Anderson Investment Fund, LP

Library

• The Tao of Charlie Munger by David Clark, an easy-to-read format with a compilation of Charlie quotes.
  
  
• The Intelligent Investor by Benjamin Graham, updated with new commentary by Jason Zweig. "By far the best book on investing ever written." - Warren E. Buffett
  
  
• Common Sense on Mutual Funds by John C. Bogle. A nice book with lots of statistical data. Bogle's views are strongly grounded with theory. I highly recommend all of John Bogle's writings.
  
  
• John Bogle on Investing by John C. Bogle
  
  
• Analysis of Financial Statements by Leopold A. Bernstein, John J. Wild
  
  
• Bankruptcy Investing: How to Profit from Distressed Companies by Ben Branch, Hugh Ray
  
  
• Buffettology by Mary Buffett and David Clark (Buffett does not endorse this book. It misses out on the extensive Special Situations/Workouts that Buffett continues to invest in. It's a good book to get started on Buffett's investment approach but not one to use as the ultimate guide.)
  
  
• Bull: A History of the Boom, 1982-1999 by Maggie Mahar. An incredible story that we all experienced. Highly recommended by Buffett.
  
  
• Contrarian Investment Strategies: The Next Generation: Beat the Market by Going Against the Crowd by David Dreman. Convincing empirical data that clearly demonstrates the advantages of buying bargain stocks.
  
  
• Common Stocks and Uncommon Profits by Philip Fisher. Buffett was a great admirer and I feel Charlie Munger was more of a Fisher follower than a Graham disciple.
  
  
• Developing an Investment Philosophy by Philip Fisher.
  
  
• Conservative Investors Sleep Well by Philip Fisher.
  
  
• The Way to Wealth by Benjamin Franklin. A quick read with all of the familiar quotes, "A small leak will sink a great ship" and "If you would be wealthy, think of saving, as well as of getting." Thrift, duty, hard work, simplicity.
  
  
• Benjamin Graham: The Memoirs of the Dean of Wall Street by Benjamin Graham
  
  
• The Richest Man in Babylon by George S. Clason
  
  
• The Interpretation of Financial Statements by Benjamin Graham
  
  
• Security Analysis by Benjamin Graham (1934 Edition) This is a fabulous work and should be digested slowly.
  
  
• Value Investing: From Graham to Buffett and Beyond by Bruce C. N. Greenwald
  
  
• The Warren Buffett Way by Robert G. Hagstrom. I recommend all of Hagstrom's books on Buffett. They should be read in sequence: "The Warren Buffett Way" followed by "The Warren Buffett Portfolio" followed by "Latticework" and finally "The Essential Buffett".
  
  
• Of Permanent Value: The Story of Warren Buffett by Andrew Kilpatrick (1994 Edition) A very nice guy and regular attendee of the Berkshire Annual Meeting in Omaha.
  
  
• Rich Dad, Poor Dad by Robert T. Kiyosaki. This is a quick read and a good read as an eye-opener. I don't necessarily agree with some of his stuff, but have no argument with what he labels an asset and a liability.
  
  
• Retire Young, Retire Rich by Robert T. Kiyosaki, Sharon L. Lechter (Contributor)
  
  
• Cashing in on the American Dream: How to Retire at 35: A Three-Step Guide to Financial Independence by Paul Terhorst. This book will make you re-think your lifestyle in so many ways that it is mind bending.
  
  
• How to Retire Early and Live Well with Less Than a Million Dollars by Gillette Edmunds. Written in 2000 prior to the bubble bursting. A little unrealistic today.
  
  
• Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth A. Klarman
  
  
• Moneyball: The Art of Winning an Unfair Game by Michael Lewis. Value investing applied to baseball.
  
  
• Benjamin Graham on Value Investing: Lessons from the Dean of Wall Street by Janet Lowe
  
  
• The Man Who Beats the S&P: Investing with Bill Miller by Janet Lowe
  
  
• Damn Right! Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger by Janet Lowe. Great book, highly recommend.
  
  
• Poor Charlie's Almanac: The Wit and Wisdom of Charles T. Munger by Peter D. Kaufman. A must read. This is about the Vice Chairman of Berkshire Hathaway - oft credited with taking Warren Buffett to the next investing level.
  
  
• When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein
  
  
• The Making of an American Capitalist by Roger Lowenstein. A good Buffett biography. Lowenstein also is a writer for The Wall Street Journal and Smart Money and is on the board of Sequoia Fund.
  
  
• One up on Wall Street by Peter Lynch
  
  
• The Warren Buffett CEO: Secrets from Berkshire Hathaway Managers by Robert P. Miles. A friend and regular attendee of the Berkshire Hathaway meeting in Omaha.
  
  
• What Works on Wall Street by James O'Shaughnessey. Strongly Recommended. Great data.
  
  
• Irrational Exuberance by Robert J. Shiller
  
  
• Soros: The Life, Times and Trading Secrets of the World's Greatest Investor by Robert Slater. I don't believe Soros is the World's greatest investor. He's good, but Buffett is in a different league and has a much more simple and effective model.
  
  
• The Aggressive Conservative Investor by Martin J. Whitman and Martin Shubik. Whitman runs a very successful mutual fund, Third Avenue. Great book, difficult to find as it came out in 1979. Worth the money it might cost you to buy it.
  
  
• Value Investing: A Balanced Approach by Martin J. Whitman.
  
  
• 40. Berkshire Hathaway Inc. Letters to Shareholders 1977-1995. Two bound books. (Free to shareholders of BRK.A or BRK.B with proof of shareholding; non-shareholders can send a check for $15 to Berkshire Hathaway, Inc. 3555 Farnam Street, Suite 1440, Omaha, NE 68131)
  
  
• The Millionaire Next Door by Dr. Thomas Stanley and Dr. William Danko. Fast read, good empirical data.
  
  
• The Millionaire Mind by Dr. Thomas J. Stanley
  
  
• Financial Self-Defense by Charles J. Givens
  
  
• Mosaic: Perspectives on Investing by Mohnish Pabrai. The author is a close personal friend and quite successful hedge fund manager.
  
  
• The Focus Investor by Richard M. Rockwood, Author is a friend and very successful investor. Nice summary book.
  
  
• Origins of the Crash: The Great Bubble and Its Undoing by Roger Lowenstein, A crucial account of an era of excess and folly documenting the momentous shift toward stock ownership in the US. Interesting account of the "magical rise" of profitless New Economy companies.
  
  
• Fortunes Formula by William Poundstone, A very worthwhile read with historical gambling formulas and techniques from MIT mathematicians. Edge calculations will help investors as related to portfolio concentrations.
  
  
• The Little Book of Value Investing by Christopher Browne, of Tweedy Browne Investment Firm - helped Ben Graham back in the 1930's with purchasing value stocks. Quick read.
  
  
• The Little Book That Beats The Market by Joel Greenblatt. Columbia Business School professor - A quick read that will help an investor identify cheap stocks that are growing rapidly.
  
  
• Poor Charlie's Almanac by Charles T. Munger Vice Chair to Warren Buffett, Berkshire Hathaway. A colorful and illustrated guide with speeches from "Charlie" as well as deep thinking psychological "Behavior Finance" issues.
  
  
• The Most Important Thing by Howard Marks
  
  
• The Most Important Thing Illuminated by Howard Marks
  
  
• The Rational Optimist by Matt Ridley
  
  

Video

• Vintage Buffett: Warren Buffett Shares His Wealth
  A presentation given by Warren Buffett to The University of Tennessee College of Business Administration students in appreciation for the gift of a book by Jim Clayton, Clayton Homes that led to the purchase of the company by Buffett. Buy the video for about $30 and watch it while you have breakfast and coffee with Warren!
• Warren Buffett at the University of Florida (free)

Video

• Barron's
• Financial Times
• BusinessWeek
• Forbes
• Outstanding Investor Digest
  Editor and publisher Henry Emerson has mission as to bring the most valuable material that he can - "Calendar be damned". Last edition was Dec. 31, 2004. Unconditional 60-day guarantee. $295 annual with automatic credit card renewal program. Worth it!
• The Wall Street Journal
• Value Line
  For historical contents in looking up past company financials. Don't go for their recommendations or commentary.
  
  
• Portfolio Reports
  
  
• Various annual reports (10-K's) from companies that interest me. Definitely read last 5 years (minimum) of any individual company you invest in - preferably ten years - and those of competitors as well.

Web Sites / Articles

• The classic article by Warren Buffett setting out his case on why the Market is not totally efficient. A quick read with empirical data that makes a convincing argument. It is also the appendix for the book, The Intelligent Investor. Article is based on speech from 1984 given at Columbia.
• From a 1995 speech at Harvard Law School by Charlie Munger, Vice-Chairman of Berkshire Hathaway, on Human Misjudgment and Behavioral Finance.
• Nice discussion by Munger about the mental tools required to be successful at stock picking.
• A discussion of Valuation Wave Reversion to the mean. This will make you think about the historical long-term trend of the market and possible times to enter the market. This would apply to general market valuations such as that related to owning an S&P 500 fund.
• A rare series of 10 lectures by Ben Graham presented from Sept. 1946 to Feb. 1947 at the New York Institute of Finance. Good analytical insight into securities analysis.
• Warren Buffett talk at the University of Florida Many other good audios (Robert Hagstrom's) are available as well.


• Discounted Cash Flow Analysis: web sites that will help in the calculation:
  Money Chimp
  Creative Academics
  Focus Investor

Discussion Boards

• MSN Groups Discussion Board (Berkshire Hathaway - free
  
  
• Motley Fool Berkshire Hathaway Discussion Board - subscription required
  
  
• Yahoo Finance (Berkshire Hathaway) Board - free

Annual Meetings

• Berkshire Hathaway
  Warren Buffett and Charlie Munger are on stage for 6 hours answering questions. This meeting is in Omaha, NE and typically the first Saturday in May. Now 20,000+ attendees and you need to be a shareholder or know someone that is to obtain a pass.
  
  

Other Material

• Available via e-mail are the original Buffett Partnership Letters from 1957 – 1969. Buffett liquidated the partnership due to overall stock market valuations. He subsequently went on to purchase Berkshire Hathaway.
  
  Contact the fund and we would be happy to forward them to you. There is a requirement by Mr. Buffett that they not to be posted on any web sites.

Quotes

"Our experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime.

A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind, loving diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable using resources available as a result of prudence and patience in the past."

Charles T. Munger, Wesco Annual, 1998

 

"It's not given to human beings to have such talent that they can just know everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a mis-priced bet - that they can occasionally find one. And the wise ones bet keenly when the world offers that opportunity. They bet big when they have the odds, and the rest of the time, they don't. It's just that simple."

Charles T. Munger, USC Commencement Speech, 1992

 

"The outside investor who purchases securities regardless of the immediate outlook will probably always be in a distinct minority among securities purchasers. Such an investor must be in a strong financial position. He must also be capable of curbing any tendency toward greed in his investment; he cannot attempt to buy precisely at the bottom of the market or to maximize capital gains over short periods. Finally, he must be convinced that there are important values in the company whose stocks he holds that are not reflected in the market price and are not likely to be dissipated. Without such conviction, almost any investor can be expected to panic if the market price of the security he holds declines. It tends to be much easier for outsiders to gain some degree of conviction if a cornerstone of their analysis is the financial-integrity approach. Changes in earnings can be sudden and violent, and changes in price-earnings ratios even more so.

Changes in book value, on the other hand, by definition must be more gradual. A large, relatively unencumbered book value may be an anchor to windward, both for the company with honest and reasonably competent management and for the investor who holds the stock."

Martin J. Whitman, The Aggressive Conservative Investor, p. 195, 1979

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