Top 10 books about stock market trading
Stock market trading is a vast topic. There are dozens of strategies, hundreds of products, various asset classes, numerous criteria to choose funds or stock… A beginner trader will often be overwhelmed by the sheer amount of information and the sometimes contradictory methods available.
So, how do you make sense of it all? How can you set off on the right foot? Where will you find the right information, from competent advisors? The best place is in books written by trained professionals whose experience and results have proven their worth. They are the best people to get “advice” from. The best among them will have a proven “track record”, a summary of their performance over time, which shows they are a cut above the rest. And have consistently been a cut above the rest over the long term.
Here are ten such books that will teach you loads and save you a lot of money!
The Intelligent Investor (Benjamin Graham)
You know about Warren Buffett, right? Then you really should learn all about his mentor, Benjamin Graham. Warren Buffett admits Benjamin Graham was his main source of inspiration and taught him almost everything he knows. “The Intelligent Investor” is pretty much the value investing bible. Value investing consists of pinpointing high-value companies whose stock is currently selling at discounted rates, but that will, in the long term, reach their true value. In this book, Benjamin Graham gives readers the run down on stock picking. But there’s far more to the book than just this. He also explains how to develop a healthy, profitable financial market strategy, and identifies different investor types and their relative strategies. To top it all off, he analyses and compares various companies, highlighting what the savvy investor needs to research before making any investment decision.
Reminiscences of a Stock operator (Edwin Lefèvre)
If you ask a professional investor what their favourite finance book is, the likely answer will be “Reminiscences of a Stock Operator”. Published in 1923, this original book depicts the trials and tribulations of securities trader Jesse Livermore. It isn’t a technical book about finance and trading strategies; it is a fictionalized account of the psychology and life experiences that enabled Livermore to make and lose his fortune on the financial markets several times over. Entertaining, truthful and straight-talking, traders and investors will undoubtedly see themselves in Livermore.
One Up on Wall Street (Peter Lynch)
Any self-respecting investor has heard of and read the offerings of Peter Lynch. Why so? Because in the 1970s and 1980s he was the manager of one of the world’s largest investment funds, the spectacularly-performing Fidelity Magellan Fund. The Fidelity Magellan Fund realised profits for 13 consecutive years with a yearly average of 30%, compared to the S&P500’s 10% over the same period. As a result, he is widely considered to be one of the best portfolio managers in the world. In One Up on Wall Street, Lynch details the basics and methods he used time and time again to grow his fund. It therefore contains very concrete advice. Lynch insists, in particular, that individual investors can beat the experts if they know where to look.
Beating the Street (Peter Lynch)
In this common sense book, Peter Lynch elaborates on his concept that individual investors can beat the experts. He provides specific examples to demonstrate how individual investors can use his knowledge and experience to their own profit. Moreover, he dedicates several chapters to his work at Fidelity when he ran the famed Magellan Fund. This enables the reader to grasp the logic behind Lynch’s investment decisions and understand exactly how this man was able to milk the financial markets so well year upon year.
Common Stocks and Uncommon Profits (Philip Fisher)
A lesser-known name than Lynch or Graham, Fisher is nevertheless thought of as a pioneer in the world of stock trading. With a career spanning the 20th century, Fisher had a major influence on numerous famous investors, including Warren Buffett. This book lays out his investment philosophy and the crucial characteristics to consider pre-purchase. The advice contained in it is uber-precise – what to buy, when, and also when to sell. He indicates a bullet list of essentials to give the investor the best possible chance of hitting gold. This book is a classic that remains as valuable as ever for investors looking to strengthen their stock-picking capabilities.
The Market Wizards (Jack Schwager)
Unlike the other authors on this list, Jack Schwager doesn’t write about his own trading strategies, detailing instead those adopted by other financiers. He has selected a number of big names in American trading and describes the techniques that got them their reputation. The Market Wizards is therefore a condensed catalogue of the varied methods which contributed to the success of over a dozen professionals in areas ranging from futures and exchange markets to stocks and also trading psychology. Jack Schwager, himself a trader, interviews these exemplary traders and goes into great detail regarding the elements of their success. He also recounts what methods these market “magicians” use and the trading guidelines each one adheres to, adding his own personal advice for beginner traders to the mix.
A Gift to My Children: A Father's Lessons for Life and Investing (Jim Rogers)
If you have never heard of him, Jim Rogers co-founded the phenomenally successful Quantum Fund along with George Soros. He retired at the age of 37 ans. Rogers has penned several books, and in A Gift to My Children, we are privy to his guide to both life and investment. It is therefore an excellent overview in which he writes about philosophy, history, travel, China and his successes and failures… It is also an exceptionally original read, making it a delightful change from the norm that gives the reader space to breath and take a perspective-giving step back from pure, hardcore investing.
Stocks for the Long Run (Jeremy J. Siegel)
If you’re looking for concrete advice, this is the book for you. Jeremy Siegel is a finance lecturer at the prestigious Wharton School and the author of numerous articles written in collaboration with finance TV channels and newspapers such as The Wall Street Journal, Barron’s and The Financial Times. This book is a fabulous gateway to long-term stock market investment. In it, he provides the most detailed summary of historic trends, helping the reader build a portfolio that will prove healthy and profitable over the long term. Various chapters deal with stock performance, history's verdict, the impact of the economic environment on stock, short-term market fluctuations… It basically contains everything you need to build your own successful stock portfolio.
The Most Important Thing (Howard Marks)
This book is a collection of the memos sent by Howard Marks, the chairman and cofounder of Oaktree Capital Management (almost 75 billion dollars under management), to his clients, detailing his vision of the financial markets. It is the first time they have been published in a single volume and this edition offers the reader a description of the investment philosophy he crafted over the course of his entire investment career. The bonus: the comments, insights, and counterpoints of four renowned investors and investment educators: Christopher C. Davis (Davis Funds), Joel Greenblatt (Gotham Capital), Paul Johnson (Nicusa Capital) and Seth A. Klarman (Baupost Group). These experts lend insight into such concepts as second-order thinking (which he calls second-level thinking), the price/value relationship, patient opportunism, and defensive investing.
The Alchemy of Finance (Georges Soros)
George Soros made a fortune competing with the British pound by building a huge short position in pounds sterling, and he is unquestionably one of the most powerful and profitable investors in the world today. He is President of Soros Fund Management and Chief Investment Advisor to the Quantum Fund, the annual performance of which (35%) pummels other fund managers into the dust! In this edition, Soros describes a new paradigm for the "theory of reflexivity". He presents a rather theoretical account and history of the current financial system, but also of world debt, the banking system, the credit cycle, regulation… Theoretical, yes, but which makes it possible to grasp the working mechanisms of today’s financial markets. “The Alchemy of Finance” is much more than a simple guide to the inner workings of the financial markets. It gives an inside look into the innovative investment practices Soros used to become the most successful money manager of our time, along with his views of the world and world order.
Last Update on 27/05/19