I'm dedicating this post to one of my readers who recently contacted me and asked for some more information about investing and some book recommendations. There are a ton of books out there that talk about investing in the stock market. Here are 3 books which I've read and thought were extremely helpful. I learned more about how to invest and the way it works by browsing the internet. But the real valuable information I got from these books. Let's have a look.
1. The Intelligent Investor by Benjamin Graham
"By far the best book on investing ever written" - Warren Buffett.
This book clearly prescribes the proper framework and emotional discipline which is needed if you want to become a value investor. It honestly is one of the best books out there and I believe that it can show you the way how to achieve outstanding results. The knowledge from this book combined with applying the proper effort and intellect to your investments will give you a huge head start on investing.
2. The Portable MBA in Finance And Accounting
This book is also on my list in the "Book of The Month" section. This is a typical accounting book and talks more about financial statements and cashflow. Why is this important? Because when you are choosing your companies to invest in you will want to look at their SEC reports (10-K, 10-Q, 8-K, etc.) to determine if investing in that company is a wise choice. You will have to understand how to read financial statements and cash flow if you want these reports to show you if this would be a wise investment or not. Why? Because if you can understand this you can see when a company is loosing money, what their risk factors are, why they are cutting back on dividend payouts etc. These are some of the things which could indicate something bad is going to happen before it actually happens.
3. The Essays of Warren Buffett by Lawrence A. Cunningham
Another valuable book that has combined Buffett's essays and speeches about the market. Warren talks about corporate governance, investment alternatives, valuation and much more. Reading this book will help you look into the right direction. This book contains invaluable information and is a must read for people who are trying to understand how to have a healthy approach to investing.
These books might not help you figure out how and where you can start investing right this second, but they will help you prevent from making big mistakes in the future if you read them thoroughly. You have to start somewhere and that is by finding out how the process works, which you can find anywhere online. Then before you take action, you educate yourself. That is where these books come in. In one of my next posts I will be listing and comparing all financial service companies which provide an online discount brokerage service for self-directed investors. You will need to open an account at one of these companies if you decide to become a self-directed investor. But first educate yourself. That's the key to possible great results.