We've been getting some requests from readers for some good books to read when it comes to investing or trading. So, we decided to post up a central list and just add to it as we go along. We're going to start with the recommended reading for investors, as well as some books catered to traders. We'll be releasing the recommended reading in increments of 5 books every month/few weeks.
The following are considered essentials by Market Folly for all investors or traders.
- The Intelligent Investor by Benjamin Graham. If you had to own one book about fundamental investing, this would most likely be it. Benjamin Graham was a legendary investor who helped pioneer the ways of value investing and taught Warren Buffett a lot of what he knows today. The Intelligent Investor is definitely number one on the list. If you haven't read it, pick it up immediately.
- Reminiscences of a Stock Operator by Edwin Lefevre. This book should be on the top of any trader's list. This story depicts the trials and tribulations of Jesse Livermore and takes you inside the mind of a trader to provide you with tons of insight, wisdom, and anecdotes. This book spawned legendary advice such as "the trend is your friend" and "let your winners run and cut your losses quickly." Reminiscences of a Stock Operator is easily the top choice for professional traders when asked what book they would bring with them to a deserted island.
- Security Analysis by Benjamin Graham. This is the second of Graham's must-read books. The book features the value investing philosophies of Graham and Dodd and a foreword by Warren Buffett. If you're lacking in understanding how to perform fundamental analysis, then this is the book for you. After you've finished reading, you'll be able to tackle balance sheets like none other. Security Analysis is a must-read for anyone interested in the fundamental analysis related to investing.
- When Markets Collide by Mohamed El-Erian. This book is on the list because it covers the current financial landscape. It discusses the current fundamental changes going on in the global economy and financial markets/systems. This book recently won the Business Book of the Year for 2008. I'm currently in the middle of reading it and would definitely recommend When Markets Collide to others.
- Market Wizards by Jack D. Schwager. This book details interviews with top traders. It covers topics such as discipline, risk management, consistency, and capital preservation among others. And, its especially a good read for the people he's interviewed. Commentary by the likes of Bruce Kovner (founder of hedge fund Caxton Associates who we track here on Market Folly) makes this book highly recommended. Definitely check out Market Wizards if you want some advice from some great minds in financial market history.
So, those are the first five books to be placed on our ongoing recommended reading list. We will continue to add names to the list each month, seeing as we have a huge list of books we've dubbed recommended reading.
