5 Investment Books You Must Read

Investment books offer valuable advice to investors. They come in varying quality and offer different types of advice. Some have been around for decades, while others, are relatively new.  This article compiled a list of five noteworthy investment books that every investor should read. Since it's difficult to quantify which book is more valuable then others, the list has been arranged in alphabetical order (by author).

  1. "Use the News" by Maria Bartiromo is the most recently published entry on the list. This book shows you how to analyze news so that you can separate substantial information from hype and misleading claims. As the recent economic downturn has demonstrated, news is not always a reliable indicator of the state of economy, especially when it comes to recognizing potential long turn problems. This book is becoming more and more valuable, as our news media continues their sensationalistic media trends.
  2. "Common Stocks and Uncommon Profits" by Phillip Fisher was originally published in 1958 and is one of the pioneering works in growth investing. Fisher believed that if you invest in small companies that demonstrate steady, healthy growth, you would be able to profit off it for decades to come. The book looks at the qualities you should look for in a company in order to find worthwhile investment opportunities. It suggested asking employees, customers, vendors and competitors certain questions in order to get more accurate results. The book also warns you about common investor mistakes.
  3. "The Intelligent Investor" by Benjamen Graham was originally published in 1949, it has since went through multiple reprintings, selling millions of copies. The first half of the book covers investment basics such as investing vs speculation, stocks vs bonds, inflation and the pros and cons of defensive and speculative spending. The second half of the book focuses on securities analysis, teaching investors how to analyse financial statements and per share earnings and assess management practices. Graham strongly believed that analyzing financial statements would help you predict long-term trends, and the book reflects that. While many examples have become dated over the years, the underlying principles discussed in the book remain as relevant as ever.
  4. "Beating the Streets" by Peter Lynch is one of the newer books on the list.  It suggests that you should avoid investing in the latest fads and focus on local successes. For example, you may want to invest in a successful local restaurant or a new manufacturer in your area. Backing the fads would bring short-term profit, but it will backfire on the long run, whereas smaller, local businesses are more likely to lend profits over an extended period of time. Lynch explains how to research the company you may consider investing in to see if it's current success is indicative of a long-term trend.
  5. "Financial Shenanigans" by Howard Schilit was originally published in 1993 and updated in 2002. The book teaches investors how to uncover potential fraud. The companies you may want to to invest in may not want to advertise their financial problems. They would do anything they can, be it data manipulation or unabashed deception, to present an appearance of financial vitality. If you invest in it, you will suffer financial loses when the fraud is exposed. Schilit teaches you how to analyse annual reports, financial statements and SEC filings in order to find out of something is amiss. The analysis is supported by  dozens of real-life examples.

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