Knowledge got me to where I am today. These are exceptionally good investing books.
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy – A really fantastic book by Thomas Stanley. He collected actual data about America’s millionaires and this is a fantastic guidebook for individuals who would like to be millionaires themselves. This book was instrumental in re-writing my thinking about what it is to be a millionaire. Hint: It’s not what you see on TV and not what you’d expect from some of the wealthiest people in America.
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel – Really this is the place to start for any value investor. This is the book Warren Buffet calls the “Best book ever written on investing”, and I think he’s dead right!
The Little Book That Still Beats the Market – It may be a small book with a goofy title, but Joel Greenblatt is no joke. His firm (Gotham Capital) generated an annualized return of 40% from 1985 to 2006. The book’s magic formula looks for two things in an investment: high earnings yield and high return on capital. The way Greenblatt defines these two things is a bit unusual. Worth a look! Joel Greenblatt’s other book You Can Be A Stock Market Genius is also good!
The Dhandho Investor: The Low-Risk Value Method to High Returns – While the book is rather short, it’s definitely not your typical investing book. Mr Pabrai combines a whole bunch of ideas from the books above, and combines them in a easy to read package. Implementing those ideas is the hard part. Pabrai takes very concentrated value positions in his hedge fund, and he’s had a very successful record. “Heads I win, tails I don’t loose much”.
The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New — One of the best books ever written about building wealth over the long term. It turns out we can learn a lot about our investing future from looking at the past. Wharton Professor Jeremy Siegel takes a long hard look at the commonly held “myths” of investing in common stocks. Is growth more important than value? Do dividends matter? Over the long term, what is more important for the growth of wealth?
The conclusions found are surprising.
Influence: The Psychology of Persuasion is actually a book about behavioral psychology. The author Robert Cialdini spent decades studying human behavior and was able to boil down influence to 6 main principals. These same principals are used in practically every marketing pitch found around the world. Being able to identify them is useful for anyone who wants to avoid manipulation on their road to financial independence.