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Financial Literacy

16 Must-Read Investment Books: The Foundation of Your Future Profits

 

16 Must-Read Investment Books: The Foundation of Your Future Profits

By Dr. Steve Sjuggerud, President, Investment U
Friday, April 11, 2003: Issue #229

Dollar for dollar, books can offer the best investing education you can get. The right investment books (along with The Investment U e-Letter, of course) can provide a solid foundation on which you can build wealth for years.

But before you head to the bookstore to load up on knowledge you should know that it’s also possible to go seriously wrong here. The wrong book will turn you off, bore you, or worse – it can cause you to end up losing a truckload of money. So today I thought I’d take a few minutes to help you sort through the thousands of investing books that are out there to find those that are just right for your situation.

You may recall that I’ve already listed what I feel are the very best investment books of all time. (See IUEL #206, “What to Read.”) So what we’ll do today is look at that list, add some new names, fill in the holes – and most importantly – talk about books on more “exotic” investments (like options) and the best ways to increase your investment knowledge in these areas. I’ve sorted my recommendations into 16 different categories so it should be easy to find a book that can help you no matter what your portfolio looks like right now.

Again, remember, you can REALLY go wrong by buying the wrong books. I would say that about 90% of the books in the “Investing” or “Personal Finance” section of the bookstore are bad books. As a general rule, they are often just “shortcut” books, written by writers. They are not books written by people who have actually built a successful career investing.

So please, before you buy another book, make sure you’ve made your way through this list. This is where the knowledge is and this is the foundation of your future profits

16 Books For Any Interested Investor

  • The best investment book of the last 12 months
    Leon Levy’s, The Mind of Wall Street: This guy had over a half-century of “in the trenches” investing experience. And this book contains his memoirs, basically, with many extraordinary lessons. No textbook can teach you what Leon Levy had lived. It won’t tell you what stock to buy or what bond to buy. But the perspective is priceless.
  • The best book about investment bubbles
    Devil Take the Hindmost, by Edward Chancellor, was the best book of a few years ago.
  • The best book about economics in plain English
    A tie: Economics in One Lesson, by Henry Hazlitt, Eat the Rich, by P.J. O’Rourke and The Making of Modern Economics, by Mark Skousen. If you have to pick one, buy Hazlitt if you’re over 50 P.J. O’Rourke’s if you’re under 50.
  • The best book about building a stock market system
    Another tie: Martin Zweig’s Winning on Wall Street and Tim Hayes’s The Research-Driven Investor. If you’re into computers and want to build a system, read Hayes’s book. Otherwise, read Zweig’s.
  • The best book about being a smart trader
    Market Wizards, by Jack Schwager and Trade Your Way to Financial Freedom, by Van Tharp. Both are essential reading.
  • The best book about options for individual investors
    There isn’t one. Most options books are REALLY bad. The popular Fontanills books impart information, not knowledge. The McMillan books are massive – massively boring – and again, don’t get you to profitable trading. Actually, you can throw tomatoes at me if you wish for recommending this, but here is a readable one: Bernie Schaeffer’s The Option Advisor. Schaeffer’s book is a good start, and he at least talks about how to take profits and protect yourself and he can write. The Four Biggest Mistakes in Options Trading, by Jay Kaeppel is also useful. But there’s not much in this area that’s really good.
  • The best book about bonds for individual investors
    Again, this book hasn’t been written yet. Try Bill Gross on Investing. It’s not a textbook – but isn’t that a good thing? It’s written by Bill himself – the world’s biggest money manager (not in body weight, you smart alecs – Gross is a little guy). Gross is the biggest in money under management – how about a few hundred billion dollars.
  • The best book about technical analysis
    Martin Pring’s Technical Analysis Explained is excellent. ‘Nuff said.
  • The best book about gold
    The Power of Gold, by Peter Bernstein. It doesn’t tell you how to invest, but it is the story of gold told by a great storyteller, with excellent insights into the gold markets.
  • The best book on how to succeed in short-term trading
    Financial Freedom through Electronic Day Trading, by Van Tharp and Brian June
  • The all-time investment classic
    Reminiscences of a Stock Operator, by Edwin Lefevre
  • The best book about real estate stocks
    Investing in REITs, by Ralph Block
  • The best book about investing for individual investors
    Well this could be a long list. Jeremy Siegel’s Stocks for the Long Run is good. A Random Walk Down Wall Street, by Burton Malkiel is also good, though more complicated than Siegel’s.
  • The best book on short-selling
    The Art of Short Selling, by Kathryn Staley.
  • The best historical reference book
    Anything by Paul Johnson. The History of the American People, by Paul Johnson is a “must-have” book.
  • The best book on oil
    The Prize, by Daniel Yergin – if you’ve got a lot of time on your hands. Check out the PBS video series “The Prize” instead at your local library. It’s a good show. And when you return that, check out the PBS series “The Commanding Heights” on the story of freedom by Daniel Yergin as well. Great stuff. You’ll want your kids to watch it and your grandkids.

I’ll stop here. You’ve got some work to do.

Good investing,

Steve

Today’s Investment U Crib Sheet

  • This list is only of books I’ve read. Of course there are others. Post your favorite investment books on the message board. Let me know what you like visit the Investment U message board.
  • To make life easier for you, and to help put a few nickels in the Investment U kitty so we can keep this free service going, you can buy all these books by visiting our Further Reading page. You end up paying the same price as you would if you went directly to Amazon, but this way Amazon kicks back a few cents per book to us for recommending them

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