Investment Books - The Best of the Bunch in My Opinion

Every investment blogger has to have his "best books list". My list will include books that I think will make you a better investor. Some books I have not read in many years so the commentary will be light on some of them. For the most part I have left out major textbooks since they involve a lot more work. For example, Security Analysis by Benjamin Graham. This is a very serious textbook type of book. People go to college to study investing and use this book as their main course material. It is a very important investment book but probably not practical for most investors.

1) The Only 3 Questions that (Still) Count by Ken Fisher (2008/2012). Amazon here . Ken Fisher is a money manager who has been writing a column in Forbes magazine for over 25 years. I have been following him since the mid 80's. In my opinion he is very good. He has authored many books but I think this is his magnus opus. One of the main takeaway's I get from this book is to challenge conventional thinking. The chapters on high P/E's and high debt are worth the price of the book easily.

2) The Intelligent Investor by Benjamin Graham (1949 - 2006). Amazon here. Warren Buffett considers this book to be one of best books ever written on investing. Needless to say I agree. There have been several editions over the years - my latest is 2006. I believe the original edition was published in 1949 with many editions to follow. Graham died in 1976 and is an investing legend. He is a former Professor at Columbia Business School in New York City (one of his students was Buffett). His scientific approach to investing led to the development of the value school of investing. The main idea that I get from this book is what I refer to as the purist scientific approach. He applies a no-nonsense scientific/mathematical approach to investing whereas previously people had previously looked at the stock market as a casino. Graham said that a common share was a part ownership in a business enterprise and it should be evaluated accordingly.

3) Capital Ideas by Peter Bernstein (1992/2006), Amazon here. If you want an overview of financial theories over the last 50 years this is an excellent book. If you read this book you will hear names like Harry Markowitz, Fisher Black, William Sharpe and others. These folks developed academic theories on the stock market, investing and other finance topics. Many received Nobel prizes for their work. To be honest I am not sure that reading this book this will make you a better investor but it remains an important book nevertheless.

4) One Up on Wall Street by Peter Lynch (1989/2000). Amazon here .This investment book was originally published in the late 80's. While running the Fidelity Magellan mutual fund from the late 70's until he retired in 1991 Lynch compiled one of the most impressibve investment records of all time. This book was written for the masses. It is quite readable for the average investor. The book offers such good practical advice that it worth re-reading every 2-3 years just as a refresher. Lynch's commentary on types of stock investments are worth their weight in gold.

5) Winning the Loser's Game by Charles Ellis (1976/2010). Amazon here. This excellent book first came out in the mid 70's and has been updated several times. My latest edition is 2010. This book covers a number of investing issues from market timing to portfolio management and costs. Mr. Ellis is a long time investment professional. The main issue that I get from this book is the difference between institutional and individual investing.

6) Common Stocks and Uncommon Profits by Philip Fisher. Amazon here.  Originally published in 1958 this book is available through Wiley Investment Classics. This book provides focus to the qualitative aspects of investing. Such issues as management quality, research and development, etc are reviewed. This book is quite readable for the average investor. Note that Phil Fisher is the father of Ken Fisher.

7) Fooled by Randomness (and The Black Swan) by Nassim Taleb. Amazon here.  Both of these books have been published in the last dozen years. I am not sure that economic books make you a better investor but this book stands unique in my opinion. Taleb reminds us of the unknowable. This is an issue that Buffett has also supported. Taleb also attacks the economic and financial establishment for their reliance on mathematical models. An important set of books. In order to fully appreciate Taleb's ideas you probably need to read some economic primers beforehand.

8) The Battle for Investment Survival by Gerald Loeb (1935 - 2010). Amazon here.  The book was originally published at the bottom of the Great Depression and was subsequently updated many times. Loeb was a big-time broker for E.F. Hutton back in the 20's and 30's. This book compiles many smallish chapters giving advice on investing. Loeb's approach differs from the buy and hold school. It is more closely related to momentum investing. There is a great deal of practical advice in this book that is still applicable today.

9) Common Sense on Mutual Funds by John Bogle (many/2009). Amazon here. There are a number of Bogle books on the market. Bogle is generally credited with the creation of the index fund in the mid 70's. He is probably the most feared man (or despised) on wall street. Throughout Bogle's writings he indicates that mutual funds are, over the long haul, relatively poor investments. This is due to costs and fees which remain too high. Bogle backs up his claims with statistical research over long periods of time. I am not certain that I agree with his position 100%. It is true that costs and fees are too high but his ideas imply a buy and hold investment strategy is best. I am not convinced that this true for small retail investors that know their way around markets.

10) Investment Fables by Aswath Damodaran (2004). Amazon here. If this book does not make you a better investor I am not sure what book will. Each chapter is dedicated to one specific investment concept that Damodaran reviews and often refutes. The main idea I get from this book is to keep an open mind to different investing ideas. Stay agnostic.

The above list is a brief list only. There are many other books that would rank a close second place. For example studying market history and asset bubbles is very important.