Best Investment Books 

Best Investment Books of All Time
Where finance theory meets practice

By Tommy L.

Billionaire Warren Buffett is a reputable on his long term investment performance who is one of the most successful investors in the modern world. When he was asked for guidance and suggestions, he said:

 

Read 500 pages every day. That’s how knowledge works. It builds up, like compound interest.

 

He is not alone. Another remarkable investor, Mark Cuban, spends up to three hours a day on reading books and Bill Gates, founder of Microsoft reads 50 books a year.

According to a research done by Tom Corley, author of Rich Habits: The Daily Success Habits of Wealthy Individuals, wealthy people read for self-improvement, education and success.

There are so many investment and finance book recommendations and what should you look for?

 

Sometimes, the books recommended by professional investors are too advanced for beginners or general public. However, the easy-to-read items are sometimes not pointing you to be success in investment.

 

To make a balance between these considers, I refer to four different sources on book rankings which are:

  • Goodreads (One of the largest social cateloging websites on book recommendations)

  • Book Depository (An UK-based online book seller provides best selling rankings)

  • The Washington Post (A major American daily newspaper)

  • The Ways to Wealth (It chose the best investing books from 24 top investors & institutions)

 

The 10 Best Investment Books of All Time are:

  1. The intelligent investor by Benjamin Gramham

  2. The essays of Warren Buffett by Lawrence Cunningham

  3. Security analysis by Benjamin Gramham

  4. One up on Wall Street by Peter Lynch

  5. A random walk down Wall Street by Burton Malkiel

  6. The little book of common sense investing by John Bogle

  7. Common stocks and uncommon profits and other writings by Philip A. Fisher

  8. Market Wizards by Jack D. Schwager

  9. You can be a stock market genius by Joel Greenblatt

  10. The barefoot investor by Scott Pape

 

I put the details on how to find the books at the bottom of this article.

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No. 1: The Intelligent Investor

Across many of our selected sources, The Intelligent Investor is listed on the top of all best investment books. No matter professional investor or general public, they all find this book is very influential in investment.

Many of us agree Benjamin Graham is the greatest one in value investing. He wrote two of the founding books in neoclassical investing, The Intelligent Investor and Security Analysis. These two books are recommended by many investment gurus as well as receiving a lot of good ratings from general public.

Graham graduated from Columbia University and eventually founded the Graham-Newman Partnership. Warren Buffett is one of his students.

 

Buffett comments on Graham’s book, The Intelligent Investor, “If I hadn’t read that book in 1949, I’d have had a different future.”

 

Since its original publication in 1949, Benjamin Graham's book has remained the most respected guide to investing, due to his timeless philosophy of "value investing", which helps protect investors against the areas of possible substantial error and teaches them to develop long-term strategies with which they will be comfortable down the road.


Over the years, market developments have borne out the wisdom of Graham's basic policies, and in today's volatile market, "The Intelligent Investor" is the most important book you

No.2: The Essays of Warren Buffett

Value investing guru Warren Buffett did not write any book describing himself or investment principles. However, as a Chairman and CEO of Berkshire Hathaway, he wrote every year in his letters to the company’s shareholders which unveils his investment philosophy.

The Essays of Warren Buffett is a collection Warren Buffett's letters to Berkshire Hathaway shareholders which gained an enormously valuable informal education in the art of investing. Broad in scope and long on wisdom, Buffett's letters explain his principles on sound investing, selecting managers, valuing businesses, using financial information profitably, and other vital topics for investors. 

Features investing advice in plain English from one of the world's most legendary investors. Includes Buffett's insights on the current financial crisis and recession. Offers new and potent insight on good corporate governance and other issues vital to executives and managers

If you are looking for Buffett’s biography, The Snowball by Alice Schroeder is a great book to know more about this tycoon’s life.

No.3: Security Analysis

The first edition was published in 1934, following the stock market crash. The author’s intention of publishing the book is to scold Wall Street for its focus on a company’s reported earnings per share and finding the intrinsic value of a company. But it turned out to be a thick textbook with more than 700 pages.

As compared to The Intelligent Investor, Security Analysis is preferred by people who has basic investment knowledge. It explains the timeless investment principles in details which are:

  • Always invest with a margin of safety

  • Expect volatility and profit from it

  • Know what kind of investor you are

Readers who have investment experiences could have a head start on understanding his winning philosophy from this book to improve their long term return.

As relevant today as when they first appeared nearly 75 years ago, the teachings of Benjamin Graham, "the father of value investing," have withstood the test of time across a wide diversity of market conditions, countries, and asset classes.

No.4: One Up on Wall Street: How to use what you already know to make money in the market

“In the world of investing, Peter Lynch is legendary,” said by Jason Zweig, who is the editor of the revised edition of Benjamin Graham’s The Intelligent Investor.

Lynch was hired permanently by Fidelity in 1969. In 1977, Lynch headed Magellan Fund which had $18 million in assets. Under his management, the fund grew to $14 billion when he resigned as a fund manager in 1990.

From 1977 to 1990, Magellan fund average annual return is 29.2% as of 2003 had the best 20-year return of any mutual fund ever. Lynch has written 3 books, other than One Up on Wall Street, he also wrote Beating the Street and Learn to Earn.

 

Peter Lynch believes that average investors have advantages over Wall Street experts. Since the best opportunities can be found at the local mall or in their own places of employment, beginners have the chance to learn about potentially successful companies long before before professional analysts discover them.

 

This headstart on the experts is what produces 'tenbaggers', the stocks that appreciate tenfold or more and turn an average stock portfolio into a star performer. In this fully updated edition of his classic bestseller, Lynch explains how to research stocks and offers easy-to-follow directions for sorting out the long shots from the no shots.

 

He also provides valuable advice on how to learn as much as possible from a company's story, and why every investor must ignore the ups and downs of the stock market and focus only on the fundamentals of the company in which they are investing. 

No.5: A Random Walk Down Wall Street: The time-tested strategy for successful investing

Malkiel had held various positions across different institutions including professor in university, director in and chief investment officer in financial advisory firms.

The most influential work of Malkiel is his examination of some popular investing techniques, including technical analysis and fundamental analysis. He found significant flaws in both techniques and concludes passive investment strategies are superior to those techniques.

A Random Walk Down Wall Street is well established as a staple of the business shelf, the first book any investor should read before taking the plunge and starting a portfolio. With its life-cycle guide to investing, it matches the needs of investors at any age bracket.

Malkiel shows how to analyze the potential returns, not only for stocks and bonds but also for the full range of investment opportunities, from money market accounts and real estate investment trusts to insurance, home ownership, and tangible assets like gold and collectibles.


What Malkiel suggesting for non-professional investors is a passive strategy. Warren Buffett in his 2014 letter to shareholders wrote about passive strategy:

 

The goal of the non-professional should not be to pick winners – neither he nor his “helpers” can do that [..] Put 10% [..] in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.

No.6: The Little Book of Common Sense Investing: The only way to guarantee your fair share of stock market returns

Bogle was named by Fortune magazine in 1999 as “one of the four investment giants of the twentieth century”.

 

What makes Bogle so great in the investment industry?

Graduated from Princeton University, Bogle focused his career in banking and investments. In 1974, he left his role in Wellington Fund and founded the Vanguard Company which is now one of the most respected and successful companies in the investment world.

Bogle founded the first index mutual fund in Vanguard to general public which changes our world in investing.

This legendary mutual fund veteran reveals his key to getting more out of investing: low-cost index funds. Bogle describes the simplest and most effective investment strategy for building wealth over the long term: buy and hold, at very low cost, a mutual fund that tracks the S&P 500 Stock Index. Such an index portfolio is the only investment that guarantees your fair share of stock market returns.

 

Little Book of Common Sense Investing gives you a solid strategy for building your financial future:

  • Build a broadly diversified, low-cost portfolio without the risks of individual stocks, manager selection, and sector rotation

  • Forget the fads and focus on what works in the real world

  • Emphasize business reality over market expectations

  • Understand how index investing is the only game that assures your fair share of stock market returns

No.7: Common Stocks and Uncommon Profits and Other Writings

Before introducing the author and the book, here are the comments on him and his book:

Philip Fisher was one of the great investors of all time” by Morningstar, Inc, a global financial services company;

There was a book by Philip Fisher written around 1960 called Common Stocks and Uncommon Profits. It’s one of the great books on investing.” by Warren Buffett in the 2018 Berkshire Hathaway annual shareholders meeting.

Fisher is a professional investor and he practice long-term investing with specialising in innovative companies driven by research and development.

 

He wrote several books but this book is so influential and invaluable reading and has been since it was first published in 1958.

 

In his book, Fisher tells you 15 points you need to think on what companies you should buy. Regarding to the question on when to buy and sell, Warren Buffett is strictly a Fisher’s follower.

 

Buffett has said about the book, “I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits…A thorough understanding of the business, obtained by using Phil’s techniques…enables one to make intelligent investment commitments.

No.8: Market Wizards: Interviews with top traders

In the 10 Best Investment Books of All Time, Market Wizards is the only book about short term stock trading and financial derivatives. Schwager is a recognized industry expert in futures and hedge funds.

 

He is a Co-founder and Chief Research Officer of FundSeeder. He has more than 30 years in working various fund advisory firms and Wall Street’s leading firms.

Schwager interviewed dozens of top traders across most financial markets. While their responses differed in the details, all of them could be boiled down to the same essential formula: solid methodology + proper mental attitude = trading success. 

  • Features interviews with superstar money-makers including Bruce Kovner, Richard Dennis, Paul Tudor Jones, Michel Steinhardt, Ed Seykota, Marty Schwartz, Tom Baldwin, and more

  • Tells the true stories behind sensational trading coups, including the one about the trader who turned $30,000 into $80 million

 

Originally written in 1989, Market Wizards was updated in 2012, with interviews from this generation’s top traders.

 

CFA Institute comments on Schwager’s books are “so influential” that readers can understand traders’ thought processes and their decisions to become speculators through the interviews.

No.9: You Can be a Stock Market Genius: Uncover the secret hiding places of stock market profits

In 1985, Greenblatt started a hedge fund, Gotham Capital and the fund has been beating the Dow (with returns of 50 percent a year) for more than a decade with an annualized return of 40% to 2006.

 

And now, in this highly accessible guide, he's going to show you how to do it, too.

You're about to discover investment opportunities that portfolio managers, business-school professors, and top investment experts regularly miss--uncharted areas where the individual investor has a huge advantage over the Wall Street wizards. 

 

The book details how individual investors can use special situation investing to beat the market.

 

This involves investing in:

  • Spin-offs

  • Restructurings

  • Merger Securities

  • Rights Offerings

  • Recapitalizations

  • Bankruptcies

  • Risk Arbitrage

No.10: The Barefoot Investor: The only money guide you’ll ever need

It is the bestselling book in personal finance category in recent years which was published in 2016 and written by an Australian.

Scott Pape published his first book The Barefoot Investor: Five steps to financial freedom in in 2004, it has been re-published and released throughout Europe, India, China and Russia. With Pape’s popularity, CNBC launched a programme, “The Barefoot Investor”, in 2009.

The success of Pape’s book is because it shows you how to create an entire financial plan that is so simple you can sketch it on the back of a serviette ... and you'll be able to manage your money in 10 minutes a week.

 

This book is full of stories from everyday Aussies - single people, young families, empty nesters, retirees - who have applied the simple steps in this book and achieved amazing, life-changing results.

 

The Guardian comments on Pape’s books, “It has been a phenomenon, disrupting the way publishing deals are done and changing many Australian’s attitudes to money, saving and banking.”

Conclusion

The 10 Best Investment Books of All Time are very influential on the modern investment practices and success. 

Many of the best investment books recommended are about how to put your money in stock market for long term value growth. As said by Warren Buffett, “Risk comes from not knowing what you’re doing.”, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” You should know what you invest by doing your research.

If you don’t have time to do research, passive strategy is recommended by investing in index funds liked what John Bogle suggested.

 

If you are looking for how to prepare an investing career, read 500 pages every day. That’s how knowledge works. It builds up, like compound interest. said Warrant Buffett

Methodology of choosing Best Investment Books of All Time

From the four chosen sources, I look for “Best investment books of all time” or “Popular investment books” in their websites. They rank the books with their different criteria, such as readers rating, number of books sold, or professional journalists rating.

Next, I take a simple weighted average rankings for each book to find 10 best investment books of all time. 

For Example, the book “The Intelligent Investor” rankings in each source are, 1 (Goodreads), 2 (Book Depository), 13 (The Washington Post) and 1 (The Ways to Wealth). The weighted average ranking is 4.25 and it is the score in my list.

 

If the score is the lowest, it is the highest ranked book in my Best Investment Book of All Time.

 

Following this rationale, I find the top 10 books which I just shared to you in above.

 

The search was done on 16 July 2019.

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Note: Some of the links in this page contain affiliate links. I will earn a small commission for any purchases you make, though there is no extra cost to you. 

The products or services I recommend only I use them myself or after my investigation and truly believe they are useful to you. Don’t forget there are many other options out there – these are simply my preferred choices.