Read these books if you want to invest like Dr Michael Burry

Best books on investing as recommended by michael burry

Michael Burry, born in 1971, is a medical doctor, having graduated from Vanderbilt University School of Medicine. Michael Burry created LLC, i.e. Scion Capital hedge fund, and successfully handled it for eight years. Then, in 2008, Michael eliminated this fund so that he could start his private investments. He was one of  the few investors who took a daring step of shorting subprime Below are some of his favorite books, which he has recommended over the years.

Michael Burry Recommended Reading List

The Intelligent Investor, by Benjamin Graham and David Dodd

The intelligent investor book cover

The Intelligent Investor is based on value investing, an investment approach Graham began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd. This sentiment was echoed by other Graham disciples such as Irving Kahn and Walter Schloss.

The Intelligent Investor also marks a significant deviation to stock selection from Graham’s earlier works, such as Security Analysis.

He explained the change as:

“The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company… I found the results were very good for 50 years. They certainly did twice as well as the Dow Jones. And so my enthusiasm has been transferred from the selective to the group approach.”

Common Stocks and Uncommon Profits and Other Writings, by Philip Fisher

Common Stocks and Uncommon Profits and Other Writings, by Philip Fisher book cover

In Common Stocks and Uncommon Profits, Fisher said that the best time to sell a stock was “almost never”. His most famous investment was his purchase of Motorola, a company he bought in 1955 when it was a radio manufacturer, and held it until his death. Phillip is remembered for using and proliferating the “scuttlebutt” or “grape vine” tool, in which he searched fastidiously for information about a company. When you scuttlebutt, you make more informed decisions due a better basis for analysis and valuation.

In the 2018 Berkshire Hathaway annual shareholders meeting, Warren Buffett called Fisher’s “Common stocks and uncommon profits” a “very very good book“. He further described how using Fisher’s “scuttlebutt” technique continues to be a good way to investing, which is still used by Ted and Todd at Berkshire Hathaway. John Train described Warren Buffett as 85% influenced by Benjamin Graham and 15% by Philip Fisher.Why Stocks Go Up (and Down), by William H. Pike Why Stocks Go Up (and Down), by William H. Pike book cover

Why Stocks Go Up and Down is an in depth introduction to stocks and bonds. It explains the basics of of financial statement analysis, cash flow generation, stock price valuation, and more. Commonly misunderstood terms such as “capitalize”, “equity,” and “diluted earnings” are explained clearly. Stock valuation methods including price/earnings ratio, price/cash flow ratio, and Enterprise Value / EBITDA are covered. The book is about fundamentals; it is not an investment system or “how to make a million dollars in the market”. The subtitle, “The Book You Need To Understand Other Investment Books” says it best. That subtitle is the result of comments received from readers over many years.

Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The World’s Most Famous Investor, by Mary Buffett and David Clark                                                                               Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The World’s Most Famous Investor, by Mary Buffett and David Clark  book cover

Here at last is a book that reveals what the public really wants to know about this legendary investor: how he determines where he puts his money. From a team with privileged insight, Mary Buffett, a savvy CEO and Warren Buffett’s former daughter-in-law, and David Clark, a successful portfolio analyst, comes Buffettology, the most detailed explanation ever of the billionaire’s unique investment techniques. Using Warren Buffett’s system to access a company’s potential economic excellence and the right price to pay for its stock, Buffettology demonstrates the actual mathematical models and equations, revolving around three variables: the yearly per share earnings figure, its predictability, and the market price of security. With Buffettology, individual investors will come to truly understand, and emulate, Warren Buffett’s masterful insight, and see that investment is most intelligent when it is most businesslike.

The Art of Short Selling, by Kathryn Staley

                                The Art of Short Selling, by Kathryn Staley book cover

The Rediscovered Benjamin Graham: Selected Writings of the Wall Street Legend, by Janet Lowe                                                     The Rediscovered Benjamin Graham: Selected Writings of the Wall Street Legend, by Janet Lowe  book cover

 

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