Top 5 investment books to read

A quick disclaimer, this list is only based around the philosophy of value investing, so no information about day trading or forex trading here.

These are my personal recommendations.

The biggest lesson that I have learnt from part-taking in the art of investing (mostly value-based), is the thirst for knowledge that you need to have. There is so much to learn. This does not just mean technical knowledge and jargon, like understanding what the book-to-sales ratio is or profit-to-earnings, or bull and bear markets. Though understanding these is especially important.

To be a truly successful investor you really need to read around. Every piece of knowledge can give you an ‘inside track’ (so to speak) on the market. The knowledge that you can acquire from economic to sociology/ psychology to philosophy gives you a greater understanding of the ‘bigger picture’, and the possible outcomes that can occur given a particular situation.

Whether you are a seasoned investor or a novice investor, the following list of books will hopefully teach you some important lessons. Apart from the first title on the list, all the other books are not in any particular rank. But the first book on the list is the one that I would personally recommend reading first.

Without further ado… here comes the list.

The little book that still beats the market,

by Joel Greenblatt.

An absolute must-read for a beginner investor. Joel originally wrote the book for his kids and as a result, the book is written in a relatively simplistic style. But it does not remove any of the complexities of investing, it just provides a clear and simple view of the philosophy.

He writes the whole book around the concept of a first-time investor who might not have the time or the expertise when it comes to investing. In the book he tries giving you a bit of a helping hand by providing you with a ‘magic’ formula, that will give you a greater chance of picking a winning company or companies.

This is a great book for those of you who just don’t have or can’t dedicate the time to invest, but you will have to be prepared to take a bit of a risk when giving his ‘magic’ formula a go. Just as a side note I personally use the formula to help me screen my stocks.

The education of a value investor,

by Guy Spier.

This is a great book. It does not really address the ‘how to’ be an investor but more importantly, it addresses the philosophy of being one. The whole premise of the book is him documenting his journey of becoming a value investor.

I don’t what to spoil the story for you, but the section where he’s in a bidding war to have dinner with Warren Buffett was an entertaining read. This book also introduced me to my investing idle, Mr. Mohnish Pabrai. So, for just that, it’s worth a read.

The Dhandho Investor,

by Mohnish Pabrai.

This is the book that really inspired me to take the plunge into the crazy, schizophrenic world of investing. Upon reading his book, it really felt like a journey of discovery. He teaches you his basic rules of investing and the philosophy behind them.

Reading the book felt more like reading a text written by a Guru than an investor. You can definitely feel that he wants to teach more than just investing, but also what to do next.

What works on WallStreet,

by James P. O’Shaughnessy.

If you are looking for a book that basically gives you the ‘how-to’, then this is the book for you. The style of the book is relatively simple but also can get technical. The whole point of this book is to do what it says, that is what strategies work on Wallstreet.

To put it a bit more plainly, the book explains what strategies work and what strategies don’t. He breaks down the different styles of investing based around different goals that you may have. For example, if you are interested in investing in growth companies rather than value, he will explain the best strategy to be successful in that goal.

The Intelligent Investor,

by Benjamin Graham.

This is quite literally the investor’s ‘Bible’. If you want to really understand the nuances of value investing or investing in general then this is a must-read. All the great investors have read this book, which should tell you something. Though it’s a bit of a dry read.

The most prevalent parts are the sections that deal with the ‘margin of safety’ and the concept of ‘Mr. Market’. This book is filled with a lot of wisdom for any investor to learn from, whether you are a novice or an old hand.

Warren Buffett’s essays

You might have noticed that Warren Buffett does not pop up in this list, and there is a reason for that. Warren himself hasn’t really written any books. And all the books about him and his strategies are second-hand sources.

But he has written a lot of essays on his business deals and investments, they all can be found on his website, berkshirehathaway.com.

All of his essays are written from the perspective of explaining his thought process for his investment decision and what went well and what did not. It is very educational, and I would highly recommend reading them.

And that concludes our reading list. As aforementioned apart from the first book ‘The little book that still beats the market, by Joel Greenblatt’, there is no particular order of reading these books.

I hope that you found this list useful and that it will help you start your investing journey or teach you something new. Thank you for taking the time to read my article and I wish you all the success in the world.