Top 10 Best Investing Books Every Investor Should Read

When it comes to investing, Rule #1 investors take a similar approach to billionaire Warren Buffett’s views. It’s only fitting that some of my favorite investing books are also some of Buffett’s as well. Buffett can power through 500 pages a day and says that reading is the most important part of his job.

As investors, we’re in the business of gathering as much knowledge as we can. Here’s a list of 10 of the best investing books out there, including some of Warren Buffett’s favorites as well.

1) “The Intelligent Investor” by Ben Graham

the-intelligent-investor-by-benjamin-graham

This 1949 book focused on Graham’s strategy of loss minimization over profit maximization. This is the basic foundation of a Rule #1 education.  Buffett wrote a preface and appendix to the 2006 edition.

Description:

This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions…

The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949. You can get it here.

2) “Security Analysis” by Ben Graham and David Dodd

security-analysis-by-benjamin-graham

This is the foundation textbook of value investing.  Its a tough read but if you want to drill down on the numbers, this is your huckleberry.

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“A road map for investing that I have now been following for 57 years.” –From the Foreword by Warren E. Buffett

First published in 1934, Security Analysis is one of the most influential financial books ever written. Selling more than one million copies through five editions, it has provided generations of investors with the timeless value investing philosophy and techniques of Benjamin Graham and David L. Dodd. Get it here.

3) “Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger” by Peter D. Kaufman

poor-charlies-almanac-charles-munger

This book is a hot mess but its packed full of Munger’s ideas on investing.

Description:

Poor Charlie’s Almanack contains the wit and wisdom of Charlie Munger: his talks, lectures and public commentary. And, it has been written and compiled with both Charlie Munger and Warren Buffett’s encouragement and cooperation. So pull up your favorite reading chair and enjoy the unique humor, wit and insight that Charlie Munger brings to the world of business, investing and life itself. Get it here.

I wrote 2-NYT Best-Sellers called Rule #1 and Payback TimeYou can get the best parts of them here for free.

4) “Common Stocks and Uncommon Profits” by Philip Fisher

common-stocks-and-uncommon-profits-phillip-fisher

About evaluating a company’s management team.  Fisher is one of the few guys Buffett points to as an influence on his investing strategy.

Description:

Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies, introduced almost forty years ago, are not only studied and applied by today’s financiers and investors, but are also regarded by many as gospel. This book is invaluable reading and has been since it was first published in 1958. Get it here.

5) “The Essays of Warren Buffett” by Lawrence Cunningham

the-essays-of-warren-buffettThese are key letters from Buffett to his partnership and to Berkshire shareholders.  This is seminal wit and wisdom.

Description:

The year 2015 marks the fiftieth anniversary of Berkshire Hathaway under Warren Buffett’s leadership, a milestone worth commemorating. The tenure sets a record for chief executive not only in duration but in value creation and philosophizing.

As the book Buffett autographs most, its popularity and longevity attest to the widespread appetite for this unique compilation of Buffett’s thoughts that is at once comprehensive, non-repetitive, and digestible. New and experienced readers alike will gain an invaluable informal education by perusing this classic arrangement of Warren’s best writings. Get it here.

6) “Business Adventures” by John Brooks

business-adventures-john-brooksThis is the book that Buffett sent to Bill Gates when he asked Warren what his favorite book is.  Twelve tales from the world of business that point to how critical management is.

Description:

What do the $350 million Ford Motor Company disaster known as the Edsel, the fast and incredible rise of Xerox, and the unbelievable scandals at General Electric and Texas Gulf Sulphur have in common? Each is an example of how an iconic company was defined by a particular moment of fame or notoriety; these notable and fascinating accounts are as relevant today to understanding the intricacies of corporate life as they were when the events happened. Get it here.

7) “The Dhando Investor” by Mohnish Pabrai

the-dhando-investor-mohnish-pabraiOne of the best Ruler type investors show how to start with nothing and become wealthy using principles of business.

Description:

A comprehensive value investing framework for the individual investor.

In a straightforward and accessible manner, The Dhandho Investor lays out the powerful framework of value investing. Written with the intelligent individual investor in mind, this comprehensive guide distills the Dhandho capital allocation framework of the business savvy Patels from India and presents how they can be applied successfully to the stock market. The Dhandho method expands on the groundbreaking principles of value investing expounded by Benjamin Graham, Warren Buffett, and Charlie Munger. Get it here.

8) “The Super-Investors of Graham-and-Doddsville” by Warren Buffett

the-superinvestors-of-graham-and-doddsvile-warren-buffettBuffett’s lecture to Columbia University MBA students, if you google it you can find a pdf of it for free. This is a key work about the foolishness of Modern Portfolio Management’s claim that no one beats the market except by luck.

9) “The Outsiders” by William Thorndike

the-outsiders-william-throndikeStunning portraits of how a great CEO allocates capital to maximize shareholder return.

Description:

What makes a successful CEO? Most people call to mind a familiar definition: “a seasoned manager with deep industry expertise.” Others might point to the qualities of today’s so-called celebrity CEOs—charisma, virtuoso communication skills, and a confident management style. But what really matters when you run an organization? What is the hallmark of exceptional CEO performance? Quite simply, it is the returns for the shareholders of that company over the long term.

In this refreshing, counterintuitive book, author Will Thorndike brings to bear the analytical wisdom of a successful career in investing, closely evaluating the performance of companies and their leaders. You will meet eight individualistic CEOs whose firms’ average returns outperformed the S&P 500 by a factor of twenty. Get it here.

10) “Antifragile” by Nassim Talib

antifragile-nassim-talebThis is another ‘stream of consciousness’ opus from Talib that spells out how fragility is at the heart of investment failure and anti-fragile strategies are the key to long-term success.

Description:

Nassim Nicholas Taleb, the bestselling author of The Black Swan and one of the foremost thinkers of our time, reveals how to thrive in an uncertain world.

Just as human bones get stronger when subjected to stress and tension, and rumors or riots intensify when someone tries to repress them, many things in life benefit from stress, disorder, volatility, and turmoil. What Taleb has identified and calls “antifragile” is that category of things that not only gain from chaos but need it in order to survive and flourish. Get it here.

Bonus: “Rule #1” by Phil Town

rule-1-phil-townThis book combines modern tools with Buffett-style investing and takes you step by step through the analysis process.  A must-read for Rulers.

Description:

Phil Town is now a very wealthy man, but he wasn’t always. In fact, he was living on a salary of $4000 a year when some well-timed advice launched him down a highway of investing self-education that revealed what the true “rules” are and how to make them work in one’s favor. Chief among them, of course, is “rule #1”: “don’t lose money.” Other rules are: don’t diversify…think like an owner, not an investor … never, ever be seduced into thinking the market is efficient. Town also believes strongly in “betting on the jockey,” putting your faith in managers who’ve proven their financial mettle. Get it here.

Conclusion

Did I miss any of your favorites? Leave them in the comments and I’ll add them to my reading list.

If you’re not ready to buy Rule #1 just yet you can get some of the most valuable parts of both of my books for free by clicking the button below.

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Featured Photo: Asa Mathat and Fortune Media under a creative commons liscence.

Book cover photos and descriptions from Amazon

About Phil Town – Phil Town is an investment advisor, hedge fund manager, two-time NY Times best-selling author, ex-Grand Canyon river guide and a former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence. You can follow him on google+, facebook, and twitter.

  • scott tofil

    Thinking, Fast and Slow by Daniel Kahneman as a prelulde to Talib’s works.

  • Alfonso Bravo Michi

    I think it’s a very good list. I still haven’t read half of it. I understand why Phil (Mr. Town) has not included his Rule # 1 book but IMHO it should be high on this list.

    I would also like to to recommend “Value and common sense”. You can find it free at Prof. Pablo Fernández website at IESE. More academic maybe but a great read. Also compares other valuation methods (appart from FCF discount) and why they are wrong.

  • S. Bediako-Asante

    Phil, never forget Robert Kiyosaki’s “Rich Dad, Poor Dad”, and the “Cashflow Quadrant”.

  • Mark Hadnett

    A man for all Markets, Edward Thorpe, Great book

  • Kritesh Abhishek

    Great Post Phil! I loved the list :) But I think you should also include Peter Lynch’s ‘One Up On The Wall Street On the List’. What say?
    I have also written a similar blog post. Here it goes: http://www.tradebrains.in/10-must-read-books-for-stock-market-investors/

  • Dino Layton

    You cannot leave off “The Education of a Value Investor.” This book helps to form the foundation of the Rule 1spirit of integrity.

  • Bob Nilsen

    I ordered The Dhando Investor while I was at the
    Workshop. Re-read both of Phil’s books, read Mohnish’s book and just finished
    Guy Spier’s – The Education of a Value Investor: My Transformative Quest for
    Wealth, Wisdom, and Enlightenment. Working my way through Ben Graham’s The
    Intelligent Investor.

  • Chris Houghton

    “How to Read a Financial Statement” by John A. Tracy and Tage Tracy (8th Edition) has a lot of good information on what the numbers mean and how they inter-relate without being too dense.

  • I read the Dhandho Investor after seeing Phil recommend it. I was hooked from the first paragraph. It has a lot of insight to investing. I wrote a small blog on it and tried to view arbitrage in my own business. PS I am not as great a blogger but I love learning about investing. I attended one of Phil seminars I liked it. Link to my blog. https://www.exittechnologies.com/arbitrage-profiting-market-pricing-discrepancies/

  • Michael Sawick

    Antifragile really made me look at just about everything from a different perspective. The book itself is written in a very antifragile style. In a world which feels ever more fragile, the information delivered is timely and actionable. Thanks Phil, not sure I would have picked this one up without you including it on your list.

  • John Waller

    Of the dozens that I have read, the three that I use the most are “A Random Walk Down Wall Street”, “Rule #1” and “The Future for Investors”.

  • Great list and I have read/re-read them all. I have an extensive reading list, If only I could read faster.

    What works for you & why? Another book which can be applied to many fields is a checklist.
    The Checklist Manifesto: How to Get Things Right by Atul Gawande
    http://www.amazon.com/Checklist-Manifesto-How-Things-Right/dp/0312430000/ref=sr_1_1?s=books&ie=UTF8&qid=1455304056&sr=1-1&keywords=checklist+manifesto

    Cheers

  • Oblidosh

    One of my favourites, just for the entertainment value, is The Big Short – by Michael Lewis. It’s is also a movie now and a pretty descent one at that.

  • alyce

    Does anyone know what you should do if you are still invested in Zinc at this point? Phil’s class never covered what to do if you are still in it at this late stage in the process. I wish Phil would educate us on this. I know several people who has not had the class but went to the 3 day event and invested in Zinc based on the event. They are more of a newbie than myself and don’t know what to do at this point.

  • Andy

    Awesome list. Thanks Phil. I loved reading The Snowball: Warren Buffett and the Business of Life too

  • Christian
    • Jon M.

      Selling. He had close to 7 million shares at one point and now only 2.5.