Ultimately there is no magic book about stocks. It's like reading a book about driving – you can read all the books in the world but it's not the same as sitting in that car and putting your foot on the gas. The only way you really learn is actually getting in the car, putting the car into gear and driving.
That being said, there are many investing mistakes that can be prevented and lessons that can be learned through reading some books. Having repeatedly come across a number of posts asking for the best books to read for new investors, I thought it's best to compile a list of the top books in one place to help people.
- One up on Wall Street by Peter Lynch – Arguably the best book to start with on finance. Enjoyable and excellent.
- The Intelligent Investor by Benjamin Graham – A classic recommendation that Warren Buffet infamously claims is the best book on investing ever written. It is a must-read, however maybe not the best place to start for new investors, it can be dry and hard to follow at times.
- Little Book of Common Sense Investing by John Bogle – A must read to understand what you are up against. The best book on investment fallacies and index funds by Bogle himself
- A Random Walk Down Wall Street by Burton Malkiel – Another great book that gives a detailed analysis of different investing techniques, including technical analysis and fundamental analysis, exposing the demerits of both techniques. There are a few small flaws and some argue that Bogles work is simply better and more modern.
- Why Stocks Go Up and Down by William Pike and Patrick Gregory – Great book to improve your understanding of fundamental analysis. Explains to you all of the basics of how stocks work with the framework of a company. It sets you up to review and analyze financial statements, common ratios (PE, EPS, etc.) and financial terms (EBITDA, EV, etc.)
- Mindset by Carol S. Dweck – A non-finance must read for anyone in business. Great place to start even if it's not about finance
- Fooled by Randomness by Nassim Taleb
- Built to Last by Jim Collins and Jerry I. Porras – a fantastically researched work on how companies are built to last forever
- Good to great by Jim Collins and Jerry I. Porras – An excellent book on business. How do good companies build into something truly great
- Stocks in the long run by Jeremy Seagal
- Little book that Builds Wealth by Pat Dorsey
- Uncommon Sense for the Thoughtful Investor by Howard Marks
- The Warren Buffet Way by Robert Hagstrom – A great book if you want a modern view on traditional ideas, as well as a focus on Buffet
- Security Analysis by Ben Graham – A textbook but a great one. Read this one if you start to understand but still can't answer the question “How do people set price targets or set valuations”
- The Simple Path to Wealth Book Summary by JL Collins
- Psychology of Money by Morgan Housel
- Common Stocks and Uncommon Profits by Philip Fisher
Thought I'd add some other useful pieces that have helped me:
- Warren Buffets shareholder letters written to Berkshire shareholders. They are insightful and give great input on what matters when looking at companies according to one of the greatest investors of all time
- Investopedia – Quality, unbiased and factual articles explaining terms and concepts. Great place to further your learning.
Interested to hear which of these books most helped you. Feel free to share any of your favorite books that aren't included in this list!
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