What Does Warren Buffett Like To Read?

Much thanks to Market Folly for publishing this list:

Warren Buffett's Recommended Reading List

We're back with the latest iteration of our recommended reading list series. This time around we feature the favorite reads of none other than the Oracle of Omaha himself, Warren Buffett. Over time, he has recommended various books and here is the comprehensive list:

Common Stocks and Uncommon Profits by Phil Fisher: Regarding this book, Buffett said that, "I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits and Other Writings. When I met him, I was as impressed by the man as by his ideas. A thorough understanding of the business, obtained by using Phil’s techniques . . . enables one to make intelligent investment commitments."

The Smartest Guys in the Room by Bethany McLean: This was recommended in Buffett's annual letter from 2003 and details the rise and fall of Enron.

The Intelligent Investor by Benjamin Graham: This is an obvious choice as Buffett has said that this is "the most important investment book" and in particular has highlighted chapters 8 and 20 as essential.

John Bogle on Investing: The First 50 Years by John Bogle. This book is more aimed at the fund investing crowd given Bogle's expertise (Vanguard funds). In the past, Buffett has advocated investors who don't have much time on their hands to invest in index funds.

The Essays of Warren Buffett by Warren Buffett & edited by Larry Cunningham: There's no better way to learn from Buffett than through his own words. Buffett would agree as he says "The most representative book on my thinking is what Larry Cunningham put together."

Sam Walton: Made in America by Sam Walton: Another read Buffett recommended back in 2003, this book details how Walmart was built from the ground up

Pay Attention To The ISM Number!

Click on Image to Enlarge

I came across this chart yesterday which compares the ISM (Institute for Supply Management) Index to the S&P 500 on a year over year change basis. Next time you are listening to, watching or reading your favorite financial news make sure you pay attention to the ISM number.

To read a little more on the ISM -

http://en.wikipedia.org/wiki/Institute_for_Supply_Management

Will China Become The New World Power?

For those of you not familiar with Jim Rogers, here is an excerpt from a blog devoted to his thoughts:

"After attending Yale and Oxford University, Jim Rogers co-founded the Quantum Fund, a global-investment partnership. During the next 10 years, the portfolio gained 4200%, while the S&P 500 rose less than 50%. Rogers then decided to retire – at age 37. " --http://jimrogers-investments.blogspot.com/

Anyone that can turn $1 into $4200 in a ten year period is probably worth listening to. Imagine investing $1MM with the Quantum fund and having $4.2 Billion!!! Truly remarkable.

One of his recent interviews discusses China:

China Has Huge Reserves. The West Huge Debts.
"China saved up huge reserves for a rainy day, now it's raining and they're spending those reserves. You contrast that with the UK or the US for instance which has no reserves, has nothing but huge debts and they're borrowing, or printing, or taxing to spend their money… I'd rather be in the East than in the West."

History has shown us that world power tends to shift to the people and places that produce true economic value and have money. Unfortunately, for this great country of ours, we have become such avid consumers that we have to literally borrow billions of dollars every year from China to keep our economy from completely melting down.

For those of you who like to do your homework, check out the numbers directly from the US Treasury website. As of July 2009, China held a little over $800 Billion of US debt. http://www.treas.gov/tic/mfh.txt

Markets Down 6 Out Of The Last 7 Days!!!

Is this the beginning of a much greater decline? We think so! Tomorrow is a very important economic release day with Unemployment numbers coming out at 8:30am EST.

"The Only Investment Guide You'll Ever Need"

I just finished reading a book called “The Only Investment Guide You’ll Ever Need” by Andrew Tobias. It is definitely an interesting and quick read with some great insights. It will not solve all of your financial challenges that lie ahead, but you’d be hard pressed not to find something of value. A couple of my favorite quotes from the book:

“There is no dignity quite so impressive, and no independence quite so important, as living within your means.” --- Calvin Coolidge

“There’s an old joke on Wall Street. ‘Well,’ the joke goes, ‘the broker made money and the firm made money – and two out of three ain’t bad.’”

It is unfortunate that most clients fare poorly seeking investment returns. What’s more disheartening is that Wall Street continues to prosper while the vast majority of their clients suffer the consequences of their misguidance.