My Favorite Books On Investing

/ March 17, 2015

Charlie Munger, Vice-Chairman of Berkshire Hathaway, developed his latticework of mental models by reading three leading textbooks on each subject. We can use the same approach for getting better at long term investing in marketable securities. But instead of three, there are twelve books that every investor should read and reread. I have read these books many times and I go back to them again and again before making an investment.

The most common thing that I hear from a lot of people is that they don’t have time to read. If you find yourself in that situation, I strongly recommend you to read finding-time-to-read. How long would it take to read twelve books? Let’s assume that each book has 350 pages. So in total you need to read 4,200 pages. If you read 12 pages every day then you can finish them all in one year. If you are an average reader like me then all you need is one hour every day for one year. The list of books are given below. After reading all these books you will definitely learn to look down before looking up i.e. avoid permanent loss of capital.

poor_charlies_almanack

margin-of-safety

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25 thoughts on “My Favorite Books On Investing”

  2. Great list Jana!

    I find that many people who come to investing and are not from a financial background, do so by reading about Peter Lynch or Warren Buffett.

    I believe, in this sense, that the 2 books that have done most for intelligent investing are:

    – One Up on Wall Street (Lynch)
    – Buffett: The Making of an American Capitalist (Lowenstein)

    Regards.

    • Andres,

      Thanks. You are absolutely correct. My interests in investing started with One Up on Wall Street.

      Regards,
      Jana

  3. Hi Jana,

    Thanks a lot for sharing a list of best books on investing!!!!!!
    But please give your valuable comments on the following points –
    1. A person who is very new to investing still will you suggest the same set of books? If not then which other books he/she should read first?
    2. If yes, then is there any specific order in which these books to be read as some books may be wrote in difficult language

    • Someone new to investing can go through the books in the order given. Couple of things (1) learn the language of business – http://goo.gl/8vpLoe (2) When the going gets tough, don’t give up.

      Regards,
      Jana

  4. Jana,

    I love your blog for its clarity of the thought.

    You had written about calculating return on incremental invested capital and referenced Prof. Sanjay Bakshi. I can not find that writing. If you remember, can you please send me the link to it?

    I thank you in advance.

    DR. Pankaj Patwari

  5. Thanks for sharing your favorites !! I have been looking to get my hands on “Financial Statement Analysis by Stephen Penman 5e” but it seems out of stock or very expensive. Only the international edition is available and/or affordable. Not sure if both are same. Any helpful information from you or fellow readers would be appreciated.

    Regards,
    Balaji

      • Hi Jana:

        I have the international edition (I currently live in Spain). Bought it more than a year ago. One of my favourite books on investing. Why don’t you recommend it? What’s the difference with the USA version?

      • Andres,

        I didn’t want to switch too much between GAAP and IFRS. My thought was that international edition focuses more on IFRS. If that’s not the case then it shouldn’t matter.

        Regards,
        Jana

      • Ok. There is some discussion about the differences between GAAP and IFRS. But the examples used in the book are of USA firms: Nike, Kimberly-Clark, CocaCola, Procter and Gamble… So I’m guessing they’re the same in both versions.

        Regards,
        Andrés

      • Andres,

        The contents are the same in the US edition also. So you are correct and the edition shouldn’t matter.

        Regards,
        Jana

  6. Thanks for your input guys. Luckily, i found the used version of US edition for affordable price on Amazon.

    Regards,
    Balaji

    • Perz,

      My favorite one on valuation is Accounting For Value by Penmann.

      Regards,
      jana

  8. Hi Jana ,

    Big fan of your blog …

    Have read most of the books mentioned .., will read the rest for sure .. I have 2 queries

    1 -> Where from can I find Poor Charlies almanack , the one at amazon is 6k plus ..(I am willing to spend but I am not sure if that is the best deal available in India)

    2 -> Charlie Keeps talking about Lattice framework formed through multiple disciplines .. Will be great if you could publish a list of books from various fields atleast 2 from each field.. To start with Cialdini Influence would be one for sure from Pshychology, similarly 2 books from various fields would be a great help .

    Thnx
    Sidharth

  11. Hi Jana

    Any insights on where and how can i get a copy of “margin of safety” at a reasonable price? Maybe i’ve to earmark an investment for that book 🙂

    Best
    PJM

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