even though Graham passed away in 1976.

As time has passed, the methods described by Graham (information here) to assess a company have been superceded. Computing power has exploded and this has put much more complex investment tools into the hands of most amateur and all professional investors. It is also worth noting that legislation has been tightened significantly which, hopefully, means that an investor is less likely to be defrauded by management. Hopefully...

That said, The Intelligent Investor by Benjamin Graham was still the first book to suggest and detail investment analysis. It also explains much about the approach and mindset that a successful investor should have. Concepts such as 'Mr Market' are explained.

Another very important concept detailed in the book is that investment should be "businesslike", even for the amateur investor. This one concept has literally changed the nature of investment and stock markets.

There is quite simply too much to explain here. It is a must buy/read book for any potentially serious investor. It is to investment what Adam Smith and The Wealth Of Nations is to economics.

Any investor that wishes to understand the workings of the stock market (information here) must read this book. Quite simply, every other serious investor has already devoured their copy. If you do not have a copy, you really must get one!

Warren Buffett Speaks by Janet Lowe

An excellent read, fully of witty quotations is: Warren Buffett Speaks by Janet Lowe.

As far as your author can tell, Janet Lowe has trawled the many annual reports, speaking arrangements and interviews given by Warren Buffett to find some of his many gems.

For example:

'If we are to have a 15% gain, we have to make $400 million (a year) before tax, or $300 million net, which is about a million a day - and I'm spending today here.'

and

'Charlie and I never have an opinion on the market because it wouldn't be any good and it might interfere with the opinions we have that are good.'

To be clear, this book will not teach you to invest, but Warren Buffett Speaks by Janet Lowe is often funny, informative and profound. It is well worth a read - and if you want to see some of Buffett's pearls of wisdom, it is a much quicker read than his many annual reports at Berkshire Hathaway.

It will also give you an insight into how Buffett lives. In some ways, he is extraordinary and in others, very normal. As with everyone on earth, he has his little habits and preferences and many of these are explored - for example, his love of Cherry Coke.

And yet, the book also discusses some of the less normal aspects of his life: his relationship with Charlie Munger, his private jet, his role on Wall Street and many other billionaire only experiences.

The book was first published in 1997 so there are clearly many more gems and quotes that could be included, but as a nice and fun book with a potentially useful theme, it is worth the price of purchase.

It is worth noting that at the time of publication, there were very few books about Buffett - these days it is practically an industry in itself. This means that his thinking is explained in much greater detail elsewhere in newer publications.

Buffett The Making Of An American Capitalist by Roger Lowenstein

Buffett The Making Of An American Capitalist by Roger Lowenstein is an interesting read which was very much ahead of it's time.

When first published in 1995, it was offering a profile that was very much required. Buffett was in the news and within the investment world was a major star, but very little was known about him. This biography helped to build his reputation further and get more of his background into the wider public domain.

There was little known about his investment methods at the time and though this book does not explain his methodology in much depth, it did provide an insight. At the time, Buffett was well known for not divulging his secret.

Simply put, he knew that the more information the world knew about his methods, the harder it would become for him to outperform the market and his peers. His silence was therefore designed to protect his competitive advantage of the investment world.

However, the book does contain a very detailed rationale behind Buffett's dislike of the Efficient Market Theory and his well known explanations about coin flipping and investment managers. I won't go into more here - you'll need to read the book!

Many topics are discussed, such as using borrowed money, his circle of competence, his thoughts about a concentrated portfolio and of course details of his investments.

One fact shines through from the book very clearly: Warren Buffett is a very intelligent man.

His powers of reasoning and logic are evident and it is these which clearly help make him the superior investor that he is. No matter what your thoughts about Buffett, the logic in his decision making is superb, a lesson to us all!

Details of investments and deals evidence how clearly he thinks about a business and his own competencies relative to those firms. Frankly, his powers of analysis put most of the rest of us to shame.

This biography is well written and entertaining and for those with a desire to understand more about either investment or the man, Buffett The Making Of An American Capitalist should prove to be well worth a read.

The Warren Buffett Way by Robert Hagstrom

For several years, the best description of Warren Buffett and his deals was The Warren Buffett Way by Robert Hagstrom.

As an analysis of Buffett's many investments from the outside looking in, it is an excellent book. First published in 1994, it looks at many of his ideas and most successful purchases. These holdings are analysed within the parameters of what was known at the time about Buffett's strategies - using the basis of 'tenets' that must be adhered to.

Many of his major purchases are investigated. When published, this book was one of the few places that analysed his decisions. Subsequent books and remarks by Buffett have helped to clarify much of his thinking - but this was where many of the theories were first discussed.

This approach works as it explains point by point why the company made a sound investment and why the strategy is logical and successful. If you want to understand Warren Buffett's investments in a clear and concise way, this is a great way to go about it.

Of course, the book also discusses the managerial relationship at Berkshire Hathaway with long time business partner and friend, Charlie Munger. Theirs is clearly an intriguing relationship - and an immensley profitable one!

More than a passing look is also given to the intellectual framework for his success and the influence of both Ben Graham and Phil Fisher.

His early investment thinking was formed during his time as a student of Ben Graham, author of The Intelligent Investor. This philosophy revolved around buying undervalued businesses and holding on until the stock market recognised the value and repriced the assets.

Of course, this strategy required a large portfolio of assets and by definition, involved purchasing assets in some businesses that were in deep trouble. Good businesses invariably sell at good prices!

If after two years, a profit had not been made, Graham recommended simply selling the holding (if possible) and moving on to another, more appealing, corporation.

A number of less than spectacular investments later, his investment philosphy was greatly influenced by the writing of Phil Fisher and the idea of a "business franchise", otherwise known as the protective moat that protects a business model.

It was this combination of buying excellent businesses with an impregnable business franchise at excleent prices when the market discounted their worth has made Buffett incredibly wealthy.

In short, if you plan to buy a book or two to help you understand successful investment at a higher level, The Warren Buffett Way by Robert Hagstrom should prove to be a very wise purchase.

Buffettology by Mary Buffett and David Clark

Summary: Buy This Book! You will find that you really can learn lots about how Warren Buffett thinks about, invests in and manages businesses.

As far as I am concerned, Buffettology by Mary Buffett and David Clark, is a truly excellent book about investment in general and Warren Buffett in particular.

The book is designed to teach his methods rather than be a biography or full of witty anecdotes. In truth, there were a few parts of the book which I did not manage to understand - even with my calculator in hand. I came to the conclusion that this is why he is Warren Buffett and I am not...

These few complexities aside, there can be few books ever written which explain more about successful investing. Buffettology has an interesting inside viewpoint which offered access most will never have - and had not had before this book was published in 1997.

Do not be fooled though. Investment is work and this book will need work and effort to understand. It will teach any investor how to work in the most effective way possible.

In short, it explains the criteria that should be used for business analysis and how to filter through all the companies available to find the gems that fit the ideal form. Using this book cannot help you but improve! That is quite a claim.

For example, there is a lengthy discussion of the economic differences between 'commodity' type and 'consumer monopoly' type businesses. It is explained, by using Berkshire Hathaway as an example, how some business models are virtually doomed - no matter how great company management may be.

The advantages that this one idea can provide to an investor. Why? Because Buffett learned the hard way that some businesses are so difficult to run - because of the market that they operate in - that no management is capable of making a profit. Berkshire Hathaway was originally a textile manufacturer and no matter what Buffett tried, the economies of the textile industry overpowered his skills.

All of this said, the follow-up book 'The New Buffettology' - which I did not buy or read - struck me as an oddity. It had taken decades to have Buffett's techniques revealed, and it seemed odd that there was suddenly more to learn.

Enough of my cynicism...

This book is a MUST READ for every investor. It is as important as that. If you want to improve your results and increase profits whilst reducing your risks - buy Buffettology and apply it's teachings.

The Essays of Warren Buffett: Lessons for Investors and Managers by Lawrence Cunningham

In my opinion, the best book about Buffett is The Essays of Warren Buffett: Lessons for Investors and Managers by Lawrence Cunningham. Simply put, this book is like an MBA equivalent! It should be a MUST READ for every investor, business owner and manager.

Not only does this book cover many of the important lessons for investors offered by Warren Buffett from his annual essays and reports, but it also covers much about business management. It is hard to imagine that anyone can read this book and not learn something from it. I have found it to be such an excellent and informative book that I have read my copy three times.

The Berkshire Hathaway annual report is renowned for covering a huge amount of ground. This is partly because Warren Buffett comments on so many areas of business and management and also because the company's business interests span so many industries and locations.

The Berkshire Hathaway Annual General Meeting must be quite an event with the "Sage of Omaha" dispensing wisdom and wit for a day. Not for nothing is this annual gathering known as The Woodstock of capitalism!

As many people who are interested in investment will know, the Berkshire Hathaway annual report is available online. In fact, back issues a can all be found on the Berkshire Hathaway website.

However, these reports are always very long which makes them a tough one off read. In addition, Buffett often writes about a topic and then follows up a few years later. This means that his actual thoughts, when compiled, might be found in three or four annual reports.

Lawrence Cunningham has edited Buffett's writing covering years into coherent and often profound essays. This makes the topics much more straightforward for the reader and therefore, more useful.

The book does not cover the investment methods of Warren Buffett in the same way that Buffettology does.

However, it does cover lots of ground that Buffettology does not. For example, the book also covers accounting and valuation issues, mergers and acquisitions, common stock and alternatives to common stock.

As a pair, The Essays Of Warren Buffett and Buffettology will help your investment and business management no end. I highly recommend them both to you.

If my praise is not enough for you, Charlie Munger described The Essays Of Warren Buffett as 'Very practical', whilst Warren Buffett himself called it, 'First Class. A great job of collating our philosophy.' Need I say more?

The Tao Of Warren Buffett by Mary Buffett and David Clark

The Tao of Warren Buffett is one of those business books that builds on a reputation of a author and subject for extra easy sales. Having read it, it is easy to imagine that it was quick and simple to write and a low effort project.

But, don't let that description put you off. I have long thought of Warren Buffett to be something of an investment and business philosopher. And it is with an eye on the life and business lessons he can offer that this book was written.

As someone that has read numerous books and articles about Buffett, it seemed unlikely that this might offer anything new. But to my surprise, it did.

The reason is the additional scope. Most or all books and articles about Warren Buffett concentrate on his investing ability. Fair enough. But as with all well read and intelligent individuals, his opinions on a range of other subjects offer food for serious thought.

This book is broken down into 125 quotes which are then explained further. A few of those quotes relate to not-business-but-business topics, such as careers. As ever, he has some interesting things to say.

Each of these short quotes is then given further explanation by the authors to add some more depth and meaning to the idea.

The book is squarely targeted at stock market beginners but can easily be used to provide a quick and simple way of finding things to think about before making an investment.

One of the real benefits of his experience is that it has been gathered over decades in one core pursuit. As such, his ability to really see through the fog and offer wisdom and guidance is very valuable.

This book will probably not help experienced investors too much, but for the newcomer, or the newcomer to Warren Buffett, there is something valuable to found here.

The Snowball
Warren Buffett and the
Business of Life
by Alice Schroeder

This is a wonderfully written account of Buffett's life. It tells his story with a focus on his business thinking and drealings, which is how Buffett has clearly spent his life. Plus, of course, lots of information about his family and relationships.

There were a few things that really stood out for me, when learning about the investor behind the legend. Firstly, his total focus on becoming wealthy from an early age. Becoming super wealthy was not an accident in his case. It was obsessional even as a child.

Buffett also clearly thinks much more about compounding than the rest of us do. His understanding of the maths of money making lead him to be incredibly hard working and resourceful as a teenager, which provided a sizable lump sum to begin his investment career. That lead him to be wealthy and successful in his twenties and then onwards and upwards!

His ongoing drive also stands out. It takes a certain sort of person to be a multi-millionaire and then multi-billionaire and still want to keep going, proving yourself and striving for more. Most of us, including your author, would be doing a lot more relaxing by that stage.

His development as a public figure is also looked at. It seems that a very conscious effort was made in the eighties and nineties to get his name and reputation better known. While that has hindered him at times as an investor, it has provided the platform from which he can now speak and be taken seriously as a thinker and wise man of the American economy. It also provided more access to America's top one percent (described here) and leaders, described as "elephant bumping" by Alice Schroeder.

As might be imagined, the book looks closely at the Buffett-Munger relationship and there are some interesting concepts that crop up. One of which is that somehow Charlie Munger is also as driven to succeed. You might imagine that two such powerful personalities would constantly clash, but it seems not.

Lastly, this book is not one that is filled with investment tips and tricks. There are some, undoubtedly, and they are quite nuanced. If your focus is specifically to learn about investment on the stock market, this is probably not the best book to start with. However, if you already have some investing experience, there will be some interesting nuggets of information along the way.