If you were to ask me to name one trait many highly successful people share, the answer would without doubt be: they are all lifelong learners.
Bill Gates reads 50 books on average per year and spends two weeks each year on Think Weeks, where he houses himself in a cedar forest in the Pacific Northwest and just reads for 18 hours a day.
The best investors, in particular, read a lot. Charlie Munger once joked that his children probably thought he was a book with legs sticking out. When asked about how to get smarter, Warren Buffett held up a huge stack of paper and told the audience to “read 500 pages like this every day. That’s how knowledge builds up, like compound interest.”
The question then becomes, what should you read? I have probably read hundreds of books over the past decade and can safely say that your return on time invested on each book can vary significantly. If you have limited time and want to read only the best books out there, here is what I would recommend you start with.
Best Investing Books
The Intelligent Investor by Benjamin Graham – written by Warren Buffett’s teacher at Columbia Business School and subsequent mentor, this and the next book on my list are the books Warren Buffett highly recommended on multiple occasions.
Security Analysis by Benjamin Graham and David Dodd – for more advanced readers, this book covers everything you need to know on stocks, bonds, capital allocation and the correct value investor temperament.
Best Business Books
Thinking, Fast and Slow by Daniel Kahneman – by far the best book out there on how the human mind works. A large part of successful investing is understanding the investor psychology and preventing mistakes of temperament.
The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike – a remarkable look at CEOs who were excellent capital allocators and generated significant enormous shareholder value over several decades. These are the managers you will want running your business.
Business Adventures: Twelve Classic Tales from the World of Wall Street by John Brooks – both Bill Gates and Warren Buffett highly recommend this
Best History Books
Manias, Panics, and Crashes by Charles Kindleberger – an inside look at the South Sea Bubble, banking crises and other extreme market dislocations. A great reminder that markets are not efficient.
Buffett: The Making of an American Capitalist by Roger Lowenstein – to date offers the most detailed insights into Warren Buffett and his formative years.
Titan: The Life of John D. Rockefeller, Sr by Ron Chernow – vivid tapestry of America in the early 20th century and chronicles the life of the first billionaire in history
The Autobiography of Benjamin Franklin – brilliant insight into the life of this renaissance man who was a painter, inventor, statesman, printer and author.
The Autobiography of Andrew Carnegie – one of history’s greatest industrialists and philanthropists.
Best Fiction Books
Pride and Prejudice by Jane Austen – one of the most celebrated novels of all time, offering great insight into the themes of manners, morality, marriage, courtship and education of the English gentry.
The Great Gatsby by Scott Fitzgerald – one of the greatest American novels brilliantly capturing the America of the 1920s.