Warren Buffett Predicts the Future by Bill Murphy Jr. - HTML preview

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What to Read

I can tell you’re a reader; heck, you took the time to download and read this book, which you probably could only have found if you were reading something else where it was recommended.

Buffett is a voracious reader. Here’s how he decides what’s worth his time.

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If you've read anything at all about Warren Buffett, you might know that he's a voracious reader—going back to the book he says jump-started his career at age 7.

He dives through 500 pages of information every day—and that's down from 600 to 800 pages a day earlier in his career.

If there's "executive time" on Buffett's daily schedule, it's a euphemism for sure —Buffett blocks out hours at a time simply for reading (and for thinking about the things he's read).

"That's how knowledge works," Buffett once explained. "It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it."

But not all reading is created equal. And Buffett apparently regards great swaths of our cultural cannon— including lots of stuff that's supposedly designed to make you smarter and more productive—as a waste of time.

Shane Parrish took a bit of a deeper look at the whole compound knowledge thing on his blog, Farnam Street—which, I learned from Corinne Purtill’s article in Quartz, is named for the street on which Berkshire Hathaway's office is located.

As Parrish puts it, there's “a filing cabinet of knowledge stored in Warren Buffett's brain,” much of it the result of all the stuff the 88-year-old god among investors has read over eight-plus decades.

But here's the difference between what Buffett reads, and what most other people read, according to Parrish.

“While most of us focus on consuming information that we won't care about next month, let alone next year, Buffett focused on knowledge and companies that change very, very slowly or not at all.

“And because the information he was learning changed slowly he could compound his knowledge over time. And as [Alice] Schroeder [author of the authorized Buffett biography, The Snowball] notes, Buffett has been in business for a long time, giving him incredible opportunities to create a cumulative base of knowledge.”

Parrish breaks it down into three questions, to figure out whether whatever you're about to read passes the Buffett test:

  1. Is what you're going to read marketed to you?
  2. Is it "lacking details and nuance ... [and] easily digestible?"
  3. Is it something that "won't be relevant in a month or a year?"

And, Parrish adds a fourth consideration: that Buffett internalizes what he's read, rather than just compiling it and filing it away somewhere.

Perhaps this is because he had already developed his way of reading and internalizing decades before the first personal computers.

To be frank, going by the Buffett-via- Parrish standard, I'm not sure that this column quite lives up to the test, especially on that whole "easily digestible" criteria. So we'll call it quits here.

[Editor’s note: What about this book? I’d love to hear your opinion.]

Final summary: Read to challenge yourself; read things that will matter long after you've finished.

And then, if you want to follow Buffett's lead, keep doing it every day for decades.

 

(Originally published Feb. 11, 2019)