Must-read books for investors
Ilove reading and generally my aim is to read 100 books a year – 50 fiction and 50 non-fiction titles. In truth, it has been decades since I managed to finish 100 in a year, but I still read as much as possible. This week I want to suggest six books for traders and investors. I could compile a much longer list, but this is a great place to start in order to grow your knowledge of trading and investing.
BY PETER LYNCH Published back in the 1980s, it remains as relevant today as ever. Lynch writes in a conversational tone using an easy-tounderstand style, and his suggestions for how to select winning stocks are practical and easy to integrate into our existing investment practices. BY FRANCO BUSETTI This is a more advanced read than One Up on Wall Street, but it is well worth it. Since this book was written for the local market, all the examples used are companies that we know and understand. What I really like about this book is that Busetti pokes a lot of holes in conventional investing wisdom. I especially liked the chapter in which he pulls apart economists’ ability to predict the future. Using the rand/ US dollar exchange rate over a decade, he shows that projections for future levels of the currency were simply never right, not once. Now, sure, he was socking it to economists, but the theory applies to anybody trying to predict the future. BY BENJAMIN GRAHAM This is the number one book for many, as Graham is the father of value investing and the man who got Warren Buffett interested in stock markets. That said, this book is a tough read but the author’s formulas for value investing remain valid. But I must warn readers that last year I scoured the JSE looking for counters that met one of the two formulas presented by Graham for true value stocks, and out of the entire universe of JSE stocks not one met his criteria. BY PHILIP A. FISHER While Warren Buffett started life as a value investor, he is now a Fisher disciple and a follower of this book. This is a great practical title that really delves into the process of f inding awesome stocks to invest in. Again, like Lynch, Fisher uses practical theories that do require an advanced degree to understand and this book probably helped my investing more than any other I have read. This is one title I would recommend for traders. More t han a ny t hing, t r ading i s about psychology and nobody understands and explains this better than Douglas. This is another book that’s not easy to read – there are no pictures or funny anecdotes – but it remains the most i mportant book on t rading I have ever read. I reread this book every December holiday and have done so since it was published back in 2001. BY MICHAEL COVEL This is another book for traders. I am a f irm believer in trading the trend and while this book doesn’t give any systems on how to do this, it does make the case for trend trading with many examples. It also explains the shortcomings the concept has.