Investing Books

I finished reading Phil Town's "Rule #1" and while I'm still struggling with some of the technical analysis he talks about (I'm trying to figure out how to program the signals and back-test), I think it's a pretty sound approach and is very close to what I do in terms of stock selection. Again, I'm withholding judgment on the technical analysis/trading section of the book because I'm not sure it works in most of the cases I've examined for the stocks I select, but I'm still investigating.

With the addition of this book, I figured I'd list my favorite investing books. I don't think I've posted this before, but I found the following books to have been very useful for me in learning to invest.

Buffettology - Mary Buffett and David Clark. I've worn the library out reading my fair share of investing books, but this book contains much of the basis for how I value companies. It emphasizes consistency, predictability, and valuation. Maybe it was the culmination of alot of other things I'd read, but as I worked through Buffettology I had one of those "aha" moments that underlies much of my thinking about investments.

One Up on Wallstreet - Peter Lynch. I haven't read this one in a long time, but it did a great job of educating me back in college when I was starting out. Lots of real-life examples in here.

A Random Walk Down Wallstreet - Burton Malkiel. Another college read. Anybody who's picking stocks is trying to do what this book says can't be done, but it's good to see where the efficient market hypothesis is coming from, and why low cost indexing is so successful.

Super Stocks - Kenneth Fisher. I read this back in the mid-90s and found it valuable in evaluating fast growing tech companies that don't yet have earnings but have some type of competitive moat. If you're into tech stocks this is a must read imho.

The Gorilla Game - Geoffrey Moore. Another must read for tech investors. What produces a sustainable long term advantage when thinking about technology stocks? The book fails to aid us in valuing technology Gorilla companies and alot of Gorilla gamers got hurt in the tech bubble bust as a result, but I like the way of thinking about how network effects contribute to competitive advantage.

Rule #1 - Phil Town. I just read this one, but it's gotta go on the list as it's so close to what I do. Not sure about the technical analysis pieces, but this method will turn up a lot of the same companies I invest in.

The Millionaire Next Door. Thomas J. Stanley and William D. Danko. The authors made a career out of studying millionaires. They find that often the secret to accumulating wealth is not how much you make, but simply living within your means. Great read.

Manias, Panics and Crashes. Charles Kindleberger. They're hard to spot when you're in them and they can persist, but this book helps us understand bubbles.