The Best Investment Books of All Time

Investment Analysis Clubs Saul’s Investing Discussions
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I was asked the other day for advice on the best investment books for getting a young college age person interested in investing and personal finance.

As I went back through the usual list, it was another revelation of how there has really not been a seminal investment book written in 2 decades or more.

Tell me, how valuable is the usual list in the modern world of quants, programmatic trading, massive IPO’s, SaaS economies and IOT/AI, etc.

Should we turn to these classics?:

https://vintagevalueinvesting.com/14-recommended-investing-b…

Dunno…think Warren Buffet has helped your returns these past several years? Read another one of his essays? Maybe Bogle one’s mind just to index? How about go back for advice from the 1950’s from Graham…I am sure he knew what modern investing would be like. Maybe we should go back to 1923 with Edwin??? heck why not the 1840’s with McKay? You think Peter Lynch from the 1970’s could one up this new wall street? Maybe Philip Fisher could see the value in Saas from the 1950’s??

I think these “classics” are so commonly tossed around as “must reads” almost with no real sense of how little value they provide us today.

What is quite interesting IMO, is that there really hasn’t been a “classic” written in nearly 2 decades.

So Saul…get to work…you are partially there with your knowledge-base…your legacy awaits you! :joy:

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Duma,

I think from all the books you mentioned, Philip Fisher’s Common Stocks and Uncommon Profits is the most valuable I have personally read. I remember browsing through it again last year and in many parts, it reminded me of the Saul-method. His process of scuttlebutting is basically what we are doing here on this board in my opinion, except that we don’t have to drive around to companies’ offices – we can comfortably browse the internet to get all the information we need.

Is it the best book to get someone interested in investing? I would doubt it. In my case, I remember it was – looking back – an extremely average book that got me into stock investing. I would even go so far as to say it was quite stupid in terms of the investing advice given. It was from a German author and called “Investment Punk”. Even the title suggests that it wasn’t the ultimate investing guide – and it wasn’t. Trying to recollect my memories about the book today, which is a bit hard, I remember the author raving about his road trips through Europe in his Porsche, paying his way through speeding tickets with no care in the world. He was slashing people for buying homes in rural areas with debt, criticizing the 9 to 5 lifestyle in the “hamster wheel”, and bragging about his emerging real estate empire. In the meantime, he also talked about stocks: price earnings, price book ratios, and dividends – the usual stuff. Quite frankly, the book didn’t teach me anything about what I do today as an investor. And I have never recommended it to anyone. Yet, I still remember lying at the side of a public swimming pool on a hot summer day, just turned twenty, reading the book cover to cover while kids were screaming and splashing water around me.

Something in the book got to me, and it wasn’t profound investment knowledge. Maybe it was the lure of riches, but I’m not sure it was in my case. I don’t even care for cars – never owned one in my life and I have no urge to ever own one, to be honest. What caught my young mind’s attention was this: Achieving personal freedom and independence. This is big. That’s how you sell investing to a young adult.

What I’m trying to say is that to get (young) people excited about investing you have to go for emotion, not facts. Real quality – the Buffets, Grahams, Fishers, Lynches, Gardners, etc – can come later. Which book can achieve that? I don’t know. For me, the “Investment Punk” worked.

Having said that, I totally agree that Saul should write a book about his investing style and history. Go Saul! :slight_smile:

Best
Niki

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Having said that, I totally agree that Saul should write a book about his investing style and history. Go Saul! :slight_smile:

Please don’t(and I think he has said before he has no wish to do so, has written enough in his lifetime)as sure his time is limited alone just with us lot. Also mentioned he is not getting any younger plus on a personal level, don’t think I want everyone and his dog to discover the Motley Fool treasure which we have for ourselves. Can’t speak for Saul but its a lot of work just to keep in touch with all our Companies, let alone have to monitor this board, constantly explain,reply and do extensive deep dives, commentaries plus monthly reports.

One book which is my all time favorite and learnt extensively from is “Reminiscences of a Stock Operator” by Edwin Lefevre. Anyway, if Saul wishes to write an investment book/guide, sure he will do so. Just call it “The Bible”. :-))

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Saul has already written a book. It’s all here for everyone to read and appreciate and learn.

Saul’s Knowledge Base
Part 2
Part 3
And the vast majority of his posts.

Only thing lacking, it’s not in book form :slight_smile:

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Saul has written a number of books … they just don’t happen to be about investing. Check Amazon

https://www.amazon.com/Saul-H-Rosenthal/e/B001JS2I8Y?ref=sr_…

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I caution against thinking in the medium of “books” and how they teach you to make a fortune.

That is old thinking.

The medium being used here is internet and world wide web, both in communicating thoughts and results as they happen, also archiving, editing, and sharing these thoughts later.

In this medium there exists a huge signal to noise ratio, but Saul distills the important and presents it like no other.

John

Who just bought a bigger wheelbarrow for all my money.
Thank you Saul et al.

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Many of the concepts discussed on here have already been discussed in books so there is nothing irrelevant about reading books nor is this site the be all end all of knowledge. For example there is a great deal of knowledge out there in regard to behavioral economics which is not discussed on this board but is a very relevant topic for an investor to be Better at spotting their irrational behavior.

Some of us take this more seriously than just piggybacking in SaaS picks of oracles during a SaaS boom for more sustainable long term abilities.

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Per TMF, these are recommended in the following order:

Elementary School One Up on Wall Street, by Peter Lynch
Junior High Investment Fables, by Aswath Damodaran
High School The Intelligent Investor, by Benjamin Graham
University You Can Be a Stock Market Genius, by Joel Greenblatt
Grad School The Road to Serfdom, by F.A. Hayek

In addition, Jim Cramer well, is Jim Cramer and states something things a novice could take for perspective:

Rule 1: Bull’s make money, Bear’s make money, pigs get slaughtered
Rule 2: It’s okay to pay taxes on gains
Rule 3: Never buy a stock all at once and sell all at once
Rule 4: Buy broken stocks not broken companies
Rule 5: Always be diversified to manage risk
Rule 6: Nobody ever made money panicking

And lastly, some notable statements from Chris Ciovaccio
COMMON MISSTEPS IN MARKET ACTIVITY

  • Watching The Markets Too Closely
  • Watching Our Profit/Loss Too Closely
  • Checking Account Balances Hourly/Daily
  • Focusing on Forecasts
  • Watching Financial TV
  • Worrying About What Everyone Else Is Doing
  • Worrying About What Everyone Else Is Saying
  • Trying to Avoid Volatility
  • Always Being Fearful Of The Next Pullback
  • Always Being Fearful Of The Next Bear Market
  • Always Being Concerned About “If”
  • Always Being Concerned About “Could”
  • Short-Term Focus
  • Short-Term Fear
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Keynes, the brilliant economist once said that “in the long run we are all dead.” Very profound statement because economics is a great science (my undergrad major) but the problem with economics is that it is not always the inevitable direction that economists get wrong but the duration.

My first investment was Oracle in 1998 with $1000. It doubled to $2000. Yippee me! That was a lot for me then.

I then went on in the internet bubble to do far far far better, and as has been characteristic, ended up in the best of the best, such as Qualcomm and Rambus LEAPS. Never mind the downside, that is what happens to rookies.

But from the internet bubble, to the housing crash, to the “historic” crashes of late 2018, etc., SHOCKER!!! The market continues to grow! Why? Economies continue to grow, and new disruptive technologies increase efficiencies that because of the invisible hand are required to be purchases less one ends up like Sears.

I hear over and over again, the crash, the downfall, the correction, the “party”. The “party” has been going on since well before I was born, and more recently, it picked up again in 2003, with a nasty hangover in 2009, but the next morning, if one woke up at the bottom of the crash, one started partying again as soon as 2009.

Now, since 2009 (to be more recent) if one’s investment philosophy was to protect from the crash, one missed out on a simply enormous opportunity cost for not investing in the highest quality growth companies with CAP, TAM, founder run, who are remaking the world.

Sure, it will crash again, sometime. By then you might be dead however, as that is the long run.

So what is the long run? 2003 until today? 2009 until today? 2015 until today? I am sorry, but during all of these “long runs” one thing has remained constant, disruptive, high growth, founder run, companies with CAP have provided great returns while the rest of the market insulted them as being market “darlings”.

So what is the best book, how about follow those with the actual best results. Saul comes to mind. I created a very concise litany of rules that pretty much appear to be near 100% correlation to actual results. Did not take a book, and Saul did not require a book.

Your returns would have been hampered materially by following any of those books. Why is David Gardner not listed as one of the greatest books of all time with Rule Breakers? Because success is overlooked by cynicism.

Pet peeve of mine I guess. I had an argument with a professor of mine at Duke MBA about this. He insisted the market was random and could not be beat without inside information…blimey! Very smart man, probably will write a very great investment book.

Tinker

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In addition, Jim Cramer well, is Jim Cramer and states something things a novice could take for perspective:

Rule 1: Bull’s make money, Bear’s make money, pigs get slaughtered
Rule 2: It’s okay to pay taxes on gains
Rule 3: Never buy a stock all at once and sell all at once
Rule 4: Buy broken stocks not broken companies
Rule 5: Always be diversified to manage risk
Rule 6: Nobody ever made money panicking – BizKikr

As we were taught in Pirates of the Caribbean…sometimes rules are best considered as guidelines. At best.

Rob
Rule Breaker / Market Pass / Supernova Navigator Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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Saved that post of yours, Tinker.

I’ve fought my own “in the long run” perspectives many times. Looking at what could/should/would happen in a decade or more…potentially affecting a possible investment. LOL. Sometimes a long perspective is a hindrance!

And, as most on this board recognize, “official” or “academic” or even “popular” investing knowledge, insight and rules… can be total BS. Reminds me of my days at U of Michigan for my MBA. I planned to go Finance major, but after a couple courses I realized these guys were way off base (including the idea that all knowledge is already accounted for in the share price and that “risk and return” were closely connected). Fortunately, I had already been investing in the REAL WORLD for many years and could recognize their blindness. And to recognize that “none are so blind as those who choose not to see”.

Rob
Rule Breaker / Market Pass / Supernova Navigator Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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But from the internet bubble, to the housing crash, to the “historic” crashes of late 2018, etc., SHOCKER!!! The market continues to grow!

Not disagreeing, just a couple of caveats.

  1. Japanese stock market index is still below 1990 peak. Wonder how the US economy can avoid such a situation.
  2. It took the Nasdaq index 16 years to recapture its 2000 highs. And some Nasdaq darlings of 2000 like Cisco, QCOM still have not regained their 2000 peak. If you held these stocks in 2000-01 what would you have done? Looking back we know that holding these great companies long term would have been a terrible idea. But if you were in 2002 and these stocks were 80-90% down would you have sold? Or would you have sold earlier when they were 30-40% down. Crazy valuations for recent ipos like BYND, ZM and others seem very similar to late 1999. How do we spot if we are getting into a similar bubble like situation now?
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I would say that the only investment book that I have read (out of dozens) that come close to the MF/Saul mentality is Phil Fisher’s Common Stocks and Uncommon Profits. He is one of the only ones who argued that trying to find bargains (Graham school of thought) was stupid and you should find the type of companies that would be generating considerably more cash in the future. Most other investment books are quantitative and try to pigeonhole a valuation or a formula beyond which it’s “too risky” to buy assets, without any nuance with respect to other factors.

Some of his advice which bucks today’s conventional wisdom includes ignoring previous prices (Saul’s point about why worry if you pick up a stock at 25 or 26 and the false idea that just because a stock has already run up 100% it can’t run up any further), not overly diversifying (invest in your best ideas), and not following the crowd (nowadays that seems to be index funds)

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I would say that the only investment book that I have read (out of dozens) that come close to the MF/Saul mentality is Phil Fisher’s Common Stocks and Uncommon Profits.

I couldn’t begin to count the number of books I have read on the market but yes, Philip Fisher’s book stands out among as one of the influential ones to me. He had “10 don’ts for investors” with things like “Don’t quibble over 1/8ths.” “Don’t assume that just because a stock is priced high means it has discounted future growth.” “Don’t forget your Gilbert and Sullivan” (which was a section basically saying don’t pass on a stock because it has already gone up a lot). “Don’t buy into promotional companies” (which to this day could mean marijuana or biotech stocks). I’m sure many have read these lines of thoughts here on this board. So I never really looked at this board and the techniques used as some big secret that everybody must keep hidden. It’s recommended reading for anyone who cares to read one of the two most influential books according to Buffett. I read Philip Fisher’s other writings but did not really find them as insightful as Common Stocks and Uncommon Profits. But there was a pretty good summarization in one of them explaining the risk levels are higher the smaller and more speculative the company is. Every day that passes and MongoDB becomes a de facto standard for document databases, for example, some of that risk of being blindsided is removed.

However Philip Fisher did have one thing that I thought could have been improved on. His favorite holding period was forever. He held Texas Instruments and Motorola to his death after buying them in their early years, long after their growth curve was over. An improvement to me was actually based on T. Rowe Price’s methods. Stocks, like humans, have a lifecycle. You want to own them while they are young and growing. And sell them when they’re not. Price did not write a lot. But he did put a manuscript out published by Barron’s in the 1930s that is still available today. And he was one of the people profiled in “Money Masters” by John Train (along with Philip Fisher), which was a collection of interviews by renowned investors in the 1970s. The one thing about Price, and his manuscript out of the thirties, what happened in a decade then now occurs over the course of a couple years. Things just happen a lot faster now.

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However Philip Fisher did have one thing that I thought could have been improved on. His favorite holding period was forever. He held Texas Instruments and Motorola to his death after buying them in their early years, long after their growth curve was over. An improvement to me was actually based on T. Rowe Price’s methods. Stocks, like humans, have a lifecycle. You want to own them while they are young and growing. And sell them when they’re not. – 12x

THAT is against “Foolish philosophy”. And the Fool just doesn’t get it. I don’t understand why the Fool doesn’t see that, never will. I think one “explanation” is that your old company “may” develop a new business idea to drive growth. I label that “hope” and that’s a lousy reason to own a company.

And that’s why we need to think for ourselves, eh?

Rob
Rule Breaker / Market Pass / Supernova Navigator Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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How to know when it is a bubble, or when to sell? I have been over that - heck, literally multiple dozens of times over the years always refining. On the Tinker forum just did some calculations as to bubble or no bubble. The results were quite convincing.

I did not use Zoom or Crowd as I have not looked at them close enough and the chances of IPO hype are still great. But for Zscaler, Elastic, and Mongo…even Zscaler is not even close to a bubble and you don’t even have to use 50% compounded growth to derive that fact. In fact the numbers I used have Zscaler underperforming.

One very interesting fact was that Elastic is a full year cheaper than Mongo or Zscaler, and I called Alteryx looks like a bargain here. Not because the stock fell, technicals or the like, but based on fundamental valuation.

Why ESTC AND AYX LIKE THIS? Not the first time for AYX.

If I get the time and gumption I will reiterate the rules and why’s and look fors. I don’t need to write them down because they are in my head and on NPI we discussed them so often. But may be worth one last formal writing, for then subsequent discussion.

Tinker

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Dunno…think Warren Buffet has helped your returns these past several years?

Yes, but not in the way you think. Peter Lynch is very high on my favorite’s list and some of his advice is timeless. But my two all time favorites are Buffettology by Mary Buffett. This book is despised by the Berkshire-Hathaway Foolish board. The other, which I reread multiple times, is Reminiscences of a Stock Operator is about a trader. He said something like “If you want to invest, buy annuities.”

These two books are addressed more at how markets work than at stock picking which is what most people consider “investment books.”

Denny Schlesinger

Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The World’s Most Famous Investor by Mary Buffett, David Clark
https://www.amazon.com/Buffettology-Previously-Unexplained-T…

Reminiscences of a Stock Operator Paperback – January 17, 2006
by Edwin Lefèvre (Author), Roger Lowenstein (Foreword)
https://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Le…

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Okay, guys, this thread has been Off-Topic from the beginning. I’ve been patient with it, but it’s now 17 posts. TIME TO END THIS THREAD NOW.
Thanks for your cooperation.
Saul

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If you’re looking for a true investment classic, I’d recommend ‘Quality of Earnings’ by Thornton O’Glove. 1987 published so a bit more recent than the 1920s-1950s tomes.

Another book that will also help keep you wise to the tricks that no-longer-fast-growth companies will play, check out The Art of Short Selling by Staley. [I am not recommending anyone short sell.]

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Why is David Gardner not listed as one of the greatest books of all time with Rule Breakers?

Why?

To reiterate what I said months ago:

The Gardners were very clear in 1999 and prior that ‘Price/valuation doesn’t matter!’ in the Rule Breaker portfolios. They thought that paying a ridiculous price for an RB now is okay, because several years later the stock would be worth even more.

Here’s what RB staff said in spring 1999 [before your arrival]:
Unlike some of the other portfolios in Folly, the Rule Breaker method does not worry much about current valuation. For those who love finding the disparities between current price and intrinsic value, let me suggest the Boring portfolio. Here in the Rule Breaker portfolio we look at valuation with some sort of vague interest...

The Motley Fool’s Rule Breakers, Rule Makers published 1999.
In the book, they tell investors not to pay attention to earnings statements for Rule Breakers. It makes the point that for good companies, you should buy the stocks at any price. There is no discussion of valuation ratios and company fundamentals in the book.

At year-end 1999, they had 75% of their Rule Breaker assets in 3 stocks: AOL, AMZN, and Celera Genomics, mostly in the first two:
AOL fell from $80 to $11 in 3 years.

Amazon went from over $110 to $6 in less than 2 years. They advised selling half in the $11-11.50 range in March 2001! Even though it had crashed to only 6% of the RB portfolio at this point.

They also said this: We don't think that [Amazon] can achieve worthwhile appreciation over the next 10 years or so...Yes, we could have sold it at $100, or $75...We don't worry much about market pricing, however."

Celera was acquired in 2011 at $8 after Rule Breaker bought it at $80 in 1999.

5th biggest holding was At Home which went out of business less than 18 months later.

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