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Investment
Books
- Expert Investors -
Books
for expert investors, especially concerning technical
analysis
These
books are aimed at people who have a solid understanding
of finance and/or trade for a living. There are
quite a few on technical analysis for the "chartists"
out there. Update 8/16/2006
-
Peter Bernstein (ed.)
The Portable MBA in Investment
- Warren E. Buffett and Lawrence A. Cunningham
The
Essays of Warren Buffett: Lessons for Corporate
America top10
pick fidelity
This
book is a collection of annual report letters
by legendary investor Warren E. Buffett to shareholders
of Berkshire Hathaway, Inc., the holding company
for which he serves as chairman and CEO. Buffett
is widely regarded as one of the most successful
investors of the 20th century. Reading this collection
of shareholder letters, carefully arranged and
edited by Lawrence A. Cunningham, is like taking
a course from Buffett himself, as you learn the
thoughts and theories behind his investing practices.
In his shareholder essays, you won't find Buffett
commenting much about the stocks he owns, but
he loves to discuss the basic principles behind
his investments. Many of his principles are derived
from his study at Columbia University, where he
learned — and later worked — under the
tutelage of professor Benjamin Graham (The Intelligent
Investor, Security Analysis).
Buffet's folksy writing style has made his letters
among the most widely read financial documents
on Wall Street each year. In his company's 1989
report, Buffett wrote:
"We hope to buy more businesses that are
similar to the ones we have, and we can use some
help. If you have a business that fits the following
criteria, call me or, preferably, write. Here's
what we're looking for:
(1) Large purchases (at least $10 million of after-tax
earnings),
(2) demonstrated consistent earning power (future
projections are of little interest to us, nor
are "turnaround" situations),
(3) businesses earning good returns on equity
while employing little or no debt,
(4) management in place (we can't supply it),
(5) simple businesses (if there's lots of technology,
we won't understand it),
(6) an offering price (we don't want to waste
our time or that of the seller by talking, even
preliminarily, about a transaction when price
is unknown).
"We will not engage in unfriendly takeovers.
We can promise complete confidentiality and a
very fast answer — customarily within five
minutes — as to whether we're interested.
We prefer to buy for cash, but will consider issuing
stock when we receive as much in intrinsic business
value as we give."
Buffett is not immune to owning up to poor investing
results, either. Witness this commentary from
1999's annual report letter:
"Even Inspector Clouseau could find last
year's guilty party: your Chairman. My performance
reminds me of the quarterback whose report card
showed four Fs and a D but who nonetheless had
an understanding coach. 'Son,' he drawled, 'I
think you're spending too much time on that one
subject.' My 'one subject' is capital allocation,
and my grade for 1999 most assuredly is a D. What
most hurt us during the year was the inferior
performance of Berkshire's equity portfolio —
and responsibility for that portfolio, leaving
aside the small piece of it run by Lou Simpson
of GEICO, is entirely mine."
-
John F. Carter
Mastering the Trade fidelity
chk
- Tushar
S. Chande and Stanley Kroll
The New Technical Trader: Boost Your Profit
by Plugging into the
Latest Indicators
-
Robert W. Colby and Thomas A. Meyers
Encyclopedia of Technical Market Indicators
-
Robert D. Edwards and John Magee
Technical Analysis of Stock Trends
top10
pick fidelity
Many
traders who use technical analysis mentioned the
Edwards and Magee book as "the bible of technical
analysis." The book claims to be "the
first to produce a methodology for interpreting
and profiting from the predictable behavior of
investors and markets." What traders feel
strongly about is that this book shows them how
to use technical analysis to make money trading
regardless of market conditions. It thoroughly
explains all of the key technical trading concepts,
including chart patterns, relative strength, candlesticks,
oscillators, momentum and volume, moving averages,
and other indicators. In addition, the authors
explain how to spot trends through the use of
these technical indicators.
Professional trader Kornstein explains why he
feels the Edwards and Magee book is so essential.
"Basically, technical analysis is graphing
the changes in price, time, and volume, and the
mathematical derivatives that are formulated from
this data," he says. "The concepts taught
in this book are as useful today as they were
fifty or sixty years ago."
For a less-intensive understanding of technical
analysis, Kornstein recommends Martin J. Pring's
book Technical Analysis Explained. Pring covers
the technical indicators of the markets by explaining
the concepts in simple, easy-to-understand language.
-
Alexander Elder
Trading
for a Living: Psychology, Trading Tactics, Money
Management top10 pick fidelity
Dr. Elder, a trader and psychiatrist, was one
of the first traders to recognize the importance
of the emotional aspects of trading. He pointed
out that a superb trading system with a poor psychological
profile often leads to an unprofitable portfolio.
"Elder focused on giving first-time traders
their own trading plan so that you not only knew
where to start, but you also had a good formula
for managing risk," says Deron Wagner, president
of Morpheus Trading Group. "It was the first
book I read after I got into trading and it helped
me get my feet wet."
Wagner says that the sections of the book that deal
with psychology and risk management are "must
reads."
On a personal note: Every time I discuss trading
with Dr. Elder, I gain additional insight about
what really goes on behind the scenes in the stock
market. And that's the essence of his book: It reflects
his knowledge and understanding of what makes markets
move up or down. Elder followed his first best-selling
book with another, Come Into My Trading Room.
-
Alan S. Farley
The Master Swing Trader fidelity
chk
- George
A. Fontanills
The Stock Market Course fidelity
chk
-
Marc Friedfertig and George West
The Electronic Day Trader
-
A. J. Frost, Robert J. Prechter, and Robert R. Prechter
Elliott Wave Principle: Key to Market Behavior
-
Benjamin Graham and David L. Dodd
fidelity
Security Analysis
-
Benjamin Graham
The Intelligent Investor top10
fidelity chk
This
best-selling book, originally published in 1949,
is often referred to as the definitive work of
fundamental analysis. College professor Benjamin
Graham is considered by many to be the world's
greatest investment advisor of the 20th century
because he introduced a generation of investors
to a strategy called "value investing."
From an early age, Graham learned the importance
of thoroughly researching a company and determining
whether its stock price was a good value.
Graham's book can be useful to both investors
and traders, according to several professionals
in both camps. Consider what independent trader
Howard Kornstein says: "Traders should read
and study this book. Although The Intelligent
Investor was written more than 50 years ago, it
is not outdated. The fundamentals of the securities
marketplace have not changed. If you're going
to take a long position, it benefits you to choose
a company that is fundamentally stable. By reading
this book, you learn to identify companies that
are fundamentally sound and in position for a
possible trade. Anyone who trades a company that
is not fundamentally stable is likely to execute
a trade that could result in a significant loss."
Kornstein said he chooses trades using a combination
of charts and fundamental valuation.
Although the original version of this book was
found to be a difficult read for some novice traders
or investors, the terminology of the latest version
is markedly improved. Another highly respected
Graham book — Security Analysis (originally
published in 1934 with co-author David Dodd) —
is considered a dietary staple for those considering
a career in portfolio management.
- Joel
Greenblatt
You Can Be a Stock Market Genius fidelity
chk
The Little Book That Beats the Market fidelity
chk
- Robert
G. Hagstrom; foreword by Peter Lynch
The
Warren Buffett Way fidelity
chk
- Jeffrey
A. Hirsch and Yale Hirsch
Stock
Trader's Almanac top10 pick
fidelity
The
Stock Trader's Almanac is a reference book that
many traders believe is a requirement for any
serious trader. This almanac includes several
graphs, historical charts, market data, forecasts,
economic announcements, and a calendar of events,
among other information. Although not 100 percent
accurate in its recommendations, the book will
give insight on historical market events and performance,
and provide forecasts as to when the authors believe
similar scenarios could occur in the future. In
addition, the almanac will help identify specific
trends that take place on a yearly or cyclical
basis. For example, the book notes that the market
tends to have higher trading volume during the
first three weeks of a new calendar year. The
authors also assess the probability of whether
or not a similar trend could take place the following
year.
-
John C. Hull
Options, Futures, and Other Derivatives
-
Jonathan E. Ingersoll
Theory of Financial Decision Making
-
R. A. Jarrow
Modelling Fixed Income Securities and Interest
Rate Options
-
William L. Jiler
How Charts Can Help You in the Stock Market
-
Jeffrey Katz and Donna L. McCormick
The Encyclopedia of Trading Strategies
- Ari
Kiev M.D.
Trading
to Win
fidelity chk
-
Charles Lebeau and David W. Lucas
Technical Traders Guide to Computer Analysis
of the Futures
Market'
- Roger Lowenstein
Buffett:
The Making of an American Capitalist
fidelity chk
When
Genius Failed fidelity
chk
- Marcel
Link
High
Probability Trading
fidelity chk
- Peter Lynch (with John Rothchild)
One
Up on Wall Street top10
fidelity chk
Portfolio
manager Peter Lynch led Fidelity Magellan Fund
to a 28-fold per share gain from May 1977 to May
1990, and is recognized as the most successful
mutual fund manager of this generation. When he
wrote One Up on Wall Street, in 1989, an increasingly
larger percentage of the U.S. population was investing
in the equity market, but many newcomers had little
knowledge about how to buy and sell stocks.
"My objective in writing the book was to
communicate many of the basic investing principles
I adopted over the years," Lynch points out.
"I felt it might help those people willing
to put in the time and do the research work necessary
to become a better investor."
One of Lynch's key messages was to understand
the companies issuing their stock. With his friendly
writing style, he explained in his book that investors
could identify profitable companies based on their
own experience and observations. For example,
a person who worked in a shopping mall during
his or her career might have an edge in the retail
sector, just by watching which stores were busy
and which products were big sellers. The person
working at the mall could have seen a lot of good
ideas just by observing consumers and talking
with them. This kind of company observation helped
generate several good stock ideas for Lynch in
his term running Fidelity Magellan, and he would
follow up on those ideas with rigorous fundamental
research.
"For new investors, Lynch teaches you how
to use what you already know to make money in
the market," wrote author and former portfolio
manager Joshua Kennon, who included Lynch's book
in his own top-10 list on About.com.
Another important lesson Lynch sought to pass
along to readers was that investing was serious
business. He pointed out that many people spent
more hours researching a new television set purchase
than investing $20,000 in a stock based simply
on a tip they heard from a neighbor.
Beating
the Street fidelity
chk
-
Charles Mackay fidelity
chk
Extraordinary Popular Delusions and the Madness
of Crowds
-
John F. Magee
Analyzing Bar Charts for Profit
-
Lawrence G. McMillan fidelity
Options as a Strategic Investment
-
Robert Merton
Continuous Time Finance
-
John J. Murphy
Technical Analysis of the Futures Markets
-
John J. Murphy
Study Guide for Technical Analysis of the Futures
Markets:
A Self-Training Manual
Technical
Analysis top10 pick fidelity
chk
Technical
Analysis of the Financial Markets guides you from
the first application of Dow Theory and the basics
of charting through the latest computer technology
and most advanced analysis systems. Written by
StockCharts.com's John Murphy, a former director
of Merrill Lynch's technical analysis futures
division, this book includes 400 charts that clarify
key points of the following: candlestick charting,
point-and-figure charting, oscillators, Elliot
Wave Theory, Fibonacci, and other technical indicators.
Gail M. Dudack, chief investment strategist for
Warburg Dillon Read, provided the following testimonial
to Murphy's book: "No one in this generation
had contributed more to technical analysis than
John Murphy. Through his series of books, he has
opened the door to many and raised the standard
for all who use technical analysis. His books
should be required reading for everyone in the
securities business and are never more than a
step away from my desk."
-
Sheldon Natenberg
Option Volatility and Pricing: Advanced Trading
Strategies and
Techniques
- Steve Nison
Japanese Candlestick Charting Techniques fidelity
chk
-
Robert Pardo
Design, Testing, and Optimization of Trading
Systems
- Martin J. Pring
Technical Analysis Explained fidelity
chk
-
William J. O'Neil
How to Make Money in Stocks top10
pick fidelity chk
William
O'Neil, publisher of the popular financial newspaper
Investor's Business Daily, was one of the first
investors to clearly explain how to select profitable
stocks using both fundamental and technical analysis.
In his best-selling book How to Make Money in
Stocks, originally published in 1988, he introduced
traders and investors to his rule-based, common-sense
trading approach — CAN SLIM.TM The acronym
CAN SLIM stands for: Current quarterly earnings
per share, Annual earnings per share, New products,
Shares outstanding, Leaders, Institutional sponsorship,
and Market direction.
"What's so great about this book is that
O'Neil takes the best strategies and combines
them into one technique, CAN SLIM," says
Morpheus Trading Group's Wagner. "He also
gives specific rules that you can use when entering
a position. Most important, he tries to keep you
from buying stocks that will fall apart, and he
does that by teaching you how to find quality
stocks by combining fundamental and technical
analysis." Wagner adds that 80%-90% of the
stocks that he buys are based on a modified version
of O'Neil's system.
During a previous interview I had with O'Neil,
he explained how he first used CAN SLIM to turn
a small amount of money into a fortune. With his
profits, he started his financial newspaper based
on the successful theories included in his book.
-
Robert R. Prechter and R. N. Elliott
R. N. Elliott's Masterworks: The Definitive
Collection
-
Martin J. Pring
Martin Pring's Introduction to Technical Analysis
-
Martin J. Pring
Technical Analysis Explained
-
Peter Ritchken
Options: Theory, Strategy, and Applications
-
Robert P. Rotella
The Elements of Successful Trading
- Jack
D. Schwager
The Market Wizards &
The New Market Wizards top10
pick fidelity
These
two complementary books are often mentioned as classics
primarily because of the author's probing question-and-answer
techniques. In these books, Schwager delves into
the minds of some of the country's most successful
traders to unlock the wisdom behind their profitable
trading techniques.
Author Turner says the Schwager books are her favorites.
"From these financial superstars, we discover
not only terrific insight into the workings of the
financial markets machine, we learn that along with
their victories, these traders have experienced
losses that were, at times, devastating. Yet, they
emerged stronger and with renewed conviction that
they could succeed in one of the world's most challenging
arenas. These two books remain timeless, compelling,
and always present me with new nuggets of wisdom."
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