The Bill Gates Summer Reading List

Most people probably wouldn’t consider Bill Gates a value investor.

After all, Microsoft was basically the poster child for the tech boom of the 1990s – a boom that Warren Buffett famously did not participate in – and the company continues to be considered a “growth” stock today.

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But I’d have to disagree.

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Bill Gates might not be picking stocks, but he still thinks and acts a lot like a value investor. At the very least, he has more than a few things in common with Warren Buffett. Here are a few examples:

  • Bill Gates and Warren Buffett are very close friends, and the two often play bridge (and sometimes ping pong) together.
  • Gates sits on the Board of Berkshire Hathaway and Berkshire is the largest holding in the Bill & Melinda Gates Foundation portfolio.
  • The Bill & Melinda Gates Foundation’s portfolio is managed by a guy called Michael Larson. Larson is a buy-and-hold value investor, with a strategy similar to Buffett’s. Since Larson started working for Gates in 1994, the billionaire’s net worth has increased from $5 billion to $80 billion.
  • And, just like Warren Buffett (who reads 500 pages a day now and used to read 1,000 pages a day when he first started his career) and Charlie Munger (whose secret is to “go to bed smarter than when you woke up“), Bill Gates is a voracious reader and reads over 50 books a year.

So, if you’re looking for some good books to read this summer and want to expand your knowledge, here are 5 books that Bill Gates is recommending:


How Not to Be Wrong: The Power of Mathematical Thinking

by Jordan Ellenberg

Gates: Ellenberg, a mathematician and writer, explains how math plays into our daily lives without our even knowing it. Each chapter starts with a subject that seems fairly straightforward—electoral politics, say, or the Massachusetts lottery—and then uses it as a jumping-off point to talk about the math involved.


The Power to Compete: An Economist and an Entrepreneur on Revitalizing Japan in the Global Economy

by Hiroshi Mikitani and Ryoichi Mikitani

Gates: Why were Japan’s companies—the juggernauts of the ’80s—eclipsed by competitors in South Korea and China? Can they come back? Those questions are at the heart of this series of dialogues between Ryoichi, an economist who died in 2013, and his son Hiroshi, founder of the Internet company Rakuten.


The Vital Question: Energy, Evolution, and the Origins of Complex Life

by Nick Lane

Gates: Nick Lane is trying to right a scientific wrong by getting people to fully appreciate the role that energy plays in all living things. He argues that we can only understand how life began, and how living things got so complex, by understanding how energy works.


Sapiens: A Brief History of Humankind

by Yuval Noah Harari

Gates: Harari takes on a daunting challenge: to tell the entire history of the human race in just 400 pages. He also writes about our species today and how artificial intelligence, genetic engineering, and other technologies will change us in the future. Although I found things to disagree with—especially the claim that humans were better off before we started farming—’d recommend Sapiens to anyone who’s interested in the history and future of our species.


Seveneves: A Novel

by Neal Stephenson

Gates: I hadn’t read any science fiction for a decade when a friend recommended this novel. I’m glad she did. The plot gets going in the first sentence, when the moon blows up. People figure out that in two years a cataclysmic meteor shower will wipe out all life on Earth, so the world unites on a plan to keep humanity going by launching as many spacecraft as possible into orbit. Seveneves inspired me to rekindle my sci-fi habit.


Have you read any of these books? If so, I’d love to hear what you think in the comments section!

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Ben Graham, the father of value investing, wasn’t born in this century. Nor was he born in the last century. Benjamin Graham – born Benjamin Grossbaum – was born in London, England in 1894. He published the value investing bible Security Analysis in 1934, which was followed by the value investing New Testament The Intelligent Investor in 1949. Warren Buffett, the value investing messiah and Graham’s most famous and successful disciple, was born in 1930 and attended Graham’s classes at Columbia in 1950-51. And the not-so-prodigal son Charlie Munger even has Warren beat by six years – he was born in 1924. I’m not trying to give a history lesson here, but I find these dates very interesting. Value investing is an old strategy. It’s been around for a long time, long before the Capital Asset Pricing Model, long before the Black-Scholes Model, long before CLO’s, long before the founders of today’s hottest high-tech IPOs were even born. And yet people have very short term memories. Once a bull market gets some legs in it, the quest to get “the most money as quickly as possible” causes prices to get bid up. Human nature kicks in and dollar signs start appearing in people’s eyes. New methodologies are touted and fundamental principles are left in the rear view mirror. “Today is always the dawning of a new age. Things are different than they were yesterday. The world is changing and we must adapt.” Yes, all very true statements but the new and “fool-proof” methods and strategies and overleveraging and excess risk-taking only work when the economic environmental conditions allow them to work. Using the latest “fool-proof” investment strategy is like running around a thunderstorm with a lightning rod in your hand: if you’re unharmed after a while then it might seem like you’ve developed a method to avoid getting struck by lightning – but sooner or later you will get hit. And yet value investors are for the most part immune to the thunder and lightning. This isn’t at all to say that value investors never lose money, go bust, or suffer during recessions. However, by sticking to fundamentals and avoiding excessive risk-taking (i.e. dumb decisions), the collective value investor class seems to have much fewer examples of the spectacular crash-and-burn cases that often are found with investors’ who employ different strategies. As a result, value investors have historically outperformed other types of investors over the long term. And there is plenty of empirical evidence to back this up. Check this and this and this and this out. In fact, since 1926 value stocks have outperformed growth stocks by an average of four percentage points annually, according to the authoritative index compiled by finance professors Eugene Fama of the University of Chicago and Kenneth French of Dartmouth College. So, the value investing philosophy has endured for over 80 years and is the most consistently successful strategy that can be applied. And while hot stocks, over-leveraged portfolios, and the newest complicated financial strategies will come and go, making many wishful investors rich very quick and poor even quicker, value investing will quietly continue to help its adherents fatten their wallets. It will always endure and will always remain classically in fashion. In other words, value investing is vintage. Which explains half of this website’s name. As for the value part? The intention of this site is to explain, discuss, ask, learn, teach, and debate those topics and questions that I’ve always been most interested in, and hopefully that you’re most curious about, too. This includes: What is value investing? Value investing strategies Stock picks Company reviews Basic financial concepts Investor profiles Investment ideas Current events Economics Behavioral finance And, ultimately, ways to become a better investor I want to note the importance of the way I use value here. It’s not the simplistic definition of “low P/E” stocks that some financial services lazily use to classify investors, which the word “value” has recently morphed into meaning. To me, value investing equates to the term “Intelligent Investing,” as described by Ben Graham. Intelligent investing involves analyzing a company’s fundamentals and can be characterized by an intense focus on a stock’s price, it’s intrinsic value, and the very important ratio between the two. This is value investing as the term was originally meant to be used decades ago, and is the only way it should be used today. So without much further ado, it’s my very good honor to meet you and you may call me…