One of my favorite parts about investing is the constant opportunity to learn about new subjects. Some of the most important subjects are business topics and investing topics. So I will cover some of the best investing business books that I read this year.
Few books that I read this year that I’d love to share with you all. Let’s start the list of my top investing in business books of this year.
1. Richer, Wiser Happier by William Green.
I’ll start off with my absolute favorite book of this year. Richer, Wiser Happier by William green. Each chapter deserved its own article, such an interesting book to read.
You can find some of the great mental models, the habits, and the practices of some of the world’s best investors, along with that you’ll have a lot of biographical information about investors such as Monash, probably Howard Marks, and sir john Templeton. So if you’re looking for a book, that’s going to teach you how to run a discounted cash flow or calculate the intrinsic value of the business, then this book will provide the tools to think about concepts.
But it will not actually provide any technical instruction. But a lot of the concepts in this book actually make thinking about those ideas a lot easier.
You’ll find guidance for thinking, long term and finding great companies, and being extremely patient.
There’s this page called five lessons with a long shelf life that comes directly from the case in the Zakaria chapter, that page alone is probably worth more than the entire book. Maybe worth more than this whole stack of books combined. So if there’s one book that I would recommend to investors and even non-investors alike, it would be this one. William Green has had a long career interacting with a bunch of these famous investors, and some of them, unfortunately, are no longer around with us.
But for instance, Sir John Templeton has exclusive interviews that he gave years ago. He has exclusive interviews going back decades with investors like Bill Miller. If you not only want to live a better life but also have a better investing mindset, then this book is a must-read.
2. Alibaba the house that jack ma built
Another great book that I read this year was called Alibaba the house that jack ma built. Seeing Charlie Munger had invested in Alibaba, intrigued me to read about the business of Alibaba. I mean I was familiar with the name, but I just assumed that it was some amazon clone coming up in china.
Although this book is a few years old at this point – does a wonderful job of explaining some Of the core businesses, especially the e-commerce business within Alibaba.
Because it is old, it misses out on some of the bigger opportunities going forward for baba, including the cloud computing business.
But it really deepened my understanding of both the foundational culture, Jack Ma’s tenacity, and the e-commerce business in general.
While it does tell the backstory of Jack Ma’s foray into business, it also talks about how Alibaba competed with some American giants that came into China, such as yahoo and eBay.
How did Jack Ma and Alibaba eventually beat those newcomers?
So it’s a really interesting look into the early landscape of china’s e-commerce businesses and a great way to just understand Alibaba a little bit better.
3. Ask Iwata
Next up, we have a short but very impactful book called Ask Iwata. This is a compilation of all the writings that Satoru Iwata has given throughout his career as the former CEO of Nintendo. Sadly, he passed away in 2015, but he oversaw such behemoth consoles, such as the Nintendo V and the Nintendo Ds. Which were completely revolutionary and much beloved by the fan base. I have an interest in Nintendo not only from an investment perspective but as a fan of the company.
It’s a company that I want to be an investor. I know that I’m going to be a lifelong participant in their products. By reading this book, hopefully, you’ll understand some of the biographical information about Iwata, which is interesting in and of itself his development from being an actual game developer to being an executive with Nintendo. Additionally, you’ll learn about how he tried to run his business. How he interacted with the employees in his hire. How he helped shaped Nintendo to actually build their games building software that is led by hardware design.
There are a lot of little nuggets of wisdom in here. Hopefully, you’ll get some insights about Nintendo. Get some insights about management.
The back of the book reads, On my business card, I am a corporate president. In my mind, I am a game developer. But in my heart, I am a gamer.
Definitely a must-read book.
4. 5 Rules For Successful Stock Investing by Pat Dorsey
Next on the list is 5 rules for successful stock investing by none other than the legendary Pat Dorsey. Pat Dorsey has been one of these investors that I’ve really come to love this year. His long-term orientation of finding high-quality companies at reasonable prices is really attractive to me.
Dorsey is somebody that I’ve been studying a lot. So, of course, I had to pick up one of his books. He wrote this when he was still the director of stock analysis at morningstar and since then he has opened up his own fund Dorsey asset management.
Where do I even start with this book?
I mean it’s got so much packed into it and it does look big, but it’s worth reading every single page.
In the beginning, the book covers his thoughts on how to find business moats, which is basically a fancy way of saying what kind of competitive advantage does a business has.
How durable is that competitive advantage?
Finding durable moats is basically Dorsey's claim to fame, but in this book, he also gives a great introduction to understanding financial statements, it is basically a guide.
He walks through examples of reading income statements, the balance sheet, and the statement of cash flows. It’s really great stuff and Dorsey is such a clear writer that it’s really easy to follow. If you’re brand new to investing, I would recommend this book as one of the first few technical, investing books that you would read to get started. Learning how to invest for yourself Dorsey even covers how to calculate the intrinsic value of companies based on the discounted value of their future free cash flows. He also goes through an example of how he would invest in a few socks from top to bottom, the entire process. Now it might be a little bit dumbed down compared to what he actually does, but you get a real sense of what it looks like to think about a stock.
All the way from the financial statements through a moat all the way to valuation – and he didn’t need to go this far. But in the end, he provided an extra bit of value where he goes over, probably 10-15 different sectors. Such as software companies, utility companies, banks and he goes through with other morningstar analysts. Who covers those areas specifically and basically tells you how to think about the valuation for these different types of sectors.
So if you don’t know anything about banks read the chapter where he tells you what makes a good bank profitable and what makes a good bank a good investment.
Definitely check this book out highly recommend it
5. The Little Book That Builds Wealth By Pat Dorsey
Another on the list is again a wonderful book by Pat Dorsey. This one is a little bit more digestible, but it is just as important. While the 5 rules for successful stock investing cover a bunch of different concepts. Some more pertinent to actually thinking about investing in companies from evaluation or a financial statement perspective.
The Little Book that builds wealth, this book covers solely moats now. In my opinion, the moat is the reason why financial statements look good. So if the company doesn’t have a moat or you can’t understand the moat of the company. Then looking at the numbers might not make a whole lot of sense to you. It might not help you understand the business at all.
This book will help you identify why good numbers might not be a good investment for the company. The reason why moats are so important is that they really help you form a picture of the present and the potential future for that business. Depending on how durable is the advantage of the business. So this is a book you could probably read within the day.
In this book, Pat Dorsey covers in-depth the four different types of moats that he has identified in businesses in general. Those modes are intangible assets, switching costs, network effects, and cost advantages for businesses. So if you want to get a better understanding of those concepts, I would highly recommend this book.
There isn’t a ton of information on actually valuing these companies beyond a few ratios. I would definitely recommend the five rules for successful stock investing if you’re interested in that concept as well but again Dorsey writes this for any audience. So, if you’re trying to convince a family member, maybe investing in companies for the long term is the best approach. Then maybe this is a good book recommendation for them.
So if you’re, an investor focusing on wonderful businesses at reasonable prices that are going to grow for a long time, then you need to read this book.
6. Acquired Multiple by Tobias Carlise
Most of these books are little. But little books, pack a powerful punch, another on this list is yet another little book, called The Acquirers multiple by Tobias Carlise.
Is this an important book?
This is another book you could probably read in a day, but you’ll get a year’s worth of information out of this book. The main thrust of this book is understanding investing in deep value companies. He actually does a study comparing the long-term compounder approach that is proselytized by Charlie Munger and Warren Buffett.
Tobias Carlise compares that to investing in deep value companies. Things that can be cheap, quantitatively, and statistically. He finds the quantitative approach is actually outperforming in the long run. Another key takeaway is the namesake of the book, which is the acquirers multiple.
"The acquirer’s multiple is the enterprise value divided by operating earnings." - Acquire Multiple Book
Think of the enterprise value as the price you pay and operating earnings as the value you get. The lower the acquires multiple, the more value you get for the price you pay and the better the stock.
So basically, the acquires multiple gives you a ratio or a quantitative way to compare companies based on the attractiveness of their price. The general idea is that the lower requires multiple, the better the price. This book is also great from a biographical standpoint because he covers the early years of the Buffett partnership and he covers other investors like Carl Icahn and Daniel Loeb. In all three cases, they use this deep value approach with the acquirers multiple to make huge gains in the market. You absolutely have to read this if you’re interested in investing.
7. The Minimalist Entrepreneur by Sahil Lavinia
This book is The Minimalist Entrepreneur by Sahil Lavinia.
The founder of Gumroad. Gumroad is a website that allows creators to post content and get paid for that content. So if you’ve written an ebook Gumroad is a great place to distribute that to anybody who wants to buy. You just post a simple link user click it go through with the payment and the product gets sent to them.
It's a really good idea, and I wish I had thought of it. I would absolutely recommend this book to anybody who is considering starting their own business. Even if you’re, in the middle of that journey please read it. But this isn’t just any book, because the main point of being a minimalist entrepreneur is that your number one goal is to be sustainable and profitable at the earliest stage. Without raising millions of dollars from VCs.
We want to bootstrap ourselves and run this business in a sustainable way. I think this is a much more realistic and achievable approach for 99 of the businesses out there.
In the first chapter, Sahil Lavinia lays out the ground rules for what it means to be a minimalist entrepreneur.
First, you start with the community you build as little as possible, sell to your first hundred customers and the list goes on and on. But basically, the goal here is to build a business that is sustainable and is one that you would want to run for possibly the rest of your life. Sahil offers some wonderful ideas of how to think of business ideas, how to generate arbitrage opportunities. For where there is a missing service in a market that you think that you could provide. There’s always that age-old recommendation of building something to solve your own problem. So this book has been really great for me, especially the beginning parts of the book because that’s more about generating business ideas.
I am still interested in the concepts of building your minimum product or what I think he calls the manual viable product. Which are you don’t even need to build code necessarily. If you’re approaching this from a SAAS product perspective, you can do things manually and start a business that way.
Sahil has a lot of credibilities because he has been kind of through it all, especially with Gumroad. He was actually working as an engineer at Pinterest. He had hopes of being the next unicorn with Gumroad and he ended up transitioning because of some failure to be a minimalist entrepreneur. This has actually been a better route for him.
If building a sustainable business and trying to help you with a business plan, is something that piques your interest. Then I would highly recommend this book as one of the best books that I read this year.
I hope you enjoyed that rundown of some of the best investing and business books that I read this year.
I will make it a point to go through even more of them again. I thank you so much for your time.
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Don't forget to comment your fav book in the comment sections.