Recommend Books Part Two (Essential Readings)

Leading up to the third anniversary of my investing journey, I think an update on recommended study materials is appropriate.

I am still a firm believer of self studying. Investing is not just financial rewarding but intellectually stimulating-- a perpetual treasure hunt.

1. The 5 Rules to Successful Stock Investing
There is not a better book out there (afaik) that explains the financial statements using the simplest of examples: running a hot dog stand. If you know nothing about reading simple accounting stuff, get this book. It will probably take you half a month to finish half of this book.


2. The Intelligent Investor
The writing style and examples used in the text isn't contemporary, but even reading the summaries written by Jason Zweig (latest edition in 2006 covered the melt down in tech meltdown in 2000) will help prevent losses.

As a value investor, we should check the downside and risks instead of the upside-- losing money is often easier than winning.

3. One Up on Wall Street
While this book can serve as a wonderful introduction to investing, it appeals to investors with slight investing experience (such as myself) with little gems like market timing (or why it shouldn't bother you), portfolio management, story checking, etc. Peter Lynch's classification of companies into six different categories is popularly used in the investment circle.

You might be keen on "Beating the Street" by the same author as well.

4. Financial Shenanigans
There are a million and one way for management to commit frauds. One should do one's best to check the numbers... This book will help.

5. You Can be a Stock Market Genius
While it lacks a serious title, this book changes the way I look at unconventional investment opportunities. If you are a fan of the Buffett Partnership, its investments were classified into three categories: Generals, Controls and Workouts. General refers to companies which are undervalued by the market, and after buying enough shares available to control the company, they become part of the Controls group.

The last section, called Workouts, refer to investments which does not move with the general market direction. These are special situations (as termed in book #2) which no doubt lower investment portfolio during a bull market, but greatly provide relief during a bear one. This book deals with Workouts, but even if your portfolio consist mostly of it, it will provide highly satisfying returns.

The same author wrote this book call "The Little Book that still Beats the Market." Another highly entertaining book as well.

6. The Dhando Investor
If you are determined to be a value investor, this book could be priceless. What is the difference between risk and uncertainty?

That is all. You will spend an approximate six months to a year reading all of the above, but re-reading them is not only necessary, but entertaining.