Whether you’re new to value investing or you’ve been at it for a long time, you cannot deny the importance of continually learning. The knowledge and insights you can gain from reading others’ points of view are advantageous. Even Bill Gates, the co-founder of Microsoft, revealed that he reads around 50 books per year. That’s almost one book every week!
Calm down; you don’t have to read like Mr. Gates to improve your skills. But it helps to pick up a good book to build a solid foundation if you’re a beginner or round out your abilities if you’re an experienced investor.
It can be a daunting task to look for resources, but these 11 books are some of the best publications about value investing from Graham to Buffett and beyond. Let’s have an overview of each in this article!
1. The Intelligent Investor, Benjamin Graham
This book is one of the best value investing books you can read. Some investors would consider The Intelligent Investor a trader’s bible. It’s no wonder Warren Buffett deems this book as “by far the best book on investing ever written.”
Benjamin Graham is looked up to by many as the father of value investing. The principles and techniques he shared through his book are time-tested lessons.
What Can You Learn?
He discusses how emotions drive the market, which makes it fluctuate uncontrollably. He then reveals how to spot companies that are currently below their actual value. Benjamin Graham mainly focuses on utilizing numbers and financial data to assess a company’s value and teaching readers how to control their emotions when trading.
This book is best for long-term investors as Graham was generally a long-term investor himself. However, the principles you can learn from this book can apply to both short and long term investment strategies. You will also learn how to evaluate businesses objectively and apply his principles on the margin of safety.
2. The Essays of Warren Buffett: Lessons For Corporate America, Warren Buffett
Learning under the tutelage of his mentor Benjamin Graham, Warren Buffett has become one of the most successful investors of our generation. Warren Buffett has always been open about his portfolio, and he shares information regarding the strategies he uses for his trades.
What Can You Learn?
Warren Buffett reveals some of his thoughts on several elements of investing and how to manage and master your portfolio correctly. He goes on to teach readers not to put faith in so-called “experts” as it is better that you learn to study and decide on your own.
This book valuable because you can read a definitive guide on how Warren Buffett selects stocks to add to his portfolio. He also emphasizes investing in businesses and companies that you understand.
If you want to learn how to manage your investments better, this book is for you. Like Warren Buffett’s mentor, Benjamin Graham, he also applies the principles of the margin of safety and is objective in choosing where you put your money.
3. Beating The Street, Peter Lynch
Peter Lynch started as an intern at Fidelity Industries and has risen the ranks over time. He managed the Magellan fund, which during his time, gave around 29% returns per year. The author further explains what strategies he uses to pick stocks and mutual funds in building a robust portfolio.
What Can You Learn?
You can start to build a better portfolio by understanding the companies you want to invest in. This book will also show you Peter Lynch’s step-by-step process of creating a mutual fund strategy and stock-picking techniques that will make you perform better than most investors.
4. The Complete Investor, Charlie Munger
Being one of Berkshire Hathaway’s most valued executives and Warren Buffet’s financial partner, he has gained significant knowledge and experience in value investing. As an investor, Charlie Munger has time and again outperformed the index, and in his book, he shares his strategies on how any trader can perform like him.
He emphasizes on having “elementary, worldly wisdom,” which helps investors become more knowledgeable about the market holistically and removes the element of emotion in his trades. It also shows Charlie Munger’s approach in life, which includes virtues and disciplines he practices personally.
What Can You Learn?
The Complete Investor talks about Charlie Munger’s systems and mental models that have consistently driven him. You’ll also read about his investing strategies lifted from his speeches and interviews, including commentary from fund managers and other investors.
This book doesn’t only talk about models and principles about investing; it also talks about how you need to have mental models for your life as a whole.
5. Common Stocks And Uncommon Profits And Other Writings, Philip Fisher
Philip Fisher, as an author, argues that the growth potential of companies and businesses should be the measurement of how an investor decides whether or not to invest. Contrary to most books that teach readers to look for stability and history of a company, this book values potential more. Albeit being riskier, this strategy can also be more rewarding.
What Can You Learn?
If you want to learn how to spot potential baggers, you need to read this book. Readers can learn more about how to evaluate a stock.
6. A Random Walk Down Wallstreet, Burton Malkiel
Burton Malkiel talks about how the market can fluctuate in a short period. This book will provide you with techniques and investing strategies that will help you become ready for when disruptions happen. A Random Walk Down Wallstreet also gives importance to fundamental analysis rather than drowning and confusing yourself with several data and number experts might spew.
What Can You Learn?
This book will give you a better understanding of how markets work and teach you how to use it to your advantage. Burton Malkiel also offers lessons on certain factors that can affect price and market sentiment, which you can use to improve your strategy.
8. The Little Book Of Value Investing, Christopher Brow
Christopher Brow presents a good analogy of how consumers purchase items that can fulfill their needs. He argues that much like investing, products that are expensive and affordable are readily available in the market—however, those who are knowledgeable when it comes to researching which stocks are at the moment, undervalued.
What Can You Learn?
This book systematically teaches readers how to analyze financial statements properly. It shows how you can compute numbers that can be important for your investing strategies such as, current ratios, quick ratio, and debt to equity ratio. Christopher Brow further explains how you can use these numbers to improve your investing techniques.
9. Security Analysis: Principles and Techniques, Benjamin Graham and David Dodd
While many investors put the Intelligent Investor on the highest pedestal of books about value investing, Security Analysis is its foundation. Readers will able to read an in-depth discussion on how to invest in individual companies with an emphasis on a value-based approach.
Graham and Dodd’s writing style in this specific book is similar to an actual textbook – precise and packed with information regarding the meticulous analysis of financial statements and the value it can add to your investment strategies.
What Can You Learn?
This book focuses on being objective and using numbers, specifically financial data, to improve your investment decisions. It gives importance to the masterful analysis of balance sheets and how you can be safe from the market’s distractions. If you’re a beginner in value investing, this book will provide you with a solid foundation.
10.Competitive Strategy, Michael Porter
In his book, Michael Porter mainly discusses the Five Forces analysis framework, which will give you a more holistic view of a company and its industry. Further study of the book will show you how you should look at the complexities inside several sectors and use them in your favor.
More than financial analysis, Michael Porter digs deeper into competitor analysis. Competitive Strategy will show you ways how you can predict competitor behavior. Porter’s framework gave birth to a new way of looking at rival companies and competitor assessment methods.
What Can You Learn?
If you want to dive into the path of becoming a better investor and focus on business analysis rather than financial analysis alone, this book is for you. More than financial formulas and ratios, you will learn how to understand the industry as a whole, look at how competitor companies move and predict potential economic outcomes.
11. Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing, Joel Tillinghast
Joel Tillinghast has a track record of being an investor who worked at Fidelity and has continuously beaten the market throughout his career for over 25 years. His book will discuss how being objective when handling your portfolio, especially during rocky times.
The author’s counsel will always ask, “what is the business worth” rather than predicting what might happen next. Tillinghast focuses on looking for companies that temporarily do not match their actual value due to a particular event. Instead of being fearful, he goes into the numbers and objectively decides whether it is worth investing in the company.
What Can You Learn?
Big Money Thanks Small will help you control your emotions during market turmoil and swiftly decide on your next move using objective facts. You will learn how to look for mispriced stocks and bargains in the market, which only comes through methodical investment planning.
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