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The Intelligent Investor: The Definitive Book On Value Investing, Revised Edition: Hands down the first book you should ever read if you’re planning to invest in stocks! |
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Security Analysis: The Classic 1940 Edition: The most detailed book that I’ve ever read that explains how to invest in stocks. It goes over the financials, how to read SEC filings, how to analyze a company. Everything is in detail, therefore this is not a light reading, but what you get out of it is worth it’s weight (it’s a heavy book). |
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The Essays of Warren Buffett : Lessons for Corporate America: There’s nothing like reading directly from the richest person ever who made his fortune by investing in stocks! This is a collection of many of his best pieces, grouped together into topics. |
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The Warren Buffett Way, Second Edition: A very good introduction on what to look for in stocks. Almost like a follow-up to The Intelligent Investor mentioned above as the #1 stock investing book. |
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How to Lie With Statistics: If you’re going to invest in stocks, you need to be able to read graphs, there’s no doubt about it. The key however is that you need to understand how to properly read graphs because it’s very easy to manipulate their meaning by simple modifications (with the exact same data)! |
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A Random Walk Down Wall Street: Anyone who’s educated themselves in stocks knows there are many investing philosphies and styles. This book goes through many of the more common ones and tries to determine which is better. In case you’re curious, the author believes that throwing a dart to pick your stocks gives you just as good of odds over the long term as any investment strategy. I don’t believe this, but he makes a very compelling case. |
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Take On the Street: What Wall Street and Corporate America Don’t Want You to Know: I recommend this book not for its overall content, but for the great take aways on how the mutual fund market works. I was never fond of the mutual fund market, and now I know for sure that I’ll never invest in mutual funds. |
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Reminiscences of a Stock Operator: This is the disguised story of the stock speculator Jesse Livermore from long ago who used shady practices to make and lose a lot of money. What’s good about this book is that it’s got an interesting perspective on when to buy, sell, or hold a position in any investment vehicle. |
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Buffett : The Making of an American Capitalist: The best way to be successful at anything it to learn from the best, and Warren Buffett has consistently shown himself to be the most profitable stock investor in the world. Therefore no list would be complete without his biography, and this is the best one I’ve read about him. |
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When Genius Failed : The Rise and Fall of Long-Term Capital Management: This is the real story of a group of individuals that over leveraged themselves on their investments and almost collapsed the market. I recommend this book not because of it’s entirety, but because there are some great nuggets of wisdom spread throughout. |
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· July 8th, 2007 · 4:45 am · Permalink
I think this is too tilted towards Buffett. For a more comprehensive list with the investing classics across all areas of investment, please refer to https://nofrillsinvesting.blogspot.com/
· July 8th, 2007 · 11:14 am · Permalink
It is tilted towards Buffett, but then again very few have achieved the type of success as he has!
Not only that, I’ve personally been able to apply these very fundamental value principles, that were originally described a long time ago, with great success. Even in today’s market!
· January 22nd, 2008 · 12:04 am · Permalink
[…] has a top ten all time list. Among them is a book that is in my collection as well: The Intelligent Investor: The Definitive […]
· July 18th, 2008 · 9:09 am · Permalink
Many online top 10 lists rate the intelligent investor very well. I started reading it, but I don’t know much about investing. I have learnt the basics, but I’m finding it quite a struggle to get through the book. It’s not light reading.
Is it really the first book you should read on stocks? Do you not need to be a bit educated in stocks before you read the intelligent investor?
thanks
· July 19th, 2008 · 1:24 pm · Permalink
Hi Elie,
You are right, many rate is as a top 10 book, and that’s because it is amazing! It’s been in print for 30-40 years now and it’s still a top book. How many stock investing books are that timeless???
In regards to struggling through it, this is the foundation of stock investing. Like almost any other topic, without a proper foundation the others will just skim over it and get you to assumptions that aren’t necessarily correct. Without a proper foundation you won’t be able to be critical of other techniques.
What Ben talks about is how to properly value a business/stock. He doesn’t give you a “technique” but rather an understand of what the numbers mean. Until you fully appreciate that, any “technique” you use will need to be followed with blind trust, which is not something I’d want to do with my money.
To give you an analogy, investing without understanding the fundamentals is like driving without knowing what a steering wheel does, what the gas pedal does, etc. Following a technique is like having someone tell you every second what to do. Step on the gas…NOW… Slower… Faster… STOP STOP STOP.. GO GO GO…Slower… Well I think you get the idea. If you know what what’s what, even without the details, at least you can drive yourself and tell what’s going on. Makes investing a LOT LESS scary.
I understand it might be hard the first pass, or even the second pass, but each time it will get easier. I’ve personally read it more times than I can remember, and each time I learn something!
It’s always why everyone wants the quick and simple solution. And it’s also why so many people lose money. If you don’t understand the basics, it’s only a matter of time before you fail. In our analogy, you’ll eventually crash because you’ll miss an instruction or respond incorrectly.
Btw, if you really want to try a much more difficult book, try Securities Analysis. That’s a multi-read and then some. If anyone tells you otherwise, I woulnd’t believe them. It’s a hard read, but well worth the time! Intelligent Investor is Ben’s summary of Securities Analysis.
· July 20th, 2008 · 2:14 pm · Permalink
Thanks. Are there any books that will make reading Ben’s book easier? For example, if I were to read Investing for Dummies would that make reading Ben’s book easier? Or should I just work through his book slowly, trying to understand what I can?
· July 22nd, 2008 · 10:39 am · Permalink
Hi Elie,
I would honestly go through Ben’s book slowly. It’s much like your poker examples. You need the fundamentals to move up the ladder.
Some of the other books will gloss over key concepts, if at all. Others will focus on a style of investing. Ben’s book isn’t about a way to invest, it’s about how to analyze a company for it’s true value. Nothing more.
It’s not about beating a trend, finding the hottest sector, when to buy in low and when to sell high. It’s only about how to correctly evaluate the true value of a company (intrinsic value).
Most books seem to ignore this fundamental concept. There are theories that completely ignore this!!! It still amazes me how they can do this. My analogy is a mom & pop cafe. Would you buy it not knowing the fundamental value of the company (how much it’s really worth). No. But yet people do that with stocks all the time.
I know it might be a little difficult at first, but I’m sure you’ll get the hang of it. If you were able to master the intricacies of poker, you’ll get this too 🙂
· November 20th, 2008 · 1:44 pm · Permalink
I guess that you haven’t read “The Brainwashing of the American Investor”
· November 23rd, 2008 · 5:02 pm · Permalink
Hi Steve,
No I haven’t yet had the opportunity to read this book…
· July 23rd, 2009 · 2:59 am · Permalink
Interesting book review. I’m with Fisher Investments, and I think another must-read investment book is by Ken Fisher, called The Only Three Questions that Count. In it, Ken outlines the important questions investors should be asking themselves prior to investing in the market. It was well received by both independent investors and people in the financial services trade.
· September 3rd, 2012 · 10:33 am · Permalink
My favorite stock trading books are:
• The small stock trader by Mika
• “Lessons from the greatest stock traders of all time” and “How legendary traders made millions” both by John Boik
• “Reminiscences of a stock operator” and “How to trade in stocks” both by Jesse Livermore
• How I made $2,000,000 in the stock market by Nicolas Darvas
• How to make money in stocks by Willien O’Neil