Best Investment Books Investors Must Read

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Best Investment BooksA new round of investment books are churned out after every major market event offering a new way to invest. Market crashes, asset bubbles, new or long forgotten investment opportunities, the reasons are endless. To often the books pry on your fear, greed, and wallet. It always ends up being time or asset specific, short-term focused advice, with just a hint of get rich quick to it.

The best investment books are timeless.

Thankfully, a few great investors were also teachers willing to share their knowledge, experience, and practical advice. Something every investor needs from time to time. And they did it in a way so that investors at any level could learn.

Besides, it’s still cheaper to pick up a book then to learn from experience alone. And self-education is a great way to learn about investing.

The Best Investing Books

All the books below I’ve read and reread over the years and will act as an introduction and reference for improving your investment knowledge.

The Intelligent Investor

The Intelligent InvestorIt’s been repeatedly called “the best book ever written on investing”. Its age is a testament to its timeless advice. In it Graham lays out investing principles that have worked for decades with topics on portfolio management, defensive investing, and fundamental analysis. It’s a book any would be serious investor should dig through once and a must for value investors.

There are several editions available, each with differing opinions on which is best. You can easily get a hold of past editions thanks to its popularity.

One Up On Wall Street

One Up On Wall StreetThis is one of those books you can reread a dozen times and walk away with a new idea or insight each time. Peter Lynch was the exception to the mutual fund manager norm. He took the Fidelity Magellan Fund on a thirteen year, 29% annual return ride and trounced the S&P 500 along the way.

Lynch has a simple and easy philosophy that small investors have an advantage. This is a great book for beginners to start with first. Once you’re done, grab his second book Beating The Street.

Common Stocks And Uncommon Profits

Common Stocks and Uncommon ProfitsFisher focuses on companies that offer sustainable growth with a competitive advantage, which is a staple idea today. Only he was perfecting it over a half century ago and finally publishing his philosophy in 1958.

It’s been used as a teaching tool by the Stanford MBA graduate investment course for years. But you don’t need to be a graduate student to understand Fisher’s “Fifteen Points” philosophy. Even Buffett has added many of Fisher’s philosophies to his own investment style.

You Can Be A Stock Market Genius

You Can Be a Stock Market GeniusThe title doesn’t come close to explaining the topics in this book. In it, Greenblatt covers special situations. The spinoffs, mergers, restructuring, recapitalization, warrants, and more that most investors shy away from or overlook.

Special situations are an entire area of investing that is rarely discussed, but offer a lot of investment potential for those willing to put the time and research into it.

The Essays Of Warren Buffett: Lessons For Corporate America

Essays of Warren BuffettIt’s a neatly organized collection of Buffett’s letters to Berkshire Hathaway shareholders. It contains his philosophy on corporations, management, shareholder’s rights, accounting, investing, and too many other topics I’ve forgotten. Which warrants a reread.

Because of how the book is laid out you can easily read it piecemeal. It’s like a cataloged version of picking Buffett’s brain anytime you want. Just cover a section or chapter, set it down, and return to it later.

Security Analysis

Security AnalysisIt’s known as the value investing bible. It’s a comprehensive coverage of intrinsic value, fundamental analysis, and the advantage of finding price and value discrepancies. The ideas and value investing philosophy laid out by Graham and Dodd have worked in every market climate. Their complex ideas aren’t the easiest to get through at first but you’ll have a better understanding of value investing when you’re done.

There are several editions floating around. I’d recommend the sixth edition. It’s a reprint of the 1940 second edition with a foreword by Buffett and essays from leading value investors.

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Comments

  1. Paula V. says

    Thanks for this post! I’m currently reading “The Winning Investor’s Guide to Making Money in Any Market”, by Andrew Horowitz. “The Intelligent Investor” is next on my list. BTW, have you ever covered online stock market simulators? If so, which ones do you recommend? I’m currently giving wallstreetsurvivor.com a spin.

    • Jon says

      I’ve never tried any market simulators. When I first started, I jumped in head first with a small amount of money and bought a couple stocks. I didn’t try day trading since I didn’t understand it well enough. If I started all over today, I’d probably do the same but with a couple ETFs instead.

  2. Mike B. says

    I’d suggesgt The Davis Dynasty by John Rothchild. A riveting look back on 50 years of ultra conservative buy, hold & reinvest dividends by 3 generations of one family that no one ever heard of, but may be 2nd only to Warren Buffet in terms of compelling compounding gains. Davis benefited from being in the Sweet Spot for sure, starting after WW II and riding the greatest bull market in history, while enjoying access only a handful of investors could possibly achieve today, but his basic philosophy applies to anyone even with a modest nest egg. He endured two major wars, two horrific bear markets, wild inflation in the ’70s & the infamous ’87 crash and yet still built a stock portfolio worth $900 million on the back of the most mundane of all stocks- insurance companies. (Though he’d probably NEVER select the AIG we knew in the past decade, but there was a time when it was a great company, and the cornerstone of his portfolio.)

  3. says

    Thanks for these books. Looks like there is a lot of reading that may be worthwhile here. I have read some of Peter Lynch’s stuff; very practical, insightful stuff.

  4. says

    Have you ever read “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay….It is one of those books that really gives a great perspective on the market and human nature considering it was written in 1850s. Thanks for the list!

    • Jon says

      I grabbed a copy a few months ago when Amazon did a free Kindle edition giveaway. It’s on my list to read.

  5. says

    One book I found VERY valuable when I got serious about trading is Van Tharp’s “Trade Your Way to Financial Freedom.” Over the years I’ve recommended it to lots of beginners with very positive feedback.

    This one is odd, because it doesn’t directly address trading at all, but it really, really helped me: “Phil Gordon’s Little Green Book” by Phil Gordon. It’s a book about Texas Hold’Em Poker, but it really helped me to learn to think rationally and statistically about my trading. It might have just been “right book at the right time for me” and won’t help anyone else, but I really do believe the lessons in his book will help ANYONE learn to trade well.

    • Jon says

      I’ve read something similar about Doyle Brunson’s book. There are a lot of similarities between poker and trading/investing like discipline, controlling your emotions, and money management.

  6. says

    Hedge Fund Wizards is an extraordinary book. Even if you have no interest in hedge funds or trading, it offers amazing insights into the markets. I agree the Graham books are great. Margin of Safety is another great book that is unfortunately out of print right now.

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