Saturday, November 4, 2017

The most important books for stock market investing

One of the secrets behind successful investors is that they read a lot and imbibe the great learning of many value investors. We often call this "Vicarious Learning" i.e. learning from others.

These lessons from great investors become even more important when we can learn from their mistakes and then follow the process which they have refined after repeated mistakes. These are time-tested process on value investing which helps investors to make better decisions.

Charlie Munger once said, “You don’t have to pee on an electric fence to learn not to do it.” 

Here is the list of some of the most important books on investing which one should definitely read:

Common stocks and uncommon profits - Philip Fisher

This is an all time classic on investing. Gem of a book which explains in detail when to buy and when to sell. Fisher has described in detail the process for selecting great businesses with competitive advantages.

He has also given detailed checklist for stock selection. This is must read book for every serious investor..!!

The Intelligent Investor - Benjamin Graham

It is a widely acclaimed book by Benjamin Graham on value investing. Written by one of the greatest investment advisers of twentieth century, the book aims at preventing potential investors from substantial errors and also teaches them strategies to achieve long-term investment goals.

Over the years, investment market has been following teachings and strategies of Graham for growth and development. In the book, Graham has explained various principles and strategies for investing safely and successfully without taking bigger risks.

Penned by the famous mutual-fund manager, Peter Lynch, this book elaborates the many advantages that an average investor has over professionals and how they can help them reach financial triumph.

How To Use What You Already Know To Make Money in The Market explains how your knowledge alone can assist you beat the pros of investing. He has explained process to find great businesses surrounding us by keeping eyes and ears open!! His approach to investing is simple and powerful.

Five rules for successful stock investing - Pat Dorsey

This book is another investment classic which definitely reserves to be reading list of every value investor. Pat Dorsey has beautifully explained the process of finding moats - competitive advantages of great businesses that prevents competition to enter into its territory.

He has explained financial statements in very simple and powerful way. This is then followed by detailed discussion on how to find moats in different sector with powerful examples.

Poor Charlie's Almanack - Charlie Munger

This is gem of a book written by Charlie Munger - the Guru of Warren Buffett. This book is encyclopedia of life lessons of Charlie Munger and his investment journey.

The book is must read not only for improving investment decisions but also life decisions. It has a Ten Talks section that covers a wide range of his interests that ranges from how one attains worldly insight to how his Multiple Mental Models could be used for business.

Also published in Transfin.