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The 7 Best Investing Books

Sebencapital

Published
04/10/23
The 7 Best Investing Books

If you're like many discerning individuals, you're constantly searching for insightful books on the Stock Market and investing. You should start with a book that comprehensively overviews investment opportunities, spanning stocks and bonds to real estate, fine art, and cryptocurrencies.

Alternatively, you may delve into a specific area of investing or gain a deeper understanding of the strategies employed by investment experts.

Here's a list covering various topics, beginning with our top recommendation for an all-in-one book on investing: "The Bond King" by Mary Childs, a podcaster and journalist from NPR's "Planet Money."

This book presents a captivating biography of Bill Gross, formerly of PIMCO, who transformed the bond trading market, earning praise and criticism while accumulating substantial wealth.

If you're interested in value investing, we suggest "The Intelligent Investor" by Benjamin Graham, a beloved choice of many highly successful investors.

If you're looking for a complete guide to investing in general, "The Only Investment Guide You'll Ever Need" by Andrew Tobias is a dependable choice.

Best Overall: The Bond King

This year, we've seen an abundance of books about Bill Gross. In addition to Mary Childs' "The Bond King," which we regard as the top choice for investing books, Bill Gross has also published a self-penned autobiography called "I'm Still Standing: Bond King Bill Gross and the PIMCO Express."

Childs' book, which is both authoritative and captivating, delves into the life of the pioneering bond trader Bill Gross, who is associated with the investment management firm PIMCO. She portrays him as a brilliant visionary who transformed the investment world by creating a bond trading market.

However, Gross also emerges as an egotistical and unpredictable boss, known for being verbally abusive to his staff, to the extent that some would avoid passing by his office to evade encounters with him.

Over time, many staff members left the company, including Mohamed El-Erian, the former co-CEO and PIMCO co-CIO, whom Gross initially recruited from Harvard Management Co. as his future successor. This ultimately led to Gross' resignation from the company he had built.

Mary Childs, a co-host of NPR's "Planet Money" podcast, who has also contributed to publications like Barron's, the Financial Times, and Bloomberg News, guides readers through the subprime mortgage crisis, a period during which many Americans lost their homes due to predatory lending practices.

At that time, Gross was in close contact with numerous top federal and banking officials, who valued his opinions and influence.

Gross' journey began with early experiences in strategy, where he successfully applied card-counting skills as a blackjack player in various Las Vegas casinos. He then channeled that same determined mindset into the bond market, earning him the moniker "Bond King" by Fortune in 2002.

During his heyday, he graced the covers of business magazines, was featured in CNBC interviews, and was a sought-after speaker at financial events.

After he departed from PIMCO, he joined Janus Capital Group but could not replicate his previous success. In 2019, Gross disclosed his diagnosis of Asperger syndrome, which impacts communication skills. As of 2022, Forbes estimated Gross' net worth at $2.6 billion, disproving the notion that he had "lost it all."

Best Book About Value Investing: The Intelligent Investor

The key lesson from Benjamin Graham's highly acclaimed book: "Don't Lose." Of course, this is easier said than done, so let's delve deeper. Originally published in 1949, this book remains in print because it offers valuable insights to investors, whether they are newcomers, possess some knowledge and success, or are seasoned experts.

Graham provides the fundamental principles of value investing, which involves buying stocks of reputable companies when their true value is underestimated. This practice is akin to purchasing a well-crafted piece of furniture at a discounted price. The book was most recently updated in 2006.

Graham places less emphasis on analyzing securities and focuses more on expanding on investment principles and investors' mindsets. He emphasizes that an investor's intelligence has little to do with IQ or SAT scores. Instead, it hinges on patience, discipline, a hunger for knowledge, emotional control, and independent thinking.

The book covers various topics, including investment versus speculation, the impact of inflation on investors, general portfolio strategies, stock selection for both enterprising and defensive investors, company comparisons, and many other subjects.

To enhance the book's contemporary relevance, Wall Street Journal columnist Jason Zweig provides commentary after each chapter with recent examples.

In the fourth edition's preface, Warren Buffett, who holds the positions of chairman and CEO at Berkshire Hathaway, expressed: "I first read the initial edition of this book back in 1950, at the age of 19. At that time, I considered it the finest investment book available. My opinion hasn't changed."

Best Book on Investments Helping Society: Patient Capital

"Many of society's most persistent challenges – from addressing environmental issues to rejuvenating deteriorating infrastructure in both developed and developing nations, as well as ensuring national security and fueling innovation for economic growth – don't have straightforward solutions.

Instead, they demand the thoughtful allocation of time and money," state Victoria Ivashina and Josh Lerner, professors at Harvard Business School.

The authors illustrate the concept of patient capital by referring to the wealth of the Rockefeller family. John D. Rockefeller, the family's leader, turned a $4,000 investment in the Standard Oil oil refinery into the initial foundation of the family's immense wealth.

Over two generations, notably under the leadership of his grandchildren, especially Laurance, long-term capital contributed to the development of various endeavors.

These included the formation of Eastern Air Lines, carved out from General Motors, the establishment of the military contractor McDonnell Aircraft Corp., which was eventually merged into Boeing Co., the promotion of tourism and protection in the U.S. Virgin Islands, including the creation of the exclusive and eco-friendly Caneel Bay resort on St. John Island, and crucial funding for the expansion of national parks in the United States.

Ivashina and Lerner elaborate on how this type of capital, known as patient or long-term capital, implies that investors, such as the Rockefeller family, are prepared to wait for returns over decades.

Governments cannot often finance these projects due to political constraints. However, when aligned with the right entities, aggregations of capital from sources like pension funds, insurers, sovereign wealth funds, endowments, and family holdings can effectively undertake these tasks. The authors contend that these strategic partnerships can benefit investors, fund managers, and society.

Best Book About Investing Gone Awry: The Billionaire's Apprentice

This book, which reads like a gripping thriller, delves into several key aspects:

  • The rapid rise of the South Asian diaspora in the United States and their growing influence in various sectors, including business and professions.
  • The influx of South Asian immigrants to the United States after 1965, when immigration laws were relaxed, led to a significant demographic shift.
  • This narrative is reminiscent of Othello and Iago, featuring two prominent Indian immigrants. Rajat Gupta, playing the role of Othello, was the leader of McKinsey and Co. At the same time, Raj Rajaratnam, embodying Iago, was a mathematical genius from Sri Lanka who headed the Galleon Hedge Fund and achieved billionaire status.
  • The eventual downfall of these two individuals resulted in prison sentences for both due to convictions related to insider trading.

Author Anita Raghavan paints a picture of Rajaratnam as the "wealth king" and Gupta as the "thought king." The book's title reflects Gupta's aspiration to achieve billionaire status after working at McKinsey for thirty years, where he earned a million-dollar salary.

When they were arrested and taken to court by Preet Bharara, an Indian-born U.S. Attorney for the Southern District of New York, some onlookers saw their legal troubles as having a potentially adverse impact on the growing South Asian community.

Raghavan, with South Asian roots and a track record of contributions to publications like The New York Times, The Wall Street Journal, and Forbes, highlights that while the Gupta-Rajaratnam affair is a part of the South Asian experience, it doesn't represent the entire community's story.

In "The Billionaire's Apprentice," she wraps up the book with a surprising revelation about the Gupta family that hints at Rajat Gupta's wrongdoings.

Best Book on Day Trading: The Ultimate Day Trader

In the first chapter of "The Ultimate Day Trader" by Jacob Bernstein, both seasoned investors and beginners are introduced to the world of day trading. This chapter, titled "Definitions and Directions—What It Means to Day Trade Today," sets the stage for the journey into day trading.

He provides a comprehensive introduction to the concept of day trading, emphasizing that a day trader is an individual who enters and exits positions in the financial markets within the same trading day. It's worth noting that the trading day now extends around the clock due to the availability of 24-hour trading in many markets.

Bernstein outlines 11 reasons people engage in day trading, including the potential for reduced headline risk, the ability to see results by the end of the day, access to reliable forecasting, instant execution opportunities, market volatility, and the sheer satisfaction of participating.

However, he also highlights the challenges of day trading, such as the demanding nature of the work, susceptibility to unpredictable events affecting prices, the time-consuming nature of the endeavor, fierce competition, and the inherent stress associated with day trading.

As the founder of Bernstein Investments Inc. and the author of 35 books covering topics such as trading, investor psychology, and economic forecasts, including "The Compleat Day Trader," Bernstein brings his expertise to guide readers through the world of day trading. He employs a clear and accessible writing style and complements his explanations with charts and graphs.

The book covers various aspects of day trading, including market methods, gap day trading, volume spikes in day trading, the importance of a structured approach, exit strategies, and the "10 Cardinal Rules of Day Trading."

Among these cardinal rules are the importance of thorough research, maintaining consistency, avoiding markets that make you uncomfortable, and being prepared to make significant moves to generate profits.

Towards the end of the book, Bernstein challenges readers to assess whether they possess the qualities necessary to become successful day traders, such as the ability to accept losses and move forward. He encourages you to embark on your day trading journey if you meet these criteria.

Best on the Thinking Behind Money and Investing: The Psychology of Money

Morgan Housel's book takes readers on an engaging journey through 19 short chapters, exploring how people think about money and its behavioral psychology. Throughout the book, Housel delves into these interesting aspects and offers practical advice on achieving financial security.

One noteworthy concept he presents is staying wealthy rather than solely aiming to become wealthy. To illustrate this point, he uses the life and philosophy of Warren Buffett, the Chairman and CEO of Berkshire Hathaway, who started investing at a young age and values making money while leading a relatively modest lifestyle.

Housel argues that the true purpose of having money is the freedom it provides to make choices that lead to happiness. He sees this as the most significant dividend that money can yield.

While Housel holds a critical view of Benjamin Graham's "The Intelligent Investor," which he considers outdated for modern investors, the rest of his advice is deemed excellent and valuable.

The book also touches on key financial topics that are both unexpected and enjoyable to contemplate. It discusses the success stories of individuals like Warren Buffett and Bill Gates.

It attributes their achievements to intelligence and factors like time utilization and fortunate circumstances, such as early computer access. The book offers a fresh perspective on how people can approach and think about money and wealth, providing readers with valuable insights into their financial lives.

Best Investing How-To Book: The Only Investment Guide You'll Ever Need

The Los Angeles Times described Andrew Tobias's investment book as living up to its bold title, and the book has been continuously revised since its initial publication in 1978, with the latest update in 2022.

In this latest revision, the best-selling author provides insights into the economic impacts of the COVID-19 pandemic and the experiences of investors and taxpayers during the Trump administration and preceding ones.

With a combination of knowledge and humor, Tobias guides readers through the fundamentals of various investment options, including stocks, bonds (such as savings, municipal, corporate, convertible, and zero-coupon), mutual funds, U.S. Treasury bills, exchange-traded funds (ETFs), and different types of retirement accounts. He also delves into tax strategies and offers advice on selecting and working with brokers.

Tobias suggests a stock market strategy involving placing most of your savings in mutual funds and ETFs, with no more than 20% allocated to funds you manage directly.

Throughout the book, he takes on the persona of a wise and affluent relative, particularly evident in the chapter titled "A Penny Saved is Two Pennies Earned."

Here, he provides practical financial advice on topics ranging from credit cards and cost-effective vacation planning to bank account management and the choice of cubic zirconium jewelry over diamonds, which he considers extravagant.

In the appendices, Tobias addresses various financial subjects, including Social Security, life insurance, saving money through bulk wine purchases, the national debt, and recommendations for discount brokers.

The book has received high praise from billionaire entrepreneur Mark Cuban, who found it to be the only investment book that makes sense.

FINAL VERDICT

"The Bond King," authored by Mary Childs, a journalist and podcaster for NPR's "Planet Money," is our top recommendation among investment books.

This captivating story explores the life of Bill Gross, who was once part of PIMCO, offering insights into the behind-the-scenes world of Wall Street. It also shows how someone can be pushed out of a company they played a role in building but still accumulate a personal fortune of $2.6 billion.

Written by Sauravsingh

Techpreneur and adept trader, Sauravsingh Tomar seamlessly blends the worlds of technology and finance. With rich experience in Forex and Stock markets, he's not only a trading maven but also a pioneer in innovative digital solutions. Beyond charts and code, Sauravsingh is a passionate mentor, guiding many towards financial and technological success. In his downtime, he's often found exploring new places or immersed in a compelling read.

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