1. One Up On Wall Street by Peter Lynch
Peter Lynch is a legendary investor who ran the highly successfulMagellan Fund for Fidelity. I read this right after I graduated college. I highly recommend it. It is a well-written and straightforward common-sense guide to investing. This easy-to-read book teaches the layperson how to pick and analyze winning stocks. One of the most important pieces of advice that Lynch gives is to invest only in companies and industries that you understand.
2. How To Make Money In Stocks by William J. O’Neil
William J. O’Neil is the chairman and founder of Investors Business Daily(IBD). IBD is one of the best financial journals published, rivaled only by the Wall Street Journal. In this book, O’Neil outlines his growth-oriented CANSLIM investment system. He is a fan of analyzing the history of past stock market champs in order to predict new winners. Like IBD, this book has a heavy focus on technical analysis. At the same time, O’Neil advocates investing in companies with strong balance sheets and healthy sales and earnings.
3. 24 Essential Lessons For Investment Success by William J. O’Neil
This book is a complement to How to Make Money in Stocks. Again, O’Neill preaches his blend of technical and fundamental analysis. O’Neil shows investors how to recognize market tops and bottoms. One of his most important rules is to cut your losses on any stock that drops below eight percent. He also advocates a small, concentrated portfolio of just a few stocks. Mr. O’Neil is not a fan of asset allocation in the traditional sense. This book is for people who enjoy researching and investing in individual stocks. O’Neil wrote it as a resource for IBD readers. I am a fan of IBD and I still have both of these books on my shelf.
4. Reminiscences Of A Stock Operator by Edwin LeFevre
This is a fictionalized biography of the great Wall Street trader Jesse Livermore. Livermore spent his trading career making and losing millions of dollars. Sadly, he killed himself at the end of his life. Originally published in the 1920s, this entertaining book is very “old school.” The historical commentary that runs parallel to the narrative is fascinating. Especially interesting is Livermore’s recollection of successfully shorting stocks on a hunch, right before the 1906 San Francisco Earthquake. I enjoyed this book and I highly recommend it.
5. The Intelligent Investor by Benjamin Graham
Graham wrote this in 1949, but the wisdom is timeless. The book focuses on security analysis. I read the updated version with modern commentary by noted financial journalist Jason Zweig. Many consider Graham to be the father of value investing. Warren Buffet, who studied under Graham at Columbia, called the book “the best book on investing ever written.” This concise book offers a logical and systematic approach to investing. Graham believed in focusing on the basics when analyzing stocks. Among other things, he recommended focusing on things like earnings growth and stability, current ratios, and dividends. I still have my beat-up copy of this book.
6. The Millionaire Next Door by Thomas J. Stanley and William D. Danko
In this bestseller Stanley and Danko explore the secrets of the American millionaire. They dig deep into the lives of millionaires. The book explores millionaire race, ethnicity, neighborhoods, relationships, and psychology. The authors note that many millionaires live in middle-class neighborhoods and drive unassuming cars. Many millionaires are frugal and own their own businesses. Many are married to their college sweethearts. Stanley and Danko also explore the difference between high income and wealth. This easy-to-read book will open your eyes and erase many of your preconceptions about the rich.
7. The Millionaire Mind by Thomas J Stanley
The Millionaire Mind is the follow-up to The Millionaire Next Door. The first book explored the wealthy in America. The Millionaire Mind tells ushow they became wealthy, and shows us how to get wealthy ourselves. Stanley advocates common-sense principles like working hard, marrying the right person, living within your means, and picking the right career. The book is a bit long and dry at some parts. Still, it is well researched and worth reading. I have both of Stanley’s books on my shelf.
Any one of these seven books will help expand your knowledge of personal finance and investing. All of them are worth reading.
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