QUALIPORT
The Best Books On Buffett

By Maynard Paton (TMFMayn)
August 9, 2005

He's accumulated about $40b through the stock market and tells everyone how he's done it via his famous Shareholder Letters and annual meetings. No wonder Warren Buffett is the subject of more books than any other investor.

For those wanting to know more about Buffett's stock picking techniques, The Essays Of Warren Buffett must be the first port of call. As Buffett comments: "Larry Cunningham has done a great job collating our philosophy... If I were to pick one book to read, this would be the one." The praise is not surprising however, since Cunningham's book is entirely based on Buffett's own Shareholder Letters. Where Cunningham 'adds value' is by focusing on all the important topics and re-arranging them into their own chapters.

The best book about Buffett 'the man and his life' is Warren Buffett: The Making Of An American Capitalist. It's a fascinating read, detailing Buffett's family, his school days, his route to riches via pinball machines/delivering newspapers/horse racing tipsheets, his apprenticeship with Ben Graham, the success of his investment partnerships, his venture into textiles and buying Berkshire Hathaway (NYSE: BRK.A), and so on.

Roger Lowenstein's tome provides many fascinating insights into Buffett's character, such as the time he saved money by using a dresser drawer as a bed for his baby daughter, the time he suddenly realised the wallpaper had changed in his study (his wife changed it years before), and the time he breezed past his son -- who was lying in agony on the floor having fallen while changing a lightbulb -- to immerse himself in a pile of annual reports.

Be like Buffett

One man who met Buffett in the early days (but unfortunately didn't back him with any money) was John Train, author of The Midas Touch. First published in 1987, Train's book was the first to document Buffett's investment strategies and covers familiar topics such as Ben Graham, business franchises, margin of safety and economic goodwill.

Because of its age, Train's book stands out from the myriad of later publications because it gives more attention to Buffett's earlier (and sometimes less well-known) stock picks. The book also contains some very useful Buffett industry commentaries from the early 1970s bear market and a roundup of many Berkshire investments long since forgotten by many.

Robert Hagstrom is a prolific Buffett author and his first title, The Warren Buffett Way, was the first to put the accounting part of Buffett's strategy under the microscope. Hagstrom uses Buffett stocks, such as Coca-Cola (NYSE: KO) and Gillette (NYSE: G), to evaluate operating margins, 'owner earnings', return on equity and discounted cash flow calculations. Hagstrom presents a decent rundown of the core Buffett principles, too.

Other books in the Hagstrom stable are The Warren Buffett Portfolio, which explains the benefits of 'making big bets on high probability events' and The Essential Buffett: Timeless Principles for the New Economy. The latter covers much the same ground as his other volumes, but the highlight is Bill Miller's explanation of going about finding great 'tech franchises'.

Another invest-it-like-Buffett book comes from Mary Buffett, ex-daughter-in-law of the great man, and Buffettology. Again, a competent book on the Buffett basics, which gives high regard to Mr Market, consumer monopolies and business perspective investing.

One-liners

Janet Lowe's Warren Buffett Speaks is aimed at for those readers wanting a quick and simple guide to Buffett's investment philosophy. It's a collection of classic Buffett one- and two- liners, and sources not only include those Shareholder Letters, but numerous interviews, speeches and magazine articles as well.

Finally, for investors wanting to ride with Buffett rather than attempt to emulate him, Robert Miles (simpleinvestor on Fool.com) and his 101 Reasons To Own The World's Greatest Investment is an ideal read. The 'world's greatest investment' is, of course, Buffett's Berkshire Hathaway and though there's a bit of repetition in places, no other book reviews his investment vehicle from so many angles.

All the above titles are easy reads and are worthy members of any investor's library. 'Must haves' for Buffett fans are The Essays Of Warren Buffett and Warren Buffett: The Making Of An American Capitalist, with The Midas Touch and The Warren Buffett Way for those trying to put Buffett's words into practice. That said, undoubtedly the very best book on Buffett will be the one Buffett hopefully gets round to writing himself.

Order Now From The Fool's Bookshop: The Essays Of Warren Buffett | Warren Buffett: The Making Of An American Capitalist | The Midas Touch | The Warren Buffett Way | Buffettology | Warren Buffett Speaks | 101 Reasons To Own The World's Greatest Investment | All Buffett Books...

This article was first published in November 2003.

Portfolio value

Holding	Number of shares	Closing price 08/08/05 (p)	Value (£)
Associated British Ports	681	463	3,153.03
Emap	372	838	3,117.36
Halma	1,920	148.75	2,856.00
Johnston Press	1,608	491.25	7,899.30
London Stock Exchange	2,018	540	10,897.20
Cash			408.24
Total			28,331.13