Nine books every investor should read

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Nine books every investor should read

This article is a list, in no particular order, of the best investing books I have read and the ones I think you will find the most helpful.

It is a list of books every investor should read.

Why nine books?

I looked at all the books on my book shelf and audio device and these were the ones I found the most valuable. I would have liked to make the list ten but could not find another that I thought would benefit you as much as the books I had already selected.

Besides, nine books to read does not sound as intimidating as ten.

Here is a picture of the books on my bookshelf.

For inclusion on the list a book must pass the “dog ear” test. When I find something worthwhile in a book I fold the page and mark the text with a pencil. Thus the more folded pages a book has the more valuable it is.

For the best prices look for the books used at Amazon or if you commute or drive a lot, buy them from Audible (www.audible.com) so you can listen to them on your mobile device.

A word of warning. Audible uses its own software that has to be installed on your mobile device, so before buying make sure your device is supported.

(Click heading for Amazon page)

The Little Book that Still Beats the Market

by Joel Greenblatt

Hardcover: 183 pages

ISBN-10: 0471733067

ISBN-13: 978-0471733065

Don’t let the title of this book fool you. It’s written in an easy to understand way by an outstanding hedge fund manager, Joel Greenblatt, who is also an adjunct professor Columbia Business School.

You can easily finish it over a weekend and probably not think the same about investing thereafter.

I would classify this as one of my must read value investing books

What you will get from this book:

  • It will teach you a statistically tested investment strategy with an excellent track record
  • It will explain it in easy to understand way
  • It will show you how to implement it in easy to understand steps
  • It even had a website where you can easily find the companies to invest in (unfortunately in the USA only)

You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits

by Joel Greenblatt

Paperback: 304 pages

ISBN-10: 0684840073

ISBN-13: 978-0684840079

This is the first book by Joel Greenblatt.

Do not let the unusual title of the book fool you, it has a lot to offer.

It extensively covers often overlooked areas of the stock market where profitable investment opportunities can be found.

It is not such an easy read as The Little Book that Still Beats the Market but a worthwhile book for more advanced investors.

What you will get from this book:

  • You will be introduced to profitable investment areas such as, spin-offs, mergers, risk arbitrage, restructurings, rights offerings, bankruptcies, liquidations, and asset sales, which are not usually considered by the average investor
  • It will give you the best places to look for these ideas and also where you can find good ideas you can copy, but you still need to do your own homework

The Little Book of Value Investing

by Christopher H. Browne

Hardcover: 208 pages

ISBN-10: 0470055898

ISBN-13: 978-0470055892

This book also has a title that may let you overlook it, but don’t.

It is written by the partner of probably the best value investment fund managers in the world Tweedy Browne (www.tweedy.com).

It’s also a book that you can finishe over a weekend. It will teach you the ins and outs of value investing in an entertaining and easy to follow way.

What you will get from this book:

  • The book is the distilled wisdom of an successful investor
  • It will explain value investing, a method of buying undervalued stocks, in an easy to understand way.
  • The book is written in an easy to understand way making it suitable for beginners and advanced investors
  • It is an easy read that can be finished over a weekend. Implementing the principles will take a lifetime
  • Ample use of examples and historical case studies is used to illustrate points

 

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The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

by Benjamin Graham

Paperback: 640 pages

ISBN-10: 0060555661

ISBN-13: 978-0060555665

Since it was first published in 1949, this book by Benjamin Graham the father of value investing, has sold over a million copies.

Warren E. Buffett called it “the best book on investing ever written.”

Look for the Revised Addition with commentary on each chapter and extensive footnotes prepared by senior Money editor, Jason Zweig which has updated the book to fit with the current markets.

This is a value investing classic and another one of my must read value investing books.

What you will get from this book:

  • Value investing explained in its purest sense
  • Explains how to make unpopular but profitable investments
  • Explains the psychology of investing
  • Clearly explains how Wall Street works and refutes investment falsehoods
  • Gives you a clear check-list to follow when making investments

Contrarian Investment Strategies – The Next Generation

by David Dreman

Hardcover: 464 pages

ISBN-10: 0684813505

ISBN-13: 978-0684813509

David Dreman is a long-time fund manager and columnist for Forbes magazine.

He is one of Wall Streets best-known and most articulate contrarian (going against the crowd) investors. This book is an updated version of his 1982 book and includes recent research on investor psychology.

What you will get from this book:

  • Investment research explained and combined with how to practically pick winning investments
  • You will be shown how going against the crowd adds to your investment returns
  • In clear how-to terms be shown how to apply the ideas in the book
  • Scientific proof why all forecasting is a waste of time
  • Learn how to override your natural tendency to under-perform the market

The Dhandho Investor: The Low – Risk Value Method to High Returns

by Mohnish Pabrai

Hardcover: 208 pages

ISBN-10: 047004389X

ISBN-13: 978-0470043899

Mohnish Pabrai is a disciple of Warren Buffett having directly copied his investment partnership structure and investment method.

This book is a worthwhile read giving the reader good insights into value investing principles and the idea of heads I win, tails I do not lose much.

The book is filled with easy to understand examples and written in an easy to understand way.

What you will get from this book:

  • Learn how to invest in companies with little downside and lots of upside
  • Gives you a keep it simple framework for investing
  • Learn how to stack the odds in your favour when investing
  • Gives you a plan on when to sell

One Up on Wall Street: How to Use What You Already Know To Make Money in the Market

by Peter/ Rothchild, John Lynch

Publisher: Simon & Schuster (April 3, 2000)

ASIN: B001I7L8BE

Until retiring in 1990, Peter Lynch was manager of the very successful Fidelity Magellan Fund, America’s biggest mutual fund.

David and Tom Gardner from Motley Fool (www.fool.com) called Peter Lynch the second greatest investor in the world after Warren Buffett.

In this book Peter Lynch explains in a straight forward way that investment opportunities abound for the layperson by simply observing business developments and taking notice of your immediate world, from shopping in the mall to the workplace.

The book has been a national best seller in the USA for good reason. It offers valuable insights in an easily understandable way.

What you will get from this book:

  • It will tell you how to beat Wall Street by using information gained from everyday life
  • Learn how you have the same opportunities as professional investors to make money in the stock market
  • Learn what information you must focus on and how to apply it
  • Learn why you really know more about investing than you think

The Essays of Warren Buffett: Lessons for Corporate America, Second Edition

by Warren E. Buffett (Author), Lawrence A. Cunningham

Paperback: 296 pages

ISBN-10: 0966446127

ISBN-13: 978-0966446128

Over the years I have read, listened to and looked at numerous books on Warren Buffett. This is the best one I have read and I recommend it wholeheartedly.

If you want to read only one book on Warren Buffett this is the one to get.

I have the first edition but suggest you buy the second edition with added material.

What you will get from this book:

  • The summarised and categorised wisdom of Warren Buffett’s business and investing teachings
  • Investment and business success explained in a straight forward manner everyone can understand
  • The secrets to investing explained in an easy to understand way

Value Investing Made Easy: Benjamin Graham’s Classic Investment Strategy Explained for Everyone

by Janet Lowe

Paperback: 224 pages

ISBN-10: 0070388644

ISBN-13: 978-0070388642

This book is another excellent introduction to value investing.

It clearly sets out the main tenets of value investing with reference and quotes to Benjamin Graham and Warren Buffett.

An excellent book for beginners with a summary of Benjamin Graham’s value investment and analysis principles as found in his book Security Analysis.

What you will get from this book:

  • Value investing explained in an easy to understand way
  • A step by step guide how to apply value investing when investing
  • How to manage risk as well as do well irrespective of what the market does
  • A practical how-to guide to value investing

More Than You Know: Finding Financial Wisdom in Unconventional Places

by Michael J. Mauboussin

Hardcover: 320 pages

ISBN-10: 0231143729

ISBN-13: 978-0231143721

Michael Mauboussin is the chief strategist at Legg Mason a well regarded US based fund manager.

This book is a compilation of his strategy reports, most of which begin with diverse scientific findings, then show why and how you can apply it to your investment activities.

While not directly an investing book it is a book that will help you in your investment decision making.

What you will get from this book:

  • The explanation of how scientific findings relate to investing
  • Learn a multi-disciplinary approach to investing
  • Why financial television should be watched for entertainment value only
  • How you can simplify your investment approach while still maximising your returns

Your reading analyst