The following is a list of ten books concerning the financial market. They are a fascinating read for beginner and advanced traders alike. Whether you are just getting into stocks or have been a life-long trader you are bound to enjoy these ten classics. The authors on the list are some of the brightest minds the markets have ever seen, including Graham, Soros and many more. You will be running to the nearest bookstore to buy one of them after finishing the list.
The Intelligent Investor is the fundamental book on Value Investing. Value Investing is a strategy where investors buy stocks that trade for less then their intrinsic value. Intrinsic value is determined by various value metrics like Price to Earnings ratio and Price to Book Ratio among others. Graham began teaching his theory at Columbia in 1928. Graham's most well known disciple is Warren Buffet.
Graham’s favorite allegory in this book is Mr. Market. Mr. Market is portrayed as a man who shows up on someone’s door offering to buy or sell stock shares at different prices. His prices can be plausible or ridiculous. The point of Mr. Market is to show that investors should focus on actual business performance and not place too much emphasis on market value.
This book is a great read. It is said that the same way serious physicists read Sir Isaac Newton’s teachings to learn about gravity and motion, serious investors read Benjamin Graham’s work to learn about finance and investments.
In the Devil Takes the Hindmost, Edward Chancellor examines the nature of speculation. He begins in medieval Europe and goes all the way to today’s internet craze.
Chancellor looks at both the psychological and economic forces that guide people to invest their money in markets. He also looks at how markets are manipulated, made and unmade and who wins when speculation runs rampant.
Chancellor’s book provides a great history of markets. He does not attempt to explain how to curb financial speculation. He sees it as a force of nature and not as greed or something that should be limited or prevented. Chancellor’s book is another truly interesting read.
Stock Market Wizards is the third in the bestselling Market Wizard series. When it was published in 2001 a decade had passed since the previous book of the series.
This book features a dynamic decade that saw a collapse in commodity prices and failures of the world’s leading hedge funds. Stock Market Wizards features interviews with the traders that achieved tremendous success during those times.
These traders include an Ohio farmer who consistently made triple digit returns and a Turkish man who turned 16,000 dollars into six million dollars. This book is a must own for those looking to succeed in the stock market.
In this novel, Charles Kindleberger finds that there is a common thread between manias, panics, and crashes. He finds that market crises have always shared greed and desire.
This book can be thought of as a warning, reminding the reader that what goes around comes around. Kindleberger's brilliant history reveals how financial crises follow a nature-like rhythm: they peak and purge, swell and storm.
It provides an intelligent and entertaining account of the history of crises, speculative manias and Lehman Brothers, this book has been hailed as a true classic. It is both timely and timeless.
Alchemy focuses on purifying and perfecting certain objects. In this book, George Soros, known as the man who moves markets, presents a theoretical and practical account of current financial trends and a new way to understand the financial markets today.
Reading this book can help someone perfect their investment strategy in today’s market. Soros also presents his new “theory of reflexivity” which shows his unique investment strategies.
This book features extraordinary advice and valuable business lessons. The Alchemy of Finance reveals the principles of an investing legend.
In the most disastrous financial crisis since Great Depression, Soros writes about the causes of the crisis and proposes solutions to confront it.
Soros places the crisis in the context of his time and studies how individuals, as well as institutions, handled the boom and bust cycles that are now so prevalent in today’s global economic activity.
Soros also puts forward a conceptual framework for understanding human affairs in general and financial markets. This book helps the reader understand the great credit crisis and its implications for our nation and the world.
Expectations Investing offers a powerful alternative for identifying value-price gaps. A valuation gap is the difference in the actual market value of a company and the value that the owner expects to sell it for to achieve his/her needs.
Mauboussin provides everything an investor needs to utilize the discounted cash flow model successfully. He also suggests that investors should begin estimating expectations embedded in a company’s stock price rather than forecasting cash flows.
Mauboussin also introduces an “expectation infrastructure” framework for tracing the process of value creation from the simple economic forces that form a company’s performance. Readers of Expectations Investing will have a fundamentally new way to evaluate all kinds of stocks, which will set them up for a path to success.
In the Wisdom of Crowds, Surowiecki presents a surprisingly simple idea: Large groups of people are smarter than an elite few.
Soruwiecki says that there are four essential elements that form a popular crowd opinion: diversity of opinion, independence, decentralization, and aggregation.
He also identifies the types of crowd wisdom as cognition, coordination, and cooperation. Surowiecki uses the benefit of crowd knowledge across all types of topics such as popular culture, psychology, ant biology, politics, and behavioral economics.
His idea may seem simple but it presents an important lesson for how we live our lives, select leaders, run companies, and think about the world.
Greenwald, a Columbia Business school professor, offers a bold new theory of competition that is easy for strategic planners to apply in the real world. He argues the essential factor in competitive advantages is how easy it is for competitors to either expand or enter in a given market.
If a company can form strong barriers to entry it can manage these advantages, anticipate its competitor’s moves, and achieve stability through bargaining and cooperation. Greenwald also explains what to do in the case of weak or nonexistent barriers. His lessons can be applied to any business owner.
Competition Demystified will give owners a new way to take advantage of competitive advantage and achieve phenomenal profits. It will become a management classic.
It is believed that the Great Depression was caused by events beyond anyone’s control. Ahamed rejects this idea. He believes it was decisions made by a small number of central bankers that resulted in the largest economic meltdown in American history.
In the Lords of Finance, we meet the bankers who made these decisions. After World War I, these bankers attempted to reconstruct international finance. They were untired by their common fear of inflation as the greatest threat to capitalism, as well as a common vision that the solution was to turn back the clock and return to the gold standard.
In the beginning of their strategy, it appeared they were correct as world currencies were stable and capital flowed freely throughout the world. However, eventually the gold standard became a restraint, and the world economy began a downward spiral that would ultimately be known as the Great Depression.
Lords of Finance is a important reminder of the enormous impact central bankers decisions can have and the dire consequences when they are wrong.
These books help guide traders make everyday decisions. They display the thoughts of extremely important minds.
These books discuss many different important economic concepts or events, such as value investing, market crashes, etc. We hope you find this list useful. Thanks for reading!
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