Investing is, for sure, a hell of a task and may cause you to lose almost everything, but it’s also true that you will gain big if your bet is right. Perhaps this is the reason why people all over the world “play their luck” with the stock and securities market.
Why not reduce the chances of getting into loss by studying, analyzing the stock, and calculating the risk associated with it. Although now we have access to the internet, which is, by the way, a great source of research, books provide us with something that even a world wide web can’t. Vision and guidance are two of those valuable things.
Without knowing what you are looking for, how can you maximize your profit? To help you with your investment plans and increase your knowledge about stock market investments, we have gathered some of the most influential and helpful investment books that you must read.
18. Winning the Loser’s Game
Author: Charles D. Ellis, John J. Brennan
Have you already made your bets and lost almost all of your money? Well, don’t worry, we have something great for you here. Winning the Loser’s Game by Charles D. Ellis tells us how individual investors can perform better than ever by playing along with markets, rather than against them. The main idea is to find and stay invested in cheap index funds for better returns.
17. The Elements of Investing
Authors: Burton G. Malkiel, Charles D. Ellis
The book carries some serious investment advice from two of the well-known people in the industry: Burton Malkiel and Charles Ellis. Jointly, they have tried to illustrate how, as an investor, you should tackle two of your biggest enemies: fear and greed.
Disciplined investing with self-conviction – that’s all you need to be a killer investor.
16. Options, Futures, and Other Derivatives
Author: John C. Hull
While many consider this book not less than “a bible” of the investment industry, some believe that it’s quite overrated but important enough to be on the shelf of every young investor. With this book, John C Hull did an excellent job of connecting the theory and practical aspects by giving a unique perspective of the current industry.
The book efficiently covers important topics such as the overnight indexed swap (OIS), securitization, the Black-Scholes-Merton formulas, the credit crisis, and, more importantly, how the commodity derivatives are valued. It will help you to understand the derivatives market and keep up with its current pace.
15. When Genius Failed
Author: Roger Lowenstein
As an investor, you should always be ready for failure, and the best way to do so is by studying the failures of the others. Long Term Capital Management was a hotshot hedge fund in the mid-1990s, started by John W. Meriwether and other big names in the financial industry.
What initially hailed as one of the best hedge funds in history, lost nearly $5 billion in the period of just four months and later contributed to the 1997 financial crisis. This book captures all the greed, arrogance, and heated moments leading to the firm’s collapse in less than 300 pages.
14. The Alchemy of Finance
Authors: George Soros, Paul A. Volcker
George Soros is undoubtedly one of the world’s most powerful investors, who is also known for his extensive political involvement. For those who don’t know, Soros made a hefty amount of profit during the UK’s black Wednesday Crisis, after short selling the British pound, which eventually broke the Bank of England“.
This book is divided into two parts, one where he introduces the concept of reflexivity, where he explains how a stock is influenced by the economy and vice-versa. The second part is all about the “experiment,” in which he describes his monthly trading activities.
13. Trade Your Way to the Financial Freedom
Authors: Van Tharp
Frankly, the book is quite hard to understand, especially if you are a new investor, but it does contain some of the most important factors that you should know about today’s market. In this book, the writer introduces his multiple-step trading model and focuses on the psychological part of stock trading, plus how to create your own investment system.
12. The Long & The Short of It
Author: John Kay
The book reveals various difficulties in the modern finance sector, covering both the complex innovations in the current financial system and the basics of investment. It will teach you about how recent and upcoming bubble(s) and crunch (economic) negatively affected the stability of the international economy.
11. Millionaire Teacher
Author: Andrew Hallam
With the help of low-cost index funds, along with value investing philosophy, this book shows how a school teacher creates a million-dollar portfolio. The writer Andrew Hallem explains why the stock market crashes are actually healthy for your portfolio and how by spending just a minimum amount of your time, you can still beat most of the professionals out there.
10. The Interpretation of Financial Statements
Authors: Benjamin Graham, Spencer Meredith, Spencer B. Meredith
Benjamin Graham is, without a doubt, one of the most influential investors (at least of the modern era). His ideas and philosophy have affected many great investment minds in the past, and it will continue to do so. The book is just one of his masterpieces, a timeless guide for understanding and interpreting financial statements with much greater depth.
Sure, a lot has changed since the book was first written (in the 1930s), but that doesn’t mean it won’t provide valuable insights to investors, especially to younger ones.
9. You Can Be a Stock Market Genius
Author: Joel Greenblatt
According to the “The Big Short” by Michael Lewis, many of those who foresaw the 2008 subprime mortgage crisis, successfully used this book to make a fortune. The book is filled with important tools, case studies, and other information to help you become a professional investor.
The writer explores the few uncharted areas and investment opportunities such as M&A, Spin-offs, corporate restructuring, recapitalization, etc.
8. The Four Pillars of Investing
Author: William J. Bernstein
William Bernstein is an American neurologist who is also known for his work in the Modern Portfolio Theory. His book ‘The Four Pillars of Investing’ is exceptionally useful to someone who wants to start managing their own investment portfolios.
Instead of giving investment advice for making a quick buck, this book offers its readers a unique view of market theory – how the market actually works, the history of markets, and the psychological aspects of the market. In short, every successful investor should know the theory, history, psychology, and business of investing – the four pillars.
7. The Little Book of Common Sense Investing
Author: John Bogle
John Bogle is one of the most respected names in the banking industry, who founded the investment management giant Vanguard Group. Through this book, the investment veteran tries to tell us that investing is actually a common sense; it’s all about holding a diversified stock for long terms.
The book is enriched with in-depth analysis and precious advice, which will guide you on how to include the same investment strategy that Mr. Bogle has relied upon for decades.
6. Margin of Safety
Author: Seth A. Klarman
Value investing has many well-known admirers and billionaire hedge fund managers, Seth Klarman is surely one of them. His investment philosophy is close to that of Benjamin Graham and is famous for buying undervalued stocks pursuing a margin of safety.
What is the margin of safety? You should find it yourself. Overall, this book explains why value investing succeeds in situations where other strategies do not.
5. Common Stocks and Uncommon Profits and Other Writings
Author: Philip A. Fisher
Philip Fisher’s investment philosophies are not only admired and studied but are also widely applied by bankers and financiers all over the world. Though originally written more than half a century ago, his book Common Stock and Uncommon Profits is highly valued in the modern investment world.
If your goal is to invest in potentially great companies with excellent management, then this book is for you. In other words, this book will help you identify the future blue-chip stocks that are currently small. However, many people think that this book is pretty outdated and is not suitable for the current market.
4. A Random Walk Down Wall Street
Author: Burton Malkiel
Burton Malkiel is a noted economist, who spent almost three decades as the Director of the Vanguard Group, world’s second-biggest investment management firm. He is a strong advocate of the efficient-market hypothesis, in which all the publicly available information is what drives the prices of publicly traded assets.
His book, A Random Walk Down Wall Street, is considered a classic in the financial world. It includes some easy definitions of complex investment terms and concepts such as diversification, bubbles, and their use in various investment strategies. As of 2015, over 1.5 million copies of the book were sold worldwide.
3. One Up On Wall Street
Author: Peter Lynch
For a young investor, what would be more important than learning the art of investment from the legendary money manager himself? Peter Lynch is one of the most prolific investors in the history of banking.
From 1977 to 1990, he headed the Magellan Fund, averaging about 29% of annual return and beating the S&P 500 for years. Under his leadership, the total assets under management increased from $18 million to a staggering $14 billion.
Basically, One Up On Wall Street is a theoretical approach laying out Lynch’s own investment strategies, including the famous two-minute drill, stock classifications, and streamlining your portfolio. His other book, Beating the Street, is more focused on the practical side of this theory.
2. The Essays of Warren Buffett: Lessons For Corporate America
Author: Warren Buffett
In the world of investing, there is no name bigger than Warren Buffett. He is known for his simplicity and honesty. Every year, the Oracle of Omaha shares his views and industry insights with his company shareholders. From an investor’s point of view, you can imagine the importance of these insights.
Thanks to this book, now everyone, anywhere in the world, can dive into the deep pool of corporate governance, common stock alternatives, and investing. It also covers a wide area of Berkshire Hataway’s business (obviously), such as accounting policy, corporate valuation, M&A, and tax matters. So if you are dreaming of becoming the next Warren Buffett, if nothing else, it will teach you what it will take to be there.
1. The Intelligent Investor
Author: Benjamin Graham
Benjamin Graham is the father of value investing. His principles are followed by almost every successful investor, including Warren Buffett. Initially published in 1949, the book is still considered a must-read for any person who wants to enter the world of investing.
One of the major reasons why this book is still prevalent in the modern market is commentary added by the noted financial journalist Jason Zweig, whose market insights make Graham’s examples more relative to the modern markets and give young readers ways to effectively incorporate Graham’s principles.