As boring as it may seem, reading a ton of books on investing is essential if you ever want to be successful at it. Did you know that highly successful people read an average of 60 books a year? That’s more than one a month.
Sure, make a few wild and crazy trades to get the feel for investing. Start out strong, make some money, lose some money. But all the while, keep a book cracked open.Now, we’ve got some bad news. Unfortunately, investing in stocks is one of those fields where you get a thousand different “financial guru’s” giving you a thousand and one different “winning” ways to invest.
So it’s a little rough finding the good books out there.However!
We’ve read through a lot of investing books. We’ve studied the greatest stock market speculators and investors since the market’s inception. We also hate opinions, so we’ll stick to the facts with these books. Without further ado, here are some of the best books on investing:
How to Make Money in Stocks by William O’Neil. This one is the quintessential (the most perfect embodiment of) growth stock investing. It covers both fundamental analysis, technical analysis, and how to pick the highest quality growth stocks. Alongside the Intelligent Investor, it’s one of the best books on investing written out there.
Though it also has some good information on stock market logic, such as price and volume action, loss cutting rules, objectively analyzing companies, etc. The theory outlined in this book clashes with value investing. However, history has proven true the fact that both strategies work. If you’re looking for the quintessential book on value investing, look no further than…
The Intelligent Investor by Benjamin Graham Which is “by far the best book on investing ever written” as proclaimed by Warren Buffett. And, we all know who Warren Buffett is. If, you don’t Wikipedia!
This book is radically conservative in comparison to O’Neil’s book on growth stock investing. Despite it’s relatively conservative nature, it has some good nuggets of information on value investing, diversifying between stocks and bonds, and rules for the “defensive investor.” And when we say: “some good nuggets” we’re grossly understating it, as this book is the practically the Bible of value investing. Like O’Neil’s How To Make Money in Stocks, this is too one of the best books on investing written.
This one’s fun. It’s an un-sympathetic, terse account of how you can make money by speculating in the stock market, written by the legendary speculator himself, Loeb. With this book, you won’t get conservative, and you won’t get “lazy” investments (e.g. bonds, mutual funds, etc.) Loeb was a hard-nosed speculator, and damn it was he rich.
Now, Jesse Livermore is one of our favorite traders. Maybe it’s his eccentric seclusion, maybe it’s his mysterious suicide, maybe it’s his sound speculation rules. Perhaps a combination of all three, but we like the guy. However! This book was “compiled” by a man named Richard Smitten, who graciously decided to add his own text to the book and promote his “Trade Like Jesse Livermore” software that would make Livermore turn in his grave. The original text by Livermore has extremely useful information.
There is another book based on Jesse Livermore, however, called:
Reminiscences of a Stock Operator by Edwin Lefevre
which is a pseudo biography of Livermore, and a bit less shameless in “trading system” promotion. Great read.Rule #1 by Phil Town (click for full review)
Phil is an interesting guy. He’s laid-back, a motorcycle rider, and a value investor. If you’re looking to get into value investing, but find Benjamin Graham’s book way too dry, this one’s for you. The book is written in a down to earth style, e.g. calling “intrinsic value” the “sticker price.”
My Own Story by Bernard Baruch
This one’s good. Bernard Baruch was (among many things) a successful speculator in stocks. My Own Story is a self-written biography about his life. While speculation only comprises a few chapters of the book, he’s led such an interesting life that the other chapters fly by.
The Richest Man in Babylon by George Clason
We probably don’t even need to say it, but this one’s a classic. Not so much as stocks are concerned, but the concept of saving and investing. It’s an absolute must if you’re even thinking about getting into the field of finance, investment, or really any field that has something to do with money.
A Fool and His Money by John Rothchild
Now this is on the “What NOT To Do” list. It’s a satirical book revolving around an average Joe trying to make money in financial markets. He basically does everything you shouldn’t do, loses money, and writes about it. It’s a pretty funny book, and worthwhile reading if you don’t mind cringing at his market blunders.