Q. What books would you recommend to help learn about investing?
A. I’ve previously mentioned three books that are great for new investors. Those were The Little Book That Beats the Market by Joel Greenblatt, The Little Book That Builds Wealth
by Pat Dorsey, and One Up On Wall Street
by Peter Lynch. Here are five others that I would view as absolute must-reads for anyone who would like to become a better investor.
1 – The Intelligent Investor by Benjamin Graham. Graham is the father of modern stock analysis and the mentor to Warren Buffett. His writings are so densely packed with insight that it’s almost impossible to take notes. Here’s one of my favorite quotes: “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”
2 – Beating the Street by Peter Lynch. The second book by one of the best mutual fund managers of all time contains dozens of mini case studies explaining why he bought certain stocks. It also contains the classic list of “Peter’s Principles,” including gems like, “Never invest in any idea you can’t illustrate with a crayon.”
3 – The Five Rules for Successful Stock Investing by Pat Dorsey. If you do nothing but stick to these five rules, you’ll be miles ahead of other investors. This is a great but still underappreciated book that covers a huge range of material exceptionally well.
4 – Common Stocks and Uncommon Profits by Phil Fisher. This classic explains how to pick stocks with low risk but high potential growth. As opposed to Graham’s numbers-based methods, Fisher advocates a qualitative approach to investing.
5 – The Essays of Warren Buffett, edited by Lawrence Cunningham. This collection of Buffett’s letters to shareholders over the years is unparalleled in terms of learning how to think independently about business, investing and Wall Street.
Finally, while I haven’t finished it yet, I can also strongly recommend Joe Ponzio’s F Wall Street. Joe, too, is a fan of Warren Buffett, and he does a superb job of explaining Buffett’s key concepts.