Investing & Trading Books: Recommended Reading List (Part 2) ~ market folly

Friday, December 12, 2008

Investing & Trading Books: Recommended Reading List (Part 2)

We're back with the second installment of Market Folly's Recommended Reading List. We're releasing the list in packs of 5 each few weeks as we build out our list of essential books for traders and investors. But first, if you've missed them, make sure to check out our two recent posts on some great holiday deals on stock market related items, as well as some gift ideas for that finance savvy person in your life (most likely yourself).

Now, onto the next segment of Market Folly's Recommended Reading List:

  1. The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means by George Soros. This one is self-explanatory, really. Soros talks about bubbles and the current market environment in his latest book. (Also worth reading is one of Soros' first books, The Alchemy of Finance).
  2. Hedgehogging by Barton Biggs. Hedge fund manager Biggs takes you inside Wall Street, hedge funds, and shows you how he learned to profit.
  3. The Essays of Warren Buffett. Letters written by Warren Buffett over the past decade which contain invaluable advice.
  4. Liar's Poker by Michael Lewis. An insider account of what really happens on Wall Street. One of our favorite reads.
  5. Margin of Safety by Seth Klarman. Here Baupost Group hedge fund manager Klarman lays out a "how-to" on risk-averse value investing. The book is no longer in print and is very hard to find, save for a some copies found at the link above.

And, here are the first five books we released in our initial Recommended Reading List a few weeks ago:

  1. 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.
  2. 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."
  3. 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.
  4. 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.
  5. 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.

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