Warren Buffett is one of the most successful investors in history, but he does not attribute his success to luck, intuition or market timing. Instead, he credits much of his investing acumen to one simple habit: reading.
Buffett has often said that he spends five to six hours per day reading books, financial reports and newspapers. He believes that continuous learning is one of the most powerful ways to improve investment decision-making. In fact, when asked about the key to success, Buffett once held up a stack of papers and said: “Read 500 pages like this every day. That's how knowledge works. It builds up, like compound interest.”
His love of reading has shaped not only his approach to investing but also his worldview. He frequently recommends books that have influenced his philosophy, covering everything from value investing and business fundamentals to economic history and corporate strategy. For investors looking to develop a solid foundation in investing, reading the books that shaped Buffett’s thinking can provide invaluable insights.
ESSENTIAL BOOKS RECOMMENDED BY BUFFETT
The Intelligent Investor (Benjamin Graham)
If there is one book that Buffett considers essential for every investor, it is The Intelligent Investor by Benjamin Graham. Buffett first read this book in 1949 as a student at Columbia Business School, where Graham was his professor. He has called it “by far the best book on investing ever written”.
The book introduces the core principles of value investing, a strategy that focuses on buying stocks at prices below their intrinsic value. Graham details the importance of:
- Investing with a margin of safety – buying stocks at a discount to reduce risk.
- Avoiding speculation and focusing on fundamental analysis.
- Understanding market behaviour through the concept of ‘Mr. Market’, an imaginary investor who swings between irrational optimism and fear, creating mispriced stocks.
Buffett took these lessons to heart, using them as the foundation of his early investment strategy. Even today, his approach remains deeply rooted in Graham’s principles of patience, discipline and rational decision-making.
For investors, this book is a must-read because it teaches how to think about risk, valuation and long-term investing in a practical and timeless way.
Security Analysis (Benjamin Graham & David Dodd)
While The Intelligent Investor provides the philosophical framework for value investing, Security Analysis is a more technical and detailed guide to evaluating stocks. Co-authored by Benjamin Graham and David Dodd, this book is considered the Bible of fundamental analysis.
Buffett studied this book extensively as a young investor, using its rigorous approach to analysing financial statements, assessing risk and determining intrinsic value. The book covers key concepts such as:
- How to analyse a company’s earnings, assets and financial health.
- The importance of stable earnings and strong balance sheets.
- How to differentiate between investment and speculation.
Buffett has said that reading Security Analysis was like being handed the roadmap to wealth. While the book is dense and technical, it is an essential read for investors who want to master the art of valuing stocks and businesses.
Common Stocks and Uncommon Profits (Philip Fisher)
In his early years, Buffett followed Graham’s strict value investing principles, which emphasised numbers and financial statements. However, as he evolved as an investor, he began incorporating insights from Philip Fisher, whose book Common Stocks and Uncommon Profits introduced a more qualitative approach to investing.
Fisher believed that analysing a company’s numbers was important, but understanding the quality of the business was equally crucial. His book stresses:
- Evaluating management and leadership quality.
- Understanding competitive advantages and industry trends.
- Looking beyond financial statements to assess growth potential.
Buffett credits Fisher with influencing his shift from buying cheap stocks to investing in high-quality businesses that can grow over decades. His investments in Coca-Cola, Apple and American Express reflect this approach – buying companies not just because they were undervalued, but because they had enduring competitive advantages.
For investors, this book is valuable because it teaches how to analyse businesses beyond just the numbers – focusing on leadership, innovation and industry dynamics.
Business Adventures (John Brooks)
In 1991, Bill Gates asked Warren Buffett which book he would recommend on business. Without hesitation, Buffett suggested Business Adventures by John Brooks.
Unlike the other books on this list, which focus on investing principles, Business Adventures is a collection of real-world case studies about major corporations. The book explores:
- The rise and fall of big businesses, including Ford and Xerox.
- How corporate mismanagement can destroy value.
- Lessons on leadership, strategy and decision-making.
Buffett loves this book because it provides historical context for business decisions – showing that human behaviour in finance remains the same over time. The stories highlight why strong leadership, ethical decision-making and long-term thinking are essential for success.
For investors, Business Adventures is an insightful and entertaining read that offers lessons on how companies thrive, fail and adapt to change.
The Essays of Warren Buffett (Lawrence Cunningham)
For those who want to learn directly from Buffett himself, The Essays of Warren Buffett, compiled by Lawrence Cunningham, is an indispensable resource. The book organises Buffett’s best insights from his annual shareholder letters into structured themes, covering:
- Corporate governance and management philosophy.
- Capital allocation and business valuation.
- Investment principles and market behaviour.
Buffett’s letters are widely regarded as some of the most valuable reading material for investors. His ability to explain complex financial concepts in a simple, engaging and often humorous way makes this book both educational and enjoyable.
Investors who read this book will gain direct insights into how Buffett thinks about businesses, risk and long-term investing – making it a must-read for anyone serious about mastering the principles of value investing.
WHY READING IS CRUCIAL FOR INVESTORS
How continuous learning improves decision-making
Buffett’s reading habit is not just about acquiring information – it is about refining his ability to think critically, analyse businesses and make rational investment decisions. He has often stated that reading allows him to stay ahead of the curve and avoid making emotional or uninformed decisions.
Knowledge compounds just like money. The more investors read about market history, business fundamentals and investment strategies, the better equipped they are to make intelligent decisions, avoid common pitfalls and recognise opportunities.
Practical tips on how to approach investment reading
For those looking to build an investment reading habit, Buffett’s approach offers useful guidance:
- Read every day: Buffett dedicates hours each day to reading. Even 30 minutes a day can significantly improve investment knowledge.
- Focus on timeless wisdom: Buffett prefers books with enduring principles rather than chasing the latest investing fads.
- Study case studies: Learning from real-world successes and failures (as in Business Adventures) provides practical insights into how companies operate.
- Apply what you learn: Reading is valuable only if applied – investors should use insights to refine their investment strategies.
Buffett’s success is built on lifelong learning. By reading the books that shaped his thinking, investors can develop a deeper understanding of business, markets and investing principles. More importantly, they can cultivate the discipline, patience and knowledge that are essential for long-term investment success.
This Trustnet Learn article was written with assistance from artificial intelligence (AI). For more information, please visit our AI Statement.