Nine Invaluable Resources For Every Investor
by Marc Lichtenfeld, Advisory Panelist
Friday, August 21, 2009: Issue #1072
Heaven help me… Mrs. L is on a mission.
My house has been turned upside-down, as she prepares to redecorate several rooms. Fortunately for the household, my input is neither required, nor requested.
Undeterred by the recession, the missus has made Pottery Barn her second home. And look for Williams Sonoma’s (NYSE: WSM) earnings to cruise higher next quarter, thanks to her spending there.
Trouble is, when I return home from work, the items I expect to find in their regular spots are gone, replaced by new stuff.
Yesterday, I found my books lined up in the hallway and was asked to donate the ones I don’t want anymore. However, a good chunk of my library consists of investing books, which I like to consult from time to time.
I’m often asked for recommended investment books, and as I transferred the books from the floor to the new bookshelf (excuse me, escritoire), I revisited some of my favorite titles. Here are the ones that I’ve found most valuable in my career…
Let These Authors Propel You Towards Greater Investment Success
Make some room on the bookshelf – because you’ll want to add these investment books to it if you want to increase your chances of investing success…
- Contrarian Investment Strategies – The Next Generation (David Dreman): My colleague Louis Basenese mentioned this in his investing in small-caps column earlier this week. Like my beloved Yankees, Lou has been knocking the cover off the ball, thanks in part to Dreman, who is considered the father of contrarian investing.
As an analyst, I worked at a strictly contrarian research shop. In fact, I wasn’t even allowed to initiate coverage on a company unless it went against the consensus. I trained with two of the greatest contrarians in recent decades. So believe me when I tell you that Dreman’s book is a must read. It shows you how and why contrarian investing works.
- Understanding Wall Street (Jeffrey Little): This is the first book I ever read about investing. It’s terrific for beginners. Written in an easy-to-understand language, it explains what stocks and bonds actually are. If you’re new to investing, I cannot recommend this book enough.
- The Little Book That Beats the Market (Joel Greenblatt): The author is an extremely successful money manager, who shows investors how to beat average market returns with a value investing approach. You can read this in one afternoon, yet it contains as much valuable information as you’d find in most 500-page tomes.
- Get Rich With Options (Lee Lowell): If you want to know how to make money with options, learn from the guy who did it and retired in his 30s. Mt. Vernon Research’s resident commodities specialist, Lee Lowell, shows investors the most profitable strategies and tools to use. The second edition of the book is due out in September.
- One Up on Wall Street (Peter Lynch): This classic teaches investors how to use what they are already familiar with to make money. Lynch takes a long-term outlook as he guides investors through the analysis process of companies that we interact with every day.
- The New Market Wizards (Jack Schwager): Profiles successful traders such as Stanley Druckenmiller, Linda Bradford Raschke and Blair Hull. I like that the traders open up in these interviews, letting readers in on their processes and hearing about their failures just as much as their successes. Schwager does an excellent job of selecting traders in various markets with different trading styles.
- Reminiscences of a Stock Operator (Edwin LeFevre): No investment book list would be complete without this. Originally published in 1923, it’s the marginally fictionalized biography of legendary speculator Jesse Livermore. It’s believed that Livermore actually wrote the book with LeFevre’s help. Livermore walks the reader through his considerable ups and downs. It’s a fascinating tale and a really insightful look back at market speculation in the early 20th century.
- Technical Analysis of the Financial Markets (John Murphy): While technical analysis can sometimes sound very complex, Murphy does a great job explaining the theories and indicators in a simple language. If you ever look at charts, you need to read Murphy’s book first – it’s the bible of technical analysis.
- The Secret of Shelter Island (Alexander Green): Once you’ve read all the investing books and amassed a fortune, The Oxford Club’s Investment Director will illustrate why money is not the most important thing in life. A compilation of his popular Spiritual Wealth essays, Shelter Island provides inspirational, whimsical and sentimental stories that remind the reader what is truly important.
What are some of your favorites? Leave your comments below – I still have space in the escritoire.
Good investing,
Marc Lichtenfeld
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7 Responses to “Nine Invaluable Resources For Every Investor”
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Marc is a senior analyst at Investment U. His investment career started out at the trading desk of Carlin Equities in San Francisco, CA, where he executed dozens of trades each day for his clients.
That is a great list. I have some of them and others are going to be bought soon. Can you recommend a good book about shorting stocks. Thank you.
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battle for investment survival
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How about…….
How i made $2,000,000 in the stock market.
by Nicolas Darvas
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Hi Marc-
I would also add The Richest Man In Babylon by George S. Clason. Believe it was originally recommended by the Oxford Club. Tells how to put money aside and how to invest it. Easy read and very entertaining.
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To this great collection I would have to add: Alexander Elder’s “Come Into My Trading Room”. Reading this book and his previous book in my early years trading help set a style I use to this day.
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You haven’t mentioned Christopher H. Browne’s “Little Book of Value Investing.” Not contrarian, but a great introduction into understanding financial statements.
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Absolutely required reading for subscribers to investment advisory services is Harry Browne’s “Why The Best-laid Investment Plans Usually Go Wrong”.
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