Dan Loeb's Recommended Investing Books ~ market folly

Thursday, August 6, 2009

Dan Loeb's Recommended Investing Books

Third Point hedge fund manager Daniel Loeb recently outlined his recommended books on investing.  He says that, "everybody has to read" the following books:

- Edwin Lefevre's Reminiscences of a Stock Operator. Loeb says this is a classic and we definitely agree, as it has graced our recommended reading lists before. This book takes you inside the mind of a trader and provides you with insight, wisdom, and anecdotes from the financial world. "Let your winners run and cut your losses quickly" as well as "the trend is your friend" are legendary pieces of advice to come out of this book.

- Joel Greenblatt's You Can Be a Stock Market Genius. Dan mentioned that this is, "probably the best book ever." It details the niches of risk arbitrage, spin-offs, bankruptcies, mergers and the like as it relates to investing. Citing that these areas are often 'overlooked' by analysts, Greenblatt argues that you can exploit inefficencies. Loeb certainly agrees with that as Third Point's investment style is often centered around these types of strategies.

- Howard Schilit's Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud. This book takes an in-depth look at accounting fraud and how to identify warning signs of a company's impending problems. Obviously this book makes sense for anyone looking at balance sheets, 10-Q's and 10K's on a regular basis.

- Kathryn Staley's The Art of Short Selling. Loeb calls this "another good book" and he is not the only hedge fund manager that thinks so. In the past, we've covered Blue Ridge Capital's recommended reading lists and The Art of Short Selling was one of their top picks on the analytical side of things. This book covers a topic essential to those in the hedge fund game.

- *Updated* with new 2020 recommendation from Loeb - Quality Investing: Owning the Best Companies for the Long Term by Lawrence Cunningham.  Recommended in a recent quarterly letter from Loeb reflecting his current investment focus in 2020.

- *Updated* 2020 recommendation - No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings - The new book by Netflix's founder.

While that wraps up Loeb's favorite investing and finance reads, he did mention he had another favorite "non-investing" book. Jim Loehr's The Power of Story piqued his interest, as the book deals with how you can "change your destiny in business and in life." Hopefully you all enjoyed this collection of Dan's favorite reads, as there are definitely some good ones listed.

As always, you can check out our recommended reading lists in the following categories for further insightful books on the topics of investing, trading, and finance in general. Our recommended reading lists:

- Fundamentals / Valuation

- Technical Analysis / Charts

- Hedge Fund Blue Ridge Capital's Picks

- Overall good Investing & Trading Books

- Books By Stock Market Gurus

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