Looking for a last-minute Christmas gift? Over the last 10 years, Warren Buffett has been happy to recommend 18 of his favorite books.
The wealth of wisdom
Every year since Buffett took the reins of Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) in 1964 he has written a letter to shareholders providing perspective on how the year progressed for Berkshire and its various businesses.
But the Oracle of Omaha also has not been afraid to talk a wide range of other topics. He has given perspective on taxes and government policies, the general state of the economy, his own upbringing and his family, and countless other subjects.
Buffett is also a fan of providing book recommendations. Why should we pay close attention to what Buffett is reading? It's what has made him the thinker he is today. Consider that he once said:
I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.
The Omaha World-Herald even reported earlier this year that Buffett once recommended reading 500 pages per day to a student in an investing class at Columbia University who "asked what he could do now to prepare for an investing career."
Although we might not be able to read that much, thankfully Buffett hasn't been shy about providing book recommendations for anyone over the years.
The books worth buying
Any discussion of books and Buffett has to begin with the three books that make up his "all-time-best list for the serious investor," which he revealed in his 2012 letter to shareholders:
1. The Intelligent Investor -- Benjamin Graham
2. Security Analysis (1940 Edition) -- Benjamin Graham
3. Common Stocks and Uncommon Profits -- Philip Fisher
But those are by no means his only suggestions, so let's look at other recommendations from his letters to Berkshire shareholders over the past decade.
In 2004, Buffett began highlighting books offered by The Bookworm, a local bookstore in Omaha that sold a selection of books approved by Buffett at the Berkshire Hathaway annual meetings. In that year's letter he said:
Graham Allison's Nuclear Terrorism: The Ultimate Preventable Catastrophe, a must-read for those concerned with the safety of our country. In addition, the shop will premiere Poor Charlie's Almanack, a book compiled by Peter Kaufman. Scholars have for too long debated whether Charlie [Munger] is the reincarnation of Ben Franklin. This book should settle the question.
The Bookworm boutique at the Qwest broke all records last year selling Berkshire-related books. An amazing 3,500 of these were Poor Charlie's Almanack, the collected wisdom of my partner. This means that a copy was sold every 9 seconds. And for good reason: You will never find a book with more useful ideas.
In the Bookworm's corner of our bazaar, there will be about 25 books and DVDs -- all discounted -- led again by Poor Charlie's Almanack. (One hapless soul last year asked Charlie what he should do if he didn't enjoy the book. Back came a Mungerism: "No problem -- just give it to someone more intelligent.")
We've added a few titles this year. Among them are Seeking Wisdom: From Darwin to Munger by Peter Bevelin, a longtime Swedish shareholder of Berkshire, and Fred Schwed's classic, Where are the Customers' Yachts? This book was first published in 1940 and is now in its 4th edition. The funniest book ever written about investing, it lightly delivers many truly important messages on the subject.
Buffett offered no new recommendations that year, but again highlighted the value of the book on his longtime lieutenant, Charlie Munger:
Visit the Bookworm, where you will find about 25 books and DVDs -- all discounted -- led again by Poor Charlie's Almanack. Without any advertising or bookstore placement, Charlie's book has now remarkably sold nearly 50,000 copies. For those of you who can't make the meeting, go to poorcharliesalmanack.com to order a copy.
Buffett did not give book recommendations in 2008, but considering he opened the annual letter by saying, "Our decrease in net worth during 2008 was $11.5 billion," he likely wasn't in the best of moods.
But in 2009, when Berkshire's net worth climbed by $21.8 billion, Buffett was back to his recommending ways:
Be sure to visit the Bookworm. Among the more than 30 books and DVDs it will offer are two new books by my sons: Howard's Fragile, a volume filled with photos and commentary about lives of struggle around the globe, and Peter's Life Is What You Make It. Completing the family trilogy will be the debut of my sister Doris's biography [Giving It All Away: The Doris Buffett Story] a story focusing on her remarkable philanthropic activities.
The selection of books doubled that year, but Buffett highlighted one in particular:
Be sure to visit the Bookworm. It will carry more than 60 books and DVDs, including the Chinese language edition of Poor Charlie's Almanack, the ever-popular book about my partner. So what if you can't read Chinese? Just buy a copy and carry it around; it will make you look urbane and erudite.
The wide selection didn't last long, as the book and DVD count dropped to 35 the next year. However, Buffett was back to providing his favorites:
I recommend MiTek, an informative history of one of our very successful subsidiaries. You'll learn how my interest in the company was originally piqued by my receiving in the mail a hunk of ugly metal whose purpose I couldn't fathom. Since we bought MiTek in 2001, it has made 33 "tuck-in" acquisitions, almost all successful. I think you'll also like a short book [A Few Lessons for Investors and Managers from Warren E. Buffett] that Peter Bevelin has put together explaining Berkshire's investment and operating principles. It sums up what Charlie and I have been saying over the years in annual reports and at annual meetings.
Be sure to visit the Bookworm. It will carry about 35 books and DVDs, including a couple of new ones. Carol Loomis, who has been invaluable to me in editing this letter since 1977, has recently authored Tap Dancing to Work: Warren Buffett on Practically Everything. She and I have cosigned 500 copies, available exclusively at the meeting.
The Outsiders, by William Thorndike, Jr., is an outstanding book about CEOs who excelled at capital allocation. It has an insightful chapter on our director, Tom Murphy, overall the best business manager I've ever met. I also recommend The Clash of the Cultures by Jack Bogle and Laura Rittenhouse's Investing Between the Lines.
In the most recent letter to shareholders, Buffett said:
Be sure to visit the Bookworm. It will carry about 35 books and DVDs, among them a couple of new titles. One is Max Olson's compilation of Berkshire letters going back to 1965 [Berkshire Hathaway Letters to Shareholders, 2013]. The book includes an index that I find particularly useful, specifying page numbers for individuals, companies and subject matter. I also recommend Forty Chances by my son, Howard. You'll enjoy it.
So if your reading list or Christmas list wasn't long enough already, here are 18 recommendations from Buffett to get you through the year.