November 7 2017
If you're looking for something to read that will improve your ability as an investor, I'd recommend any of these books. All 12 of them are deeply informative and will leave an impact on you.
Keep in mind that if investing were as easy as buying a book and reading it, we'd all be rich.
1. The Intelligent Investor by Benjamin Graham
Described as "by far the best book on investing ever written" by none other than Warren Buffett. "Chapters 8 and 20 have been the bedrock of my investing activities for more than 60 years," he says. "I suggest that all investors read those chapters and reread them every time the market has been especially strong or weak."
2. The Little Book that Beats the Market by Joel Greenblatt
As Buffett says, investing is simple but not easy. This book focuses on the simplicity of investing. Greenblatt, who has average annualized returns of about 40% for over 20 years, explains investing using 6th grade math and plain language. Putting it into practice is another story.
3. Fooled by Randomness by Nassim Taleb
The core of Taleb's other books - The Black Swan and Antifragile - can be found in this early work. One of the best parts, for me, was the notion of alternative histories. "Mother nature," he writes, "does not tell you how many holes there are on the roulette table." This book teaches you how to look at the world probabilistically. After you start doing that, nothing is ever the same again
4. The Most Important Thing by Howard Marks
"This is a rarity," Buffett writes of Howard Marks' book, "a useful book." More than teaching you the keys to successful investment, it will teach you about critical thinking.
5. Poor Charlie's Almanack by Charlie Munger
Charlie Munger is perhaps the smartest man I don't know. This book is a curated collection of his speeches and talks that can't help but leave you smarter. Munger's wit and wisdom come across on every page. This book will improve your thinking and decisions. It will also shine light upon psychological forces that make you a one-legged man in an ass kicking contest. Read and re-read.
6. Common Stocks and Uncommon Profits by Philip Fisher
Buffett used to say that he was 85% Benjamin Graham and 15% Phil Fisher. That was a long time ago. The Buffett of today resembles more Fisher than Graham. Maybe there is something to buying and holding great companies.
7. The Dao of Capital by Mark Spitznagel
Spitznagel presents the methodology of Austrian Investing, where one looks for positional advantage. Nassim Taleb, commenting on the book, wrote: "At last, a real book by a real risk-taking practitioner. You cannot afford not to read this!"
8. Buffett: The Making of an American Capitalist by Roger Lowenstein
This book, perhaps more than any other, has changed the lives of many of my friends and investors because this is how many of them first discovered Warren Buffett and value investing.
9. The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike
An outstanding book detailing eight extraordinary CEO's and the unconventional methods they used at capital allocation.
10. The Misbehavior of Markets: A Fractal View of Financial Turbulence by Benoit Mandelbrot
A critique against modern finance theory, which usually get built on the underlying assumption that distributions are normal. Nassim Taleb calls this "the most realistic finance book ever published."
11. Why Stocks Go Up and Down by William Pike
This is a basics book on the fundamentals of equity and bond investing - financial statements, cash flows, etc. A good place to start on the nuts and bolts. If you're looking to learn accounting also check out "The Accounting Game: Basic Accounting Fresh rom the Lemonade Stand", I'm serious. This is the book I recommended to classmates in business school with no accounting background to get them up to speed quickly.
12. Bull: A History of the Boom and Bust, 1982-2004 by Maggie Mahar
The first and perhaps best book written on the market's historic run, which started in 1982 and ended in the early 2000's. Mahar reminds readers that euphoria and blindness are a regular part of bull markets - lessons we should have learned from studying history. And if you haven't read these books...