Great Books on Investing
The best book on investing I have read (of course, this is a highly subjective choice) is The Most Important Thing, by Howard Marks. This is a compilation of Howard Marks Memos to his investors, which are extremely well written and extremely perceptive.
Another book which changed my perspective was The Little Book that Builds Wealth, by Pat Dorsey. This book brings out the concepts of economic moat in an extraordinarily simple way. It shows you what a great business is, and what makes a great business very different from an ordinary business.
Another book I enjoyed very much, was Margin of Safety, by Seth Klarman, though the ideas are better dealt with by The Most Important Thing.
Another book on Value Investing which has influenced me is the latest edition of The Intelligent Investor, by Ben Graham.
Another book, which gives a very different perspective to these value investors, but which is a must read to understand the limitations of individual investors is A Random Walk down Wall Street, by Burton G. Malkiel. I think this is also a book to read. If someone truly believed in the Efficient Market Hypothesis, then one ought be reading this blog, or any of the books above or below. But if you believe in a weaker form of the Efficient Market Hypothesis, this book is a great place to begin.
For a great perspective on investing through the last few decades, and for a great insight into the minds of Warren Buffett and Charlie Munger, there is no better place that to read the whole bunch of their letters to their investors. Some years ago, I had reviewed these letters in a forum. You can find a powerpoint of the review here. I would also reading the SnowBall, a book which details the life of Warren Buffett in a remarkably candid manner. Also, Poor Charlie’s Almanac, if you can get it, is a great book which compiles the various thoughts of Charlie Munger.
Trading Books which Have influenced Me
A trading book which I read early, and whose concepts on portfolio optimization, risk management and position sizing have influenced me greatly is Trading Systems, by Tomasini and Jaeckle.
A simple book on trading edges, but which I actually have imbibed quite well is How to Beat Wall Street, by J B Marwood.
Another book on mean reversion systems, which has directly influenced some of the strategies I use, is again very simply written. It is Short Term Strategies that Work, by Connors and Alvarez.
A book on Options, which explains complex things like greeks and volatality in very simple terms, which I found a fascinating read is Buying and Selling Volatility, by Connolly.
Another set of very nice books on Options has been written by Jeff Augen. An example is The Volatility Edge in Options Trading.
Other Books which Have Influenced My Investing.
The Black Swan and Fooled by Randomness are both books by Nassim Taleb, which I found fascinating, and in many ways, they have influenced me, and taught me something about life and risk that no other books have. I reviewed both these books at a forum some years ago, and the links are to my reviews.
Thinking, Fast and Slow by Daniel Kahneman is another book which has greatly influenced me. In my graduate study, I was fascinated by the work of Kahneman and Tversky on Prospect Theory, and I was glad to review this book also at a forum. The link is to my review, not the book.