Before I start on the top 10 Most Valuable Financial Reads, here are the honorable mentions, divided by category:
Fundamental Investing:
- Philip Fisher, Common Stocks and Uncommon Profits: why sell a quality business? This book is the most cogent defense of buying great companies and hanging on as long as they stay that way.
- Joel Greenblatt, You Can Be a Stock Market Genius: A silly title, but the content is sound. Don't believe that there could be a book explaining bankruptcy investing to a middle-schooler? Well, here you go.
- Robert Hagstrom, The Warren Buffett Way: The best place to start learning about Buffett. New readers should be aware, though, that the Buffett bag of tricks is quite a bit deeper than this book lets on.
- John Neff, Neff on Investing: A very humble and matter-of-fact introduction to what Neff calls his "low P/E shooter" investing style. It blends biography and investing strategy seamlessly, showing the stomach it took to stick to his guns, particularly in the rough-and-tumble 1970s.
Technical/Trading:
- Nicholas Darvas, How I Made $2,000,000 in the Stock Market: The title is ridiculous, Darvas's risk management leaves much to be desired, and some have questioned if any of this ever really happened. But this is still probably the best introduction to how stock prices work. Plus, you can read it on a Saturday afternoon.
- Edwards and Magee, Technical Analysis of Stock Trends: The Bible of technical analysis. The sections explaining the logic behind support and resistance work are unmatched, anticipating by more than half a century much of what modern behavioral finance is only starting to discover about how people think about and act toward their stocks.
- William O'Neil, How To Make Money in Stocks: Great investment book or cross-promotion machine for Investor's Business Daily? Well, a little of both. Clearly O'Neil hit on something with his CANSLIM strategy. The problem for the serious investor is that it's difficult to integrate the CANSLIM method with other approaches (let me know if you've done this successfully). The problem for the serious reader is the incessant IBD trolling.
- John Train, The Money Masters: A group biography of highly successful investors, this is one of the best ways to gain quick exposure to a variety of fundamentally based investing styles. The chapter on Robert Wilson's harrowing Resorts International short is classic.
Macro/Other:
- Jim Rogers, Investment Biker: Primarily a travelogue, the parts of this book on macro investing are among the most useful material any investor can read, and aren't really duplicated anywhere else. Really understanding Rogers's approach to global investing is one of the most valuable investments you can make with your time. Now if he would just write a book that focused purely on his investment style. Are you listening, Jim?
- Victor Sperandeo, Trader Vic: Methods of a Wall Street Master: This eclectic read provides a great introduction to Austrian economics suitable for investors, very helpful definitions of a trend and a trend break, and deals with the emotional side of trading to boot.
- Nassim Taleb, Fooled By Randomness: An excellent discussion on how randomness, by definition, cannot be controlled for, and how we frequently ascribe to skill much that is in fact produced by variance.
Next installment: Most Valuable Financial Read #10.
