5 Investing Books that Make you a Complete Investor
5 Investing Books that Make you a Complete Investor
Here are 5 Books that cover all the aspects that make a successful investor.
There are hundreds of investing books and thousands more that are indirectly linked to investing. While I obviously didn’t read all of them, I did read the 40-50 most popular investment books, and by now, I feel like I have a pretty good sense of the most valuable books on that topic.
So I thought, why not create a list of books, no more than a handful, that cover all of the important aspects of investing? I believe the five books I chose do a pretty good job of that.
This does not mean you should stop reading new books after you finish these, but most books will offer just another perspective on what you already know after studying the ones mentioned in this article.
Instead of reading a new book every week, I’d rather revisit these books from time to time. Trust me, a year after you finished these books for the first time, you will think it’s a new book when you reread it.
When creating a list of only five books, you have to make many decisions and trade-offs.
I decided the following topics must be covered to become a complete investor.
First, general investment philosophy. Since this is the foundation, I included two books on this topic. The first is…
1. Margin of Safety by Seth Klarman
Seth Klarman is a successful investor and founder of the Baupost Group. In 1991, Klarman published the book Margin of Safety. It covers all the investment philosophy that one needs to grasp the concept of intelligent investing.
I put this book on the list instead of The Intelligent Investor by Benjamin Graham since I find it to be an easier and more modern read, which is helpful to investing beginners.
Unfortunately, Klarman decided to print the book in a very small number, which resulted in a current price of around $2000. Fortunately, you can easily find a PDF on the internet.
2. The Most Important Thing by Howard Marks
The second book on this list covering investment philosophy is Howard Marks’ The Most Important Thing. Initially wanting to write about the most important thing in investing, Marks quickly realized there isn’t the one thing. So, he decided to take the 20 most important things instead of writing a book that lacked important information. I’m glad he did.
After understanding the general philosophy of intelligent investing, you must learn about human nature and psychological errors. I’ve read many books on this topic, but my favorite remains the first book I picked up…
3. Thinking, Fast and Slow by Daniel Kahneman
Thinking, Fast and Slow is written by Nobel Prize winner Daniel Kahneman and the bible of understanding how the human mind works.
He starts by explaining how two systems work in our heads and how they cooperate or fail to do so…
He discusses all critical heuristics, biases, and errors of thinking; after reading this book, you’ll have a substantial behavioral edge over most other investors.
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Third, valuation! Understanding how you should invest and being “mentally stable” enough doesn’t get you anywhere when you can’t figure out a company’s fair value. No matter how you twist and turn it, you need to learn accounting and how to value companies. The best book on the topic is…
4. Valuation by McKinsey and Company
This book is not easy, but it is the most comprehensive book out there. If you have problems reading it the first time, starting with a shorter book on accounting for an introduction can make sense.
The last book is a sort of magic bullet that’ll equip you with 99 years of experience and a bunch of mental models to help you with all the topics mentioned above…
5. Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger
This book is a compilation of speeches and essays written by Charlie Munger. Charlie Munger is the best friend of Warren Buffett and his partner at Berkshire Hathaway. He is known for his wit and extensive knowledge on a variety of subjects.
In this book, you’ll find elements of all the topics we discussed before.
The Overall List:
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