What To Read On Finance
Books
While you can probably access web sites quicker than you can find books, I still don't think there is a good substitute for books. First, reading books is easier on the eyes than reading web pages. Second, the books are more thorough, more comprehensive, and more in-depth.
Best Authors
These are the authors that have most influenced my philosophy.
John Train
John Train (founder of the firm Train, Smith Counsel, and Monstrose Advisors) is my favorite investment author. Train has DECADES of experience in managing money, a very successful track record, a very deep level of knowledge of other successful investors, an eagerness to share what he has learned, and a cogent writing style. In my opinion, he is the Papa Smurf of Wall Street.
Andrew Tobias
Of all the investment authors, Andrew Tobias is the wittiest and the easiest to relate to. You will laugh as you read about his junk mail and other experiences.
Peter Lynch
Of all the master investors, Peter Lynch is the most eclectic. During his days managing the Fidelity Magellan mutual fund, Lynch succeeded in a variety of investment styles, including value, growth, turnarounds, cyclicals, and asset plays.
Required Books
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The Money Masters by John Train (founder of Train, Smith Counsel, and Montrose Advisors): In this 1980 classic, John Train profiles the best money managers of all time, including Benjamin Graham, Warren Buffett, John Templeton, and Phillip Fisher. This book shows you what takes place in the minds of these investors and what makes them different from everyone else. Most of the money managers profiled are value investors, and even the growth investors are value investors in disguise. Train had difficulty finding successful traders, but the the profiles of the two successful traders (Stanley Kroll and Rod Wilson) he did find illustrate how nearly impossible it is to succeed in speculating.
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Value Investing Made Easy by Janet Lowe: This book provides an excellent overview of the methods and practitioners of value investing.
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Surviving the Coming Mutual Fund Crisis by Donald Christensen: Before you invest in a mutual fund, READ THIS BOOK. In this 1994 classic, Christensen describes the pitfalls of mutual funds, including derivatives, window dressing, and other shenanigans. Even some money market funds have pitfalls. Though we are still waiting for the bubble to burst, we already have seen derivatives fiascos in mutual funds, Orange County, hedge funds, mortgage-backed "securities"...
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Cash Flow and Security Analysis by Kenneth S. Hackel and Joshua Livnat: This book presents formulas for calculating free cash flow and examples of its application. In many cases, it has warned of danger that you would have missed had you relied only on earnings reports.
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One Up On Wall Street by Peter Lynch: This book, written by the famous former manager of Fidelity Magellan, provides an excellent overview of the various types of stock investing. What is unique about Peter Lynch is that he has been successful with a wide variety of approaches, such as asset plays, turnarounds, growth, cyclicals, and others.
Recommended Books
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The Intelligent Investor by Benjamin Graham: If it weren't for John Train's chapter on Benjamin Graham in The Money Masters, this book would be required reading.
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The Midas Touch by John Train: This is John Train's 1987 biography of Warren Buffett.
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Berkshire Hathaway annual reports: These are not ordinary corporate annual reports. In his letters to shareholders, Warren Buffett discusses not only the performance of Berkshire Hathaway and its underlying businesses, but the essence of business and investing as well. And he is not afraid to discuss his mistakes.
Links
Money Market Investments
Stocks
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