A question that people regularly ask me is what kind of books, blogs and other resources I would recommend. To tackle this question once and for all I thought the best idea was to write one or more blog posts about it, starting with books that I would recommend reading. What books to recommend is an easy question in my opinion. There are really a ton of good books out there, and I don’t think it matters too much which ones you read. Start with some of the well known classics and it’s really hard to go wrong.
After reading enough books on, for example, value investing you will see the content becoming more and more repetitious. They first book you read you might think, “Wow, that’s genius buying stocks at a discount to NCAV” while in the 10th book you start thinking “Can’t this author tell me anything new?”. It’s not that the 10th book is a worse one, but at some point you know the drill. So I have to admit that these days I rarely read investing books anymore, so quite possibly I’m not the most qualified person to give reading tips. But since you have been asking I’ll try anyway! All the books in the lists below are books I have read personally. If you think I’m missing something great, let me know in the comments.
Investment basics, philosophy
If you are totally new to investing these are the kinds of books that I think should be helpful to understand what (intelligent) investing is, what kind of attitude you should have with regards to your investments, and what kinds of stocks could be profitable investments.
- The Intelligent Investor I think this timeless classic is a must have on the reading list, and a good one as a first book to read.
- Margin of Safety Only buy it if you run a successful hedge fund and want to showoff with the books on your bookshelf. For the rest of us, you should be able to find the pdf-version somewhere online.
- The Manual of Ideas A way more modern text that incorporates many of the ideas of the previous books and some new ones.
- Common Stocks and Uncommon Profits and Other Writings There is more under the sun than just buying dirt cheap stocks.
- Essays of Warren Buffet At some point in your investing life you will probably get bored by hearing for the millionth time the same Buffett quotes, but if you are new to investing these are a must read. Instead of buying the book you can also go for the value option, and read all of Buffets shareholder letters on berkshirehathaway.com.
Understanding psychology is extremely important if you want to make good decisions, yet at the same time it’s very hard to apply. There is a big difference between reading a book about psychology, and being able to avoid the many psychological pitfalls you read about. But reading these books is a good first step I think.
- Thinking Fast and Slow It’s not really an investment book, but a great book to understand the various heuristics and biases our brain has that can influence our decision making. An absolute must read in my opinion.
- Beyond Greed and Fear It’s the same topic, but this time a bit more tailored towards investing.
The border between books in this category and the investment basics category is arguably a bit vague, but these books are on average a bit more practical, maybe aiming at more specific subjects and heavy on examples and case studies.
- You Can Be a Stock Market Genius The title of the book is very cheesy, but this is really one of the best books ever written on special situations investing. Highly recommended!
- Security Analysis: Sixth Edition, Foreword by Warren Buffett Another classic that goes a bit more in-depth into the accounting and valuation. Don’t read this one as one of your first books though, probably a bit too tough and dry!
- Quality of Earnings Another text I highly recommend. Being able to spot weird things in financial statements is an invaluable skill.
- Financial Shenanigans A good addition to the book linked above.
Most investing books I read nowadays fall in this category. Individually you’re probably not going to learn a whole lot from each book, but most of these books contain interesting nuggets of wisdom, and perhaps more importantly, are just very good reads.
- Fooling Some of the People All of the Time Entertaining story of Einhorn’s fight against Allied Capital.
- Reminiscences of a Stock Operator Interesting story about trading and speculation in the early days of the stock market
- The Big Short One of the best stories about the 2008 financial crisis. The movie is surprisingly great as well. So if you are tired of reading, you can just watch it.
- When Genius Failed Good story about the spectacular failure of the Long Term Capital Management hedge fund.
- Red Notice Hedge fund manager turns into social justice warrior after the Russian state murders his lawyer. Book reads reads like thriller, something you don’t expect in the finance category. @Billbrowder is worth a follow on Twitter too.
All of the links in this post contain my Amazon affiliate code. If you buy something I will get a small percentage while you get the same price as always. Hopefully this post can make me rich!