It’s tempting to try to skim your way to investing chops, but to truly master the market takes a real investment of time. We asked a successful investor for a reading list — here are the five books he recommended to build your knowledge base and build your wealth:
Written in 1937, Napoleon Hill’s classic remains one of the most read and respected personal development books. The book focuses on the mindset and practices that allow successful people to reach their positions of power and wealth. The key takeaways are that you should chase what you desire and take failures as lessons and opportunities.
A favorite quote: “Before success comes in any man’s life, he is sure to meet with much temporary defeat, and, perhaps, some failure. When defeat overtakes a man, the easiest and most logical thing to do is to quit. That is exactly what the majority of men do. More than five hundred of the most successful men this country has ever known told the author their greatest success came just one step beyond the point at which defeat had overtaken them.”
Written in 2016, Quality Investing serves as an almanac of characteristics of investments that prove valuable over time, and the ones to avoid. The subheadline — “Owning the Best Companies for the Long Term” — offers a window into the strategy. This is a bible of solid, considered investing. It offers a roadmap for the investor committed to building wealth rather than chasing a quick payday.
A favorite quote: “To achieve sustained high returns on capital requires possessing features that protect returns from competition; namely, competitive advantages. Identifying what these competitive advantages are and understanding their sustainability is an essential part of the quality investment process.”
This book has been a guiding light for two generations of investors since it was first published in 1958. Philip A. Fisher writes succinctly about what makes a company valuable and how he sees value in the market as a whole. Warren Buffett has said that Fisher is one of his two biggest influences (the other being Benjamin Graham, the godfather of value investing). Fisher argues that an investor should find a handful of value stocks by doing lots of research and then hold them for years. His blueprint led to massive returns.
A favorite quote: “Most people, particularly if they feel sure there is no danger of their being quoted, like to talk about the field of work in which they are engaged and will talk rather freely about their competitors. Go to five companies in an industry, ask each of them intelligent questions about the points of strength and weakness of the other four, and nine times out of ten a surprisingly detailed and accurate picture of all five will emerge.”
After spending 21 years as a quantitative trader, Nassim Nicholas Taleb began to apply his unique analytical skills to the larger world, becoming a best-selling author and fascinating thinker. In Skin in the Game, he explains how the ideal of having skin in the game can reshape the way we live in society, succeed in business and so much more. As he writes: ““Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them.”
A favorite quote: “The difference between successful people and really successful people is that really successful people say no to almost everything.”
Michael Lewis is the most successful narrative journalist on the planet for a reason — with Moneyball, Liar’s Poker, and The Big Short, he manages to deliver wonky insight into markets and ideas with the tension and readability of a pulp thriller. The Big Short takes the reader inside the minds of a handful of the Wall Street insiders and outsiders who thought differently enough to see the coming Subprime Mortgage Collapse of 2008. The book is both a crash course in investing and a cautionary tale about greed and groupthink. It’s also nearly impossible to put down.
A favorite quote: “What are the odds that people will make smart decisions about money if they don't need to make smart decisions — if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they're still all wrong.”
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The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.