Book Recommendations

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Octafinance Book RecommendationsThe books presented below are these that our team have read and believe are crucial for success in the markets. These top books provide historical perspective as well as detailed analysis not only on investing and trading but also on how the world works. On this frequently updated page, we provide you with our favorite books’ list and their brief overviews.

The books are separated in several categories:

Trading & Macro Books

Best Investment Books For Value Investing

Best Books on Asset Allocation

Stock Market Bubbles Books

Books About Financial Crisis

General Stock, Investment and Business Books

Top Accounting Books

Trading & Macro Books

Market Wizards, Updated: Interviews With Top Traders by Jack Schwager. Jack Schwager interviews 16 of the top traders in the world. This book, like no other until its sequel, really elucidates what’s important for trading success. We have always believed that trading success consists of the commonalities of what great traders do and how they think. And if you want to learn that, then this book is the place to start.

The New Market Wizards: Conversations with America’s Top Traders by Jack Schwager. There are a lot more than 16 great traders and Schwager presents some more of them in this classic book. Van Tharp personally thinks the William Eckhardt’s interview alone is worth the price of the book.

The Little Book of Market Wizards: Lessons from the Greatest Traders by Jack Schwager. The Little Book of Market Wizards focuses on the value of understanding one’s self within the context of successful investing. For an in-depth view of the art of investing and how to adopt the practices of top professionals, Schwager’s Little Book is one of the best, most entertaining guides out there.

Hedge Fund Market Wizards: How Winning Traders Win by Jack Schwager. Presents exclusive interviews with fifteen of the most successful hedge fund traders and what they’ve learned over the course of their careers. Includes interviews with Jamie Mai, Joel Greenblatt, Michael Platt, Ray Dalio, Colm O’Shea, Ed Thorp, and many more. Explains forty key lessons for traders. Joins Stock Market Wizards, New Market Wizards, and Market Wizards as the fourth installment of investment guru Jack Schwager’s acclaimed bestselling series of interviews with stock market experts.

Stock Market Wizards: Interviews with America’s Top Stock Traders by Jack Schwager. The third in the bestselling Market Wizards series, this time focusing on the barometer of the economy – the stock market. This book will feature interviews with a variety of traders who achieved phenomenal financial success during the glory days of the Internet boom. In contrast with the first two Market Wizard books, which included traders from a broad financial spectrum – stocks, bonds, currencies and futures – this volume will focus on traders in the stockmarket.

Value Investing & Valuation Books

Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions) A follow-up to The Intelligent Investor, this newest edition is more comprehensive and includes thoughts and opinions from leaders and legends in value investing.

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel by Benjamin Graham.  If anyone knows investing, it’s Warren Buffet, and he proclaimed this book to be the top tome on investment.  This book is a must read; it is the final word on value investing.

Fooling Some of the People All of the Time, A Long Short (and Now Complete) Story, Updated with New Epilogue by David Einhorn.  Einhorn tells of his short of Allied Capital and showcases his investment style.  Whether focusing on the story or on the amazing amount of research Einhorn put into stocks, this book is an excellent read for all.

The Interpretation of Financial Statements by Benjamin Graham.  In this short writing, Graham explains the ins and outs of reading financial statements.

 

Confidence Game: How Hedge Fund Manager Bill Ackman Called Wall Street’s Bluff by Christine Richard.  This book opens with a look at Bill Ackman’s early life.  It details his short of MBIA that spanned six year.  It focuses on the time Ackman invested in researching the company.  While similar to Einhorn’s, Ackman’s style is somewhat less technical.

One Up On Wall Street: How To Use What You Already Know To Make Money In The Market by Peter Lynch.  The beginning investor will find this book invaluable.  Lynch takes pains to use plain language to explain the often complicated concepts that form his style of investing.  Along with Beating the Street, every investor should read this.

John Neff on Investing by John Neff.  If you’re looking to manage your money, you cannot go wrong by following Neff’s rationale when picking stocks.  Neff takes the reader through the intricacies of fund management, and is a must read for any serious investor.

Beating the Street by Peter Lynch.  A companion book to One Up on Wall Street, this offering by Lynch outlines the strategies he used to outperform the market.  To understand Lynch’s style of investing, simply read both of his books.

Common Stocks and Uncommon Profits and Other Writings by Philip Fisher.  If you follow Warren Buffet’s advice, you’ll read this book by his mentor.  Fisher’s investment strategies are complicated and require a good deal of time, but learning his concepts of investing is a worthy use of anyone’s time.

Contrarian Investment Strategies: The Next Generation by David Dreman.  This book, written by the first of the contrarians David Dreman, offers simplistic explanations of complex investment practices that can result in extremely high returns.  Dreman also explores the “herd mentality” so prevalent on Wall Street and explains the psychology behind the investment choices.

The New Contrarian Investment Strategy by David Dreman.  In yet another outstanding book from Dreman, the author explores investor psychology and the wisdom behind resisting the “hot stocks” that pop up.

By Joel Greenblatt The Little Book That Beats the Market (1st) by Joel Greenblatt.  Required reading by a top-notch investor with an enviable investment record.  Greenblatt details two simple strategies that can yield excellent results for investors.  In addition, his website is available to assist with ideas for putting the strategies into practice.

The Little Book That Still Beats the Market by Joel Greenblatt.  Do you dream of beating the market?  Let hedge fund manager and professor Joel Greenblatt teach you how.  With Greenblatt’s methods, you could potentially rank your returns right up there with the top investment professionals.

You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt.  Don’t let the title fool you:  this book lives up to its title.  Greenblatt discusses ways to find obscure investment opportunities with potential for very high returns.  These include spin offs and bankruptcies, arbitrage and recapitalizations.  If you are serious about investing, this book is a must.

The Big Secret for the Small Investor: A New Route to Long-Term Investment Success by Joel Greenblatt.  In this must read book, Greenblatt lets the cat out of the bag for both individual investors and professionals.  If you’re interested in learning principles of value investing and coupling those ideals with common sense and discipline, this book is for you.

The Little Book of Value Investing by Christopher Browne.  Don’t let the small size of this book fool you: it is full of tips from famous investor Christopher Browne.  TheLittle Book details value investing strategies to foreign investing.

Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth Klarmin.  Nothing makes a book more valuable than its being out of print.  The scuttlebutt on this book is that Klarmin regretted giving away some of his best investment secrets.  That, and the fact that the author is now deceased, contributes to the high price of the book today.

The Dhandho Investor: The Low-Risk Value Method to High Returns by Mohnish Pabrai.  In this book, Pabrai gives insight into his method of investing that includes investing in simple companies where the risk is low.  If you are running a business or getting into investing, this book by the famed value investor shows you how to capitalize on odds that are heavily in your favor.

Value Investing: From Graham to Buffett and Beyond by Bruce Greenwald.  Anyone serious about value investing needs to read this book.  Here Greenwald explores his version of the various styles of value investing.

Value Investing: A Balanced Approach by Martin J. Whitman.  An investment legend, Whitman gives the definitive definition of value investing.  Using sophisticated language and approaching it differently than Graham, Whitman’s interest is more with the assets than the earning potential.  Whitman highlights book value over earnings, past or future.

The Aggressive Conservative Investor by Martin J. Whitman.  The world of corporations and shareholders, management and unions, according to Martin J. Whitman.  Not only does Whitman cover points of interest for any investor, he also explains GAAP accounting practices.  Any serious value investor would be wise to read both of Whitman’s books.

The Warren Buffett Way, Second Edition by Roger Hagstrom.  Have you ever wondered exactly how Warren Buffett goes about picking his investments and what makes a business valuable?  In this excellent book, Hagstrom explains it all in easy to understand terms.

Do-It-Yourself Investment Analysis: Practical Guide to Life Cycle, Fundamental and Technical Analyses by James Burgauer.  These books are the perfect way for beginning investors to master basics of fundamental analysis, as well as gain an understanding of the myriad of different financial ratios that investors use so frequently.

The Little Book of Behavioral Investing: How not to be your own worst enemy by James Montier.  In this book, Montier explores how our investment choices are driven by our minds and the effect of behavior finance on the process.

The Triumph of Value Investing: Smart Money Tactics for the Post-Recession Era by Janet Lowe.  While not a household name, Lowe is a successful author of 22 books and numerous audiotapes on value investing.

The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies by John Reese.  This great book is a compilation of strategies from 10 investment giants, including Warren Buffett, David Dreman, Benjamin Graham, and Joel Greenblatt, along with John Neff and Peter Lynch.  This is an easy way for beginners to get a taste of the tried-and-true strategies that have proven to beat the market.

There’s Always Something to Do: The Peter Cundill Investment Approach by Christopher Risso-Gill.  Known throughout Canada as a great value investor, Peter Cundill of the Cundill Value Fund has a track record that’s hard to beat.  While managing the Fund for 33 years, Cundill’s record came in at 15.2% per annum.

Money Masters of Our Time by John Train.  An engaging profile of some of the top investors of modern times.

 

The Little Book of Sideways Markets: How to Make Money in Markets that Go Nowhere by Vitaliy N. Katsenelson.  Don’t let the bulls and bears of the market frighten you.  Katsenelson gives an easily understood explanation of the market’s ups and downs with solid advice on making money without hitting the common pitfalls of the market.

Asset Allocation

The Elements of Investing: Easy Lessons for Every Investor by Burton Malkiel and Charles D. Ellis.  This book gives insight into a simple way to not only manage your portfolio, but also save money while controlling your personal finances and asset allocation.

Value Averaging: The Safe and Easy Strategy for Higher Investment Returns by Michael Edleson.  In 1988, Michael Edleson introduced the world to his idea of value averaging.  He subsequently wrote this book in 1993, and it has been flying off the book shelves since.  Now reintroduced, you can explore a strategy to build your own wealth by increasing investment returns, which help you reach your own financial goals.

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Eighth Edition) by Burton Malkiel.  This book claimed its place a long time ago at the top of the must read list for anyone starting a portfolio.  Planning to talk to a broker, or thinking of managing your own portfolio?  This book should be the first book you read.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John Bogle.  Common sense investing means building a diversified portfolio of various stocks, then holding the line for the long term.  With Bogle’s book as a guide, you can learn how to win at the game of investing.

Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition by John Bogle.  A pioneer in mutual funds, Bogle takes an updated look at the mutual fund industry.  This book reviews the myriad assortment of alternative investments available to investors today, explaining the fundamentals of mutual fund investing and building an investment portfolio.

John Bogle on Investing: The First 50 Years (Wiley Investment Classics) by John Bogle.  Proudly claiming the title of Founder of the Vanguard Group and senior chairman for 50 years puts Bogle in the company of the best in the business.  In this chronicle of his career, topics such as indexing and its importance, the effect of costs on investment returns, and diversification are addressed in detail.

The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein.  Looking to build a top-performing portfolio without the direction of a financial advisor?  Dr. Berstein’sFour Pillars provides common sense, sound advice in an easy to understand, informal manner that can help any investor reach self-sufficiency and make informed investing decisions.

The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk by William J. Bernstein.  An unlikely candidate for the crown of investment guru, Bernstein is a practicing neurologist who is self-taught in his investment strategies.  He has built an investor’s website that is growing in popularity.  In his book, Bernstein demonstrates how to build a dynamic portfolio without getting lost in the technical jargon of the trade.

Stock Market Bubbles

Devil Take the Hindmost: a History of Financial Speculation by Edward Chancellor.  Speculation is nothing new to human history.  From medieval Europe to the 1630s with its Tulip mania, it all leads up to today’s internet craze.  Chancellor investigates the forces that push people to gamble their money in market investments, both from the psychological standpoint and the economic view.

Irrational Exuberance by Robert Shiller.  Ordinary Americans and professional investors both took a serious hit in the recent bursting of the bubble economy.  In this classic work on the economics of behavior and the instability of markets, Shiller gives thoughtful insights and clearheaded warnings that are invaluable to any investor.

Books About Financial Crisis

The Big Short: Inside the Doomsday Machine by Michael Lewis.  In this best-seller by financial author Michael Lewis, he spins an engrossing story of how some little-known investors did some serious short selling of the housing market.  The end result was a ton of money for these daring investors.

The End of Wall Street by Roger Lowenstein.  The now infamous mortgage bubble plunged America into the largest financial collapse since the 1930s Great Depression.  In this detailed account of that event and the U.S. government’s amazing response, Lowenstein tells the complete story that culminated in the death of Wall Street.

Too Big to Save? How to Fix the U.S. Financial System by Robert Pozen.  Executive reform.  Securitization process.  Accounting issues.  This book takes an in-depth look at the financial reforms needed in each of these areas, and more, to overhaul the current financial services industry.

The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It by Scott Patterson.  In capitalizing on never before granted access to the four titans of financial number-crunching, Scott Patterson tells the inside story of the men and the events that became history’s most horrendous financial debacle.

Mr. Market Miscalculates: The Bubble Years and Beyond by James Grant.  What happened?  That’s the question America asks when it looks at the current state of financial affairs.  In this book, Grant explains not just what happened, but how it happened and where we go from here.

On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry Paulson.  As a participant in the economic storm surrounding the collapse of the global financial system, Hank Paulson’s first-person account is a fast-paced, insider account of the extraordinary people and the politics that fashioned the financial cataclysm.

More Mortgage Meltdown: 6 Ways to Profit in These Bad Times by Whitney Tilson and Glenn Tongue.  This book is broken down into two parts: one explains the forces behind the housing bubble and how it burst.  The second part is a fundamental course in value investing and a critique of six different investments types.

This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth S. Rogoff.  This book takes a comprehensive look at the types of various financial crises that have plagues individuals and countries throughout history.  It includes tales from numerous centuries of government defaults, panicked runs on banks, and spikes in inflation.  Taking the reader from medieval debasements of currency to the subprime cataclysm, Reinhart and Rogoff demonstrate how short memories lead to history repeating itself.

Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves by Andrew Ross Sorkin.  Pulling on interviews and unfettered access to the players involved in the crisis, Sorkin weaves a true behind-the-scenes drama of how the small waves of financial failings ballooned into a global tsunami of unprecedented proportions.  This is not just a story of banks and financial institutions that were labelled “too big to fail”, but also includes a cast of well-known characters who thought themselves also “too big to fail”.

The Murder of Lehman Brothers, an Insider’s Look at the Global Meltdown by Joseph Tibman.  In his book, Tibman explores the complex string of events that led to the collapse of Lehman Brothers and the global repercussions that ensued.

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street by William Cohan.  Not only does Cohan detail the spread of panic when the financial meltdown first began, he painstakingly explores the reasons for the massive crashing of the Wall Street money machine.  Written with novel-like finesse, House of Cardslays out the detrimental effects on us all that comes from greed, arrogance and stupidity.

Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe by Gillian Tett.  In this book, Tett takes the reader to the insider depths of the world of competitive high finance.  Focusing on the involvement of the team at J.P. Morgan, Fool’s Gold helps unravel the most massive economic crisis since the Great Depression.

When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein.  Named one of Business Week’s Best Books of the Year for 2014, Lowenstein masterfully opens the door to the world of Long-Term Capital Management through the use of internal memos and personal interviews.

The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to Do about It by Robert Shiller.  Best-selling author and economist Robert Shiller breaks down the causes and effects of the subprime mortgage crisis that threw millions of people into lives of turmoil.  He then puts forth far-seeing and comprehensive steps to solve the problem.

General Stock, Investment & Business Books

The Black Swan: The Impact of the Highly Improbable (Incerto) by Nassim Taleb.  In this best-seller, Taleb is not talking about water fowl.  He popularizes the term “black swan” to mean a highly unlikely event that is predicated on three principle characteristics:  unpredictability, massive impact potential, and after-event explanations are fabricated to downplay the occurrences.

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto) by Nassim Taleb.  Similar to Black Swan, this offering by Taleb doesn’t live up to the bar set by his previous book but it offers a good read, nonetheless.

The Bed of Procrustes: Philosophical and Practical Aphorisms (Incerto) by Nassim Taleb.  Once again, Taleb is sticking with the theme of humanity making decisions that do not take the unknown into account.

 

Stocks for the Long Run 5/E: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies by Jeremy Siegel.  This book is a necessary read for anyone involved with investing or advising investors.  If you want to understand the intricate workings of the market – behavior, trends, and influences – this is a must read before developing your portfolio.

The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing) by Howard Marks.  Widely acclaimed by such economic titans as Warren Buffet, Joel Greenblatt, and John Bogle, this book is a collection of the thoughts and opinions of Howard Marks.

There’s Always Something to Do: The Peter Cundill Investment Approach by Christopher Risso-Gill. If you are interested in the life story of Canadian value investor great Peter Cundill, this is the book for you.

 

Benjamin Graham, Building a Profession: The Early Writings of the Father of Security Analysis by Jason Zweig.  Drawing on previously undiscovered letters of Benjamin Graham, Zweig puts together a comprehensive study of the Father of Security Analysis.

The Little Book That Builds Wealth by Pat Dorsey. As Director of Equity Research for Morningstar, Inc. – a leading independent investment research provider – Dorsey reveals in Little Book why economic moats can point to great long-term investments.  He breaks down the approach and explains how to effectively integrate it into your own investment plans.

Distress Investing: Principles and Technique by Martin Whitman.  Written by one of the outstanding investors of all time, this book is an exemplary resource for intermediate or advanced investors, though not recommended for beginners.

While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis by Roger Lowenstein.  With the baby boomer wave crashing toward the retirement shore, this book explores the underfunding of pensions across the country.

Competition Demystified: A Radically Simplified Approach to Business Strategy by Bruce Greenwald.  What gives one business a superior advantage over its competition?  Greenwald discusses that topic in this book, using stories of the phenomenal growth of Wal-Mart as examples.  This book takes a comprehensive look at globalization.

The Essays of Warren Buffett: Lessons for Corporate America, Third Edition by Lawrence Cunningham.  This is a collection of essays by economist Warren Buffet, as has been touted as one of the top investment books of all time.  A must read for any serious investor.

A Fool and His Money: The Odyssey of an Average Investor (Wiley Investment Classics) by John Rothchild.  This book is Rothchild’s critically acclaimed first-hand story of his year spent investing his money in the markets.  All is recounted in a sharp, humorous style that is profoundly entertaining.

The Only Investment Guide You’ll Ever Need by Andrew Tobias.  This book is exactly what the title says:  the only book you’ll need on how to save your money and effectively manage your personal finances.

 

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko.  If you’ve ever wondered how American millionaires made their money, then this is the book you’ve waited for.  Stanley and Danko describe how American millionaires achieved their success, and demonstrate the power of discipline when saving.

Top Accounting Books

Creative Cash Flow Reporting: Uncovering Sustainable Financial Performance by Charles W. Mulford.  If you are just beginning your investing, this book may prove too intense as it goes to extreme lengths to explain the manipulation of cash flow.

The Interpretation of Financial Statements by Benjamin Graham.  Do financial statements seems to be written in some alien language you would never be able to understand?  Graham’s book is here to help, giving insight and helpful information on how to interpret those overwhelming financial statements.

How to Read a Financial Report: Wringing Vital Signs Out of the Numbers by John A. Tracey.  If financial reports are a major source of headaches for you, this book may help to alleviate some of your suffering.  Tracey takes you through the process of determining the vital information from the rest of the data.

Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports by Thomas Ittelson.  This is an easy to understand how-to guide on creating your own financial sheets.

 

Quality of Earnings by ThortonO’Glove.  This book is a guide for investors on how to work your way through everything from financial reports to shareholder letters.  If analyzing financial statements is your cup of tea, this is recommended reading.

The Art of Short Selling by Kathryn F. Staley.  Even if you’ve never been interested in the art of short selling, this book can be entertaining and educational.  You will find yourself uncovering tricks used to inflate earnings, and how to spot fraud.  It also includes a nice section on understanding balance sheets.

Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, 3rd Edition by Dr. Howard Schilit.  This is a must read for anyone interested in tricks used by management to pull a fast one.  Schilit gives easy to understand explanations on reading earnings statements and the importance of cash flow statements.

Every year we also publish our top books list. Last year’s one can be accessed here OctaFinance Top 2014 Market, Trading & Investing Books.

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