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My favourite investment books
Wednesday, 8 August 2007
I've been getting a few emails recently asking which investment books I would recommend. Obviously there's a vast array of good books out there on this topic and I haven't read them all. But these are the ones I've found most useful when studying this topic.
The Intelligent Investor by Benjamin Graham
We might as well start with the big one. This has been called the best book on investing ever written by no less a person than Warren Buffett. Considering Mr Buffett is the most successful investor in history, that's no small endorsement. And if you read it you'll see why.
A word of warning though, this book is a little dry. Of course all money books have that disadvantage, but this is particularly one you'll need to take slowly. Just get through it one chapter at a time. It will teach you all sorts of important concepts, such as dollar-cost-averaging, how to view the ups-and-downs of the market, and how to figure out if something's a good investment. It focuses mainly on stocks, but you can take the lessons and apply them to pretty much any investment - from real-estate to rare coins.
Making Money Made Simple by Noel Whittaker
This gem of a book unfortunately isn't that widely available outside the Southern Hemisphere, but it's worth tracking down a copy if you can. It's the best introduction to personal finance I've ever read and was a bit of a sensation in Australia 15 years ago. Mr Whittaker does an excellent job of explaining how to organise your finances and make sure you're on top of your money rather than it being on top of you. It's a book for beginners, but we all have to start somewhere.
I credit reading this book when I was 17 to the good financial position I'm in today. It truly shows that it's not how much you earn, but what you do with that money that counts. If you're going to start a journey into financial competence, you could do a lot worse than starting here.
One up on Wall Street by Peter Lynch
This is a good complement to The Intelligent Investor. Mr Lynch is a very successful money manager who's been kind enough to publish a guide on investment for us mere mortals. You'll learn all sorts of important lessons on not just investment but general business from this book. One thing he really makes clear is to work with what you understand and don't let yourself become caught up in something just because it sounds impressive.
The Great Crash by John Kenneth Galbraith
This book is not only a rollicking good story and history lesson, it's also an investment education must. Mr Galbraith follows the stock market crash of 1929 from its build up until the ultimate fall. Reading it, you'll find many of the events and how they get reported in the media of the time vaguely familiar. It's an eye-opening lesson on how little things have changed in the past 80 years.
The Fortune Sellers by William A Sherden
This is a book that will change the way you view the world. It's not only useful for investment, but also understanding society. Mr Sherden takes a look at the multi-billion dollar prediction industry - from stock pickers to economists to meteorologists - and tears it apart. His analysis is as entertaining as it is methodical.
Some kind of introductory text to economics would also be very useful. As I studied economics at university, I've never really read a book on that topic that wasn't a hard-core textbook and probably not suitable for my audience. However, I do recommend browsing your local bookshop for an introduction to the subject that appeals.
So there they are, my favourite investment books. I hope they help you get on top of your finances. Happy reading!
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