The 11 best books for investing in 2018
It is fair to say that the majority of the world's most successful people are also enthusiastic and committed readers. The same is true of the most lucrative investors. It is well known that Warren Buffett used to read 1,000 pages per day when he was starting out, and Charlie Munger credits his commitment to reading as one of his keys to success.
In short, it is indeed vital to read and learn in order to be successful, particularly for newcomers to investing. The following list provides you with the 11 investment books that can help you on your new trading journey.
1. 'The Intelligent Investor: The Definitive Book on Value Investing', Benjamin Graham
If you choose to only read one investment book in your lifetime, then let it be Benjamin Graham's masterpiece. Graham is commonly known as the "Godfather of Value Investing", and with good reason. He was probably the most prominent and influential figure in 20th Century investing, and his book 'The Intelligent Investor' is quite possibly the most important investment book ever written.
2. 'The Essays of Warren Buffett: Lessons for Corporate America', Warren Buffett, Lawrence Cunningham
If we think of 'The Intelligent Investor' as the Bible for value investors, then Warren Buffett's essays have to be the New Testament. Warren Buffett is an investing and business maestro, and has been writing essays on the topic for more than 50 years. Through a combination of his genius and his grounded charm and charisma, he is a superb educator as well as a masterful investor. Many of the essays can be found online, but the book compiles them into one handy volume.
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3. 'Value Investing: From Graham to Buffett and Beyond', Bruce Greenwald, Jude Kahn, Paul Sonkin, Michael van Biema
Bruce Greenwald is the most prominent professor in the Finance department of Colombia University in the USA, and is known as one of the modern day's leading authorities in the world of investing. This book offers a comprehensive overview of the world of value investing, covering the general techniques used in value investing as well as detailed profiles of the most prosperous value investors including Mario Gabelli and Warren Buffett.
4. 'Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Run Investment Strategies', Jeremy Siegel
Jeremy Siegel is known as the "Wizard of Wharton", where he has been teaching for more than 45 years. His book 'Stocks for the Long Run' is reputedly the Bible for buy and hold investors. The book posits a convincing argument, stating that equities are actually the safest long-term investment after you account for inflation. He suggests that the majority of people should be passive, long-term investors in stocks.
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5. 'The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns', John C. Bogle
A big part of investing is common sense, and only a diverse portfolio of stocks held for the long term is going to generate a win. In theory, trying to beat the stock market is a game whereby there must be a loser for every winner, but it becomes a loser's game after the substantial costs are deducted. John C. Bogle founded the Vanguard Group and created the world's first index fund, and this book is one of Warren Buffett's top recommendations. In fact, the pair originally bonded over their common ground of rumpling suits, and their friendship has flourished ever since.
6. 'Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World's Most Famous Investor', Mary Buffet, David Clark
Mary Buffet, the former daughter-in-law of Warren, provides a superb introduction to the maestro's investment approach in her 'Buffettology' book. She offers detailed profiles and analyses 54 so-called "Buffett companies". One highlight is the qualitative analysis of the Buffett investment style, though the mathematical chapters may not be as helpful for some.
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7. 'One Up On Wall Street: How to Use What You Already Know to Make Money in the Market', Peter Lynch
Peter Lynch is one of the most lucrative investors of all time - his Magellan Fund averaged a compound annual return of 29.2% from 1990-1997. In this book, Lynch explains how the average investor can conquer the pros by using the knowledge they have. According to Lynch, there are investment opportunities all around us. From the supermarket to your place of work, you will come across services and products throughout the day. By discerning which are the best ones, you can identify companies to invest in before they are discovered by the professional analysts.
8. 'Competitive Strategy: Techniques for Analyzing Industries and Competitors', Michael Porter
When you attend business school, one of the first things you do is study Michael Porter. His book 'Competitive Strategy' has transformed the way business strategy is practiced and taught all around the world. This book offers an introduction to his 5 Forces that will help investors analyse the industries available to them. It also introduces the 3 forms of a company's strategy, which are low cost, differentiating and focus.
9. 'The Ascent of Money: A Financial History of the World', Niall Ferguson
Niall Ferguson follows the trail of money to tell a very human story of the way our financial system has evolved. It spawned in ancient Mesopotamia and has culminated in the modern world he calls Planet Finance. Ferguson posits that financial history is the essential foundation of all history, arguing that credit and debt have been as important as any technological innovation that progressed civilisation. This is a great overview of money as an entity, and offers a nice introduction to the financial world.
10. 'Thinking, Fast and Slow', Daniel Kahneman
Kahneman is a professor at Princeton University in the field of behavioural and cognitive psychology. He won the Nobel Prize for economics in 2002, and this book was a best-seller on biases in cognition, and on heuristics. The book explains the natural biases we have which influence our everyday judgments, including those in investing. If you want to prosper as an investor, it is vital that you gain an awareness of your own biases and tendencies. This book is as fascinating as it is essential for the modern investor.
11. 'The Millionaire Next Door: The Surprising Secrets of America's Wealthy', Thomas Stanley, William Danko
This is not an investment book per se, but it is a wonderful asset for anyone looking to grow their wealth. Stanley and Daniel give a rundown of 7 common traits that emerge time and again in those who have accumulated vast wealth. By the time you finish the book, you will know that becoming wealthy is the result of hard work, saving diligently, and living within (or below) your means. According to the book, things like inheritance, advanced degrees and even intelligence are actually less important.
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