10 stock market books that every investor must read before investing

Most investment finance books (stock market ) are boring. Most of them have nothing new as such.

Of course, there are the legendary books on investing that make great reading. They are generally written by investment gurus who have a past investing record, or by academics or a combination. Or they are written by journalists or writers following the lives of these ‘gurus’ and narrating them in an interesting manner. Such books are few and far between. Here are ten such books. Try to read at least two out of these.

1) “Learn to Earn” by Peter Lynch:

“Learn To Earn” is aimed at a younger audience and explains many business basics. This book is for beginning investors of all ages. Lynch and co-author John Rothchild are family men who are worried that teenagers aren’t learning enough about the importance of companies in improving lives and creating wealth. Lynch questions why students are taught that Hamlet was a tragic hero and Napoleon was a great general, but they don’t know that Sam Walton founded Wal-Mart.

 Lynch says, you should stick to the basics: get in the habit of saving and investing and putting aside a certain amount every month; develop a strong stomach because the stock market is going to fall and there’s no way to anticipate it; do a little homework so you can understand the reasons to own a particular stock; and buy shares in solid companies and don’t let go of them without a good reason.

2) “The Intelligent Investor” by Benjamin Graham:

The Intelligent Investor by Benjamin Graham, first published in 1949, is a widely acclaimed book on value investing, an investment approach Graham began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd. Intelligent Investor referred to as “the best book about investing ever written”

Graham created and taught many principles of investing safely and successfully that modern investors continue to use today. Ben Graham is also known as “the father of value investing” and the “Dean of Wall Street”. He is also best known as Warren Buffett’s mentor. Graham was one of the first to solely use financial analysis to successfully invest in stocks. I would say Intelligent Investor is a must read book for every investor.

3)”Common Stocks And Uncommon Profits” (1958) by Philip Fisher:

There is a quote by Warren Buffett on the cover of this book.  That quote carries a strong endorsement:  “I am an eager reader of whatever Phil has to say, and I recommend him to you.— Warren Buffett”.

Philip Fisher is among the most influential investors of all time. His investment classic, “Common Stocks and Uncommon Profits” are still relevant today and are widely studied and applied by investment professionals. Philip Fisher searched far and wide for information on a company. A seemingly simplistic tool, what he called “scuttlebutt,” or the “business grapevine,” was his technique of choice.

It was the first investment book ever to make the New York Times bestseller list. Morningstar has called him “one of the great investors of all time”.

4) The Little Book That Still Beats the Market

Author: Joel Greenblatt

In The Little Book, Joel Greenblatt does more than simply set out the basic principles of successful stock market investing. He provides a “magic formula” that is easy to use and makes buying good companies at bargain prices automatic. Though the formula has been extensively tested and is a breakthrough in the academic and professional world, Greenblatt explains it using sixth-grade math, plain language, and humor.

In “The Little Book that Beats the Market–“a “New York Times” bestseller with 300,000 copies in print”, Greenblatt explained how investors can outperform the popular market averages by simply and systematically applying a formula that seeks out good businesses when they are available at bargain prices.

5) Buffett: The Making of an American Capitalist

Author: Roger Lowenstein

Journalist Roger Lowenstein draws on three years of unprecedented access to Buffett’s family, friends and colleagues to provide the first definitive, inside account of the life and career of this American original.  Lowenstein explains Buffett’s’ investment strategy.

The book covers Buffett’s personal and financial life in great detail. It tells you nearly everything you might ever want to know about the Oracle of Omaha. Many consider Buffett to be the greatest investor who ever lived. In fact, this historical book will probably tell the average investor far more than he or she cares to know about the life and times of Warren Buffett. You will gain tremendous insight into Warren Buffett’s thoughts about business and his method of investing. The book shows the moves Buffett made to become successful and the times and conditions which allowed for his amazing success.

6) Security Analysis by Benjamin Graham:

With nearly a million copies sold, “Security Analysis” has been continuously in print for more than sixty years. Published in 1934, following unprecedented losses on Wall Street, the focus of the book, however, remains its timeless guidance and advice that careful analysis of balance sheets is the primary road to investment success, with all other considerations little more than distractions

The book represents the genesis of financial analysis and corporate finance. Security Analysis considered to be requisite reading material for any investor, but it is not an easy read.

Note: Make sure you know all the basics before reading Ben Graham’s books.

7)”Beating the Street” (1994) by Peter Lynch

In this book, Peter Lynch shows you how you can become an expert and how you can build a profitable investment portfolio, based on your own experience and insights and on straightforward do-it-yourself research. All Lynch’s books follow his common sense approach, which insists that individual investors if they take the time to do their homework, can perform just as well or even better than the experts.

Lynch coined some of the best-known mantras of modern individual investing strategies. He describes how the individual investor can improve his or her investment performance to rival that of the experts. There’s no reason the individual investor can’t match wits with the experts, and this book will show you how. His most famous investment principle is simply, “Invest in what you know”.

Peter Lynch was called “legendary” by Jason Zweig in his 2003 update of Benjamin Graham’s book, The Intelligent Investor.

8)Reminiscences of a Stock Operator

Author: Edwin Lefèvre

First published in 1923, “Reminiscences of a Stock Operator” is the most widely read, highly recommended investment book. This is a book about exploits of Jesse Livermore and is written by Edwin as if it were Livermore’s autobiography.  Jesse Livermore was a trader in late 19th and early 20th century, he traded by watching the tape. This book is a rare combination; a book with a fast-moving story, almost novel-type theatrics and some hard-hitting, long-lasting lessons

Generations of readers have found that it has more to teach them about markets and people than years of experience. This is a timeless tale that will enrich your life and your portfolio. It contains a lot of wonderful quotes and takeaways for investors.

9) A Random Walk Down Wall Street

Author: Burton Malkiel

“A Random Walk Down Wall Street” is an influential book on investing strategies. According to Malkiel, “The past history of stock prices cannot be used to predict the future in any meaningful way.” Malkiel argues that “It turns out that the correlation of past price movements with present and future price movements is very close to zero”. He further added, “I have personally never known a successful technician, but I have seen the wrecks of several unsuccessful ones.” In this book Burton Malkiel takes on a number of investing strategies, axioms, truisms, and superstitions. The central premise of Malkiel’s book is that low-cost index funds will serve the individual investor better than any other strategy for choosing stocks.

 As of 2012, there have been eleven editions and over 1.5 million copies sold.

10) The Little Book of Common Sense Investing

Author: Jack Bogle

This book starts with a foreword note in which Warren Buffett says: “A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth. In this book, Jack Bogle tells you why.”

According to Bogle, common sense tells us and history confirms that the simplest and most efficient investment strategy is to buy and hold all of the nation’s publicly held businesses at very low cost.Truly a masterpiece, this book makes it simple for the lay individual investor to incorporate the fundamentals of asset allocation and rebalancing into his portfolio based mostly on a set of low cost, Index funds. To learn how to make index investing work for you, there’s no better mentor than legendary mutual fund industry veteran John C. Bogle.

 



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