The Intelligent Investor

One line: Ben Graham's case-study, general-audience distillation of value investing — the book 19-year-old Buffett couldn't put down, and the one that set his whole career in motion.

Overview

David contrasts it with the earlier, denser Security Analysis: "The Intelligent Investor is like Danny Kahneman's Thinking, Fast and Slow version of case studies, distilled down for public consumption." It had just come out when 19-year-old Buffett found it, and he was "obsessed with it" — by the time he arrived at Columbia he'd "already read The Intelligent Investor cover-to-cover," having worn out the pages rereading it.

Why it's worth reading

The book isn't recommended to listeners so much as it drives the episode's plot. It's the reason Buffett applied to Columbia in the first place, chasing the chance to study under the man who wrote it. And it's the reason he took a Saturday train to Washington and knocked on GEICO's door: he noticed the book's case studies never mentioned GEICO, despite Graham-Newman owning 55% of it — a gap that led him to Lorimer Davidson's four-hour tutorial on insurance float, and to his first major concentrated bet (75% of his portfolio in GEICO). David later explains the omission: GEICO was never a typical Graham-Newman holding — they only bought in because Graham negotiated a below-ask discount — "There's a reason why it wasn't in the Intelligent Investor."

Where it comes from

[acquired-berkshire-1-en]: David on Buffett's discovery of the book and the GEICO investigation it triggered: "Graham's book, The Intelligent Investor, had just come out and Warren was obsessed with it... Warren read The Intelligent Investor. He loves it. He's like, this is amazing." And later: "the Government Employees Insurance Company isn't mentioned anywhere in the Intelligent Investor... There's a reason why it wasn't in the Intelligent Investor."