Berkshire Hathaway 2013 Annual Meeting Audience Question # 40

Warren’s and Charlie’s early investment portfolios and the books that influenced them

Warren Buffett:

OK. Station 2.

Audience Member:

Yeah. Hi, Warren. Hi, Charlie. I’m Fritz Hauser from Offenburg, Germany.

I’d like to know what 10 books influenced you the most and that weren’t written by Graham and Fisher, and I’d also like to tell you that I think it would be great if you would publish the portfolio statements of the Buffett Partnership years.

I think there are a lot of small investors that would get a kick out of knowing, you know, what you invested and how you went ahead and analyzed the companies. Thank you.

Warren Buffett:

Yeah. Well, Charlie ran something called Wheeler,Munger and his portfolio was even more interesting, so we’ll start with you, Charlie.

He ran a more concentrated portfolio than I did in those days.

Charlie Munger:

Yeah. I don’t think people would be greatly helped. You wouldn’t recognize the names, most of them, clearly, by the partnership.

You’d recognize American Express. Rattle off some of the names.

Warren Buffett:

Yeah. Well, we can start with Mosaic Tile and…

Charlie Munger:

The map company.

Warren Buffett:

… Meadow River Coal & Land. There’s hundreds of them. Flagg-Utica, Philadelphia Reading Coal & Iron, you name it.

I’ve literally owned… I bet I’ve owned 4- or 500 names at one time or another, but most of the money’s been made in about 10 of them.

Charlie Munger:

And I couldn’t name 10 books either that have… that I regard as that much better than the next 10. My mind is a blend of so many books I can’t even sort it out anymore.

Warren Buffett:

Yeah. “The Intelligent Investor” changed my life (you can get a copy of the book here), in terms of… I literally had read every book in the Omaha Public Library by the time I was 11 on the subject of investing, and there were a lot of books.

And there were a lot… there were technical books, Edwards & Magee, I mean, that was a classic in those days, and a whole bunch of them, Garfield Drew. But… and I love… I enjoyed reading them a lot. Some of them I read more than once.

But I never developed a philosophy about it. I enjoyed it. I charted stocks. I did all that sort of thing.

Graham’s book gave me a philosophy, a bedrock philosophy, on investing that made sense. I mean, he taught me how to think about a stock, he taught me how to think about the stock market, and he taught me that the market was there not to instruct me but to serve me.

And he used that famous “Mr. Market” example. He taught me to think about stocks as pieces of businesses, rather than ticker symbols or things that, you know, you could chart, or something of the sort.

And so it was that philosophy… and in some way, further influenced by Phil Fisher’s book… and Phil Fisher was just telling me the same thing that Charlie was telling me, which was that it’s very important to get into a business with fundamentally good economics, and one that you could ride with for decades, rather than one where you had to go from flower to flower every day (“Common Stocks and Uncommon Profits” – you can get a copy of the book here).

And those… that philosophy has carried me along. Now, I’ve learned different ways of applying it over the years, but it’s the way I think about businesses now.

I have not found any aspect of that bedrock philosophy that has flaws in it. You have to learn how to apply it in different ways.

So those are the books that influenced me.

And, of course, in other arenas, Charlie’s probably read more biography than anybody that I know of. And I like to read a lot of it.

We’re just about through reading the Joe Kennedy biography. You’ve read that, haven’t you, now, Charlie?

Charlie Munger:


Warren Buffett:

You know, I’m not sure you want to emulate everything he did, but it’s still interesting reading.

We read for the enjoyment of it. I mean, it’s been enormously beneficial to us, but the reason we read is that it’s fun. And, you know, it’s still fun.

And on top of it, we have gotten very substantial benefits from it. My life would have been different if Ben Graham hadn’t gone to the trouble of writing a book, which he had no financial need to do at all. You know, I would have a very different life.

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