Stockholm (Ekonamik) – It’s official: the summer reading season is here. Because it is popular to recommend books for the summer holiday, I thought I would join Glenn and Filipe and put together my favourite reading list.
I am interested in investing (mostly Warren Buffett-inspired investing) so most of the books I read are on this topic. As a member of the HedgeNordic team, I often get the opportunity to meet and talk to hedge fund managers in the Nordics and, more often than not, I ask them about their favourite books on investing. Some of the books in the list below, therefore, have been recommended by Nordic hedge fund managers. I never took the time to actually read some of the recommended books, so there is a whole separate list of books I am hoping to get to during the summer. Admittedly, some of the books are not what one would call light summer reading; some of them are quite dense and do require some concentration.
My favourite reading list is full of books about investing:
“Buffett: The Making of an American Capitalist” by Roger Lowenstein – This is an excellent biography of Warren Buffett, perhaps the most well-known and successful investor of the modern era. A Norwegian fund manager recommended this book earlier this year; it was then that I realized exchanging favourite book lists with hedge fund managers was a good idea. For those looking for a book on investing based on Warren Buffett’s principles, look elsewhere. But after reading this book, all the other books on Buffett seem vague and dull.
“The Most Important Thing: Uncommon Sense for the Thoughtful Investor” by Howard Marks – Howard Marks is a value investor who founded Oaktree Capital Management. He wrote this book to lay out his investment philosophy in a manner that is beneficial to an average investor like me and many others. From what I remember, this is a book on how to think about investing instead of how to implement his investment philosophy in practice. The book covers topics such as second-level thinking, market cycles, luck, contrarianism, risk, among others.
“You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits” by Joel Greenblatt – This is a book about special situations such as spin-offs, rights offerings, merger arbitrage, to name just a few. The appeal of this book lies in the case studies presented by Joel Greenblatt. It is a practical book on investing.
“The Little Book That Builds Wealth: The Knockout Formula for Finding Great Investments” by Pat Dorsey – This is a concise book about moats and structural barriers allowing a business to fend off competition. An excellent book for anyone looking to understand the concept of moats.
“The Dhandho Investor: The Low-Risk Value Method to High Returns” by Mohnish Pabrai – Written by value investor Mohnish Pabrai, the essence of this book can be boiled down to “Heads I win…tails I don’t lose much.” One important message of this book is that high returns are not necessarily associated with high-risk opportunities. This book discusses many useful concepts for investors (margin of safety, risk-reward, portfolio concentration, conviction, etc.)
“Good Stocks Cheap: Value Investing with Confidence for a Lifetime of Stock Market Outperformance” by Kenneth Jeffrey Marshall – Kenneth Jeffrey Marshall is a former teacher of mine who teaches two value investing courses at the Stockholm School of Economics. While this book is not necessarily a typical summer beach read, the book is a great step-by-step guide for both newbie value investors as well as experienced investors on how to analyse a business and how to invest wisely using a value-oriented approach. I would even go as far as to say that this book is my investing Bible.
My To-Read List:
Then there are several books I know I must read during this summer. One of them is “The Intelligent Investor” by Benjamin Graham. This book is considered the stock market bible or value investing bible ever since the book’s original publication in 1949. I should feel embarrassed to admit that I have not read the entire book yet, but I don’t (maybe a little bit). Many other books and blogs thoroughly describe the concepts of Mr. Market and margin of safety, concepts first coined by Ben Graham.
“The Intelligent Investor: The Definitive Book on Value Investing” by Benjamin Graham
“Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger” by Charles T. Munger, Peter E. Kaufman
“The Joys of Compounding: The Passionate Pursuit of Lifelong Learning” by Gautam Baid