Scientia potentia est. Knowledge is power. Benjamin Franklin was quoted saying that: “If a man empties his purse into his head no one can take it away from him. An investment in knowledge always pays the best interest.” Market trends change, fortunes rise and fall like the tides, but if you are equipped with enough knowledge, you can weather your failures, protect yourself, and find success, whatever the circumstance may be.
According to Linette Lopez of Business Insider, when Warren Buffet was asked by one student in one of Columbia University’s investing class, how to prepare for a career in investing, Buffet stopped for a couple of second to think about his answer. Then, he reached for a stack of reports, trade publications and miscellaneous papers that he had brought with him that day. He told the student to read, constantly. Omaha.com reported that Buffet told the students to: “Read 500 pages like this every day…[t]hat’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”
In my years in the financial industry, I have read my fair share of books on business, finance, and investment – some of them niche books focused on a particular aspect of investment, and some of them books that are considered part of the canon of the financial world – and most of them have helped me build a system of knowledge that allows me to understand how the industry works and operates. This is key. Build your knowledge base, but make sure that you not only know facts and figures – make certain that you understand what you’re reading and can apply it to real life situations correctly and efficiently.
I have chosen some remarkable books on investments, which I have selected not because they are popular or bestselling, but because I think they impart insight and knowledge that could help readers and those who are starting on the business of investments.
The Alchemy of Finance by George Soros
This book provides a theoretical and practical view of current financial trends and offers a new paradigm by which we can view today’s financial market. It also describes Soros’ innovative investment practices and his views of the world. It provides plenty of expert advice and valuable business lessons.
The Essays of Warren Buffett by Warren Buffett
This book contains mostly raw materials from Warren Buffet’s letters which explains the principles and logic behind Buffet’s business and life philosophy. The book expounds on the relationship of principles held by Buffet which revolve around the core concept of the price and value.
The Intelligent Investor by Benjamin Graham
This is a classic book by one of the greatest investment advisors of the 20th century. It is regarded as one of the best books ever written on the subject of finance and investing. Graham espoused the philosophy of value investing and taught many people how to develop long-term strategies and avoid errors. It is widely thought of as the stock market bible.
Common Stocks and Uncommon Profits by Philip Fisher
First published in 1958, this book provides helpful guidelines on how to find well managed companies with great growth prospects. Its author, Philip Fisher, is widely regarded as one of the most influential investors of all time and his writing is thought of as financial gospel. This book is a must read for anyone in the finance and investment world.
The Theory of Investment Value by John Burr Williams
Initially written as a Ph.D thesis at Harvard in 1937, the book was first printed in 1938 and years later, is still considered as important, and indeed, one of the most influential and authoritative work on how to value financial assets. Though the book combines theoretical concepts and the author’s commentary about the investments industry, it remains accessible to the general public. This book is for anyone who wants to be an investor or a student of finance.
One Up on Wall Street by Peter Lynch
This book chronicles the author’s experience with Fidelity’s multibillion-dollar Magellan Fund and how he achieved his feat. The book also offers easy-to-follow guides on how to review financial statements, as well as offers guidelines for investing in fast-growing companies. It delivers keen insights on interest rates and how to deal with market movements. Although the examples used are taken from the 70s and 80s, the book remains current because the basic principles and tenets espoused are still very much applicable to the present day.
These are only a few of the plethora of investment and finance books available out there for anyone who wants to learn more about the financial industry. The best thing to do, when trying to learn, is to make sure that your base understanding of the subject is solid and to always update your knowledge. Keep current so as not to become obsolete as times change and some of the principles that had once been held as truth are rewritten. Remember, never tire of reading or learning because the knowledge you gather is as important as the investments you make.