Interesting Investment Books

"Winning the Loser's Game is considered by many to be a classic analysis of investing." ­­Financial Planning The premise of the bestselling Winning the Loser's Game­­that individual investors can achieve far greater success working with financial markets than against them­­has grown increasingly popular in today's hard-to-predict markets. The latest edition of this concise yet comprehensive classic offers updated strategies to leverage the power of time and compounding, protect against down cycles, and more.

This classic book secured Benjamin Graham's status as a Wall street immortal. the carefully honed methods for finding undervalued stocks and bonds he described here have never been equaled, and have already outlived their author by more than 20 years. Even as Security Analysis has gone through five editions and nearly a million copes, you can learn time-tested investment secrets and strategies by going back to the source - THE ORIGINAL - and paying close attention to its wisdom. Written just five years after the crash, Security Analysis's message today is just as vivid, just as lucid, and just as vital as it was in 1934.

With an insider's view of the mind of the master, Mary Buffett and David Clark have written a simple guide for reading financial statements from Warren Buffett's succccessful perspective.Buffett and Clark clearly outline Warren Buffett's strategies in a way that will appeal to newcomers and seasoned Buffettologists alike. Inspired by the seminal work of Buffett's mentor, Benjamin Graham (The Interpretation of Financial Statements, 1937), this book presents Buffett's interpretation of financial statements with anecdotes and quotes from the master investor himself. Potential investors will discover: • Buffett's time-tested dos and don'ts for interpreting an income statement and balance sheet • Why high research and development costs can kill a great business • How much debt Buffett thinks a company can carry before it becomes too dangerous to touch • The financial ratios and calculations that Buffett uses to identify the company with a durable competitive advantage -- which he believes makes for the winning long-term investment • How Buffett uses financial statements to value a company • What kinds of companies Warren stays away from no matter how cheap their selling price Once readers complete and master Buffett's simple financial calculations and methods for interpreting a company's financial statement, they'll be well on their way to identifying which companies are going to be tomorrow's winners -- and which will be the losers they should avoid at all costs. Destined to become a classic in the world of investment books, Warren Buffett and the Interpretation of Financial Statements is the perfect companion volume to The New Buffettology and The Tao of Warren Buffett.

Mutual-fund superstar Peter Lynch and author John Rothchild explain the basic principles of the stock market and business in an investing guide that will enlighten and entertain anyone who is high-school age or older.Many investors, including some with substantial portfolios, have only the sketchiest idea of how the stock market works. The reason, say Lynch and Rothchild, is that the basics of investing—the fundamentals of our economic system and what they have to do with the stock market—aren’t taught in school. At a time when individuals have to make important decisions about saving for college and 401(k) retirement funds, this failure to provide a basic education in investing can have tragic consequences. For those who know what to look for, investment opportunities are everywhere. The average high-school student is familiar with Nike, Reebok, McDonald’s, the Gap, and the Body Shop. Nearly every teenager in America drinks Coke or Pepsi, but only a very few own shares in either company or even understand how to buy them. Every student studies American history, but few realize that our country was settled by European colonists financed by public companies in England and Holland—and the basic principles behind public companies haven’t changed in more than three hundred years. In Learn to Earn, Lynch and Rothchild explain in a style accessible to anyone who is high-school age or older how to read a stock table in the daily newspaper, how to understand a company annual report, and why everyone should pay attention to the stock market. They explain not only how to invest, but also how to think like an investor.

Warren E. Buffett first took control of Berkshire Hathaway Inc., a small textile company, in April of 1965. A share changed hands for around $18 at the time. Fifty letters to shareholders later, the same share traded for $226,000, compounding investor capital at just under 21% per year-a multiplier of 12,556 times. This limited "50th Anniversary" hardcover edition is a dust-jacket-less midnight black with gold embossing. Like the paperback version, it compiles the full, un-edited versions of every one of Warren Buffett's letters to the shareholders of Berkshire Hathaway. There are hundreds of books about Buffett's life, advice, and methods. These are his actual letters -- word for word -- a "lesson plan" of his views on business and investing. You can find most of the letters for free on Berkshire's website, but this compiles them into a well-designed, easily readable format. Features of the book: * 50 years of Warren Buffett's letters to the shareholders of Berkshire Hathaway (769 pages) * Tabulated letter years so you can easily flip to the desired letter * Topics index * Company index * Person index * Charts of: Growth in Berkshire's book value and market price relative to benchmarks, Insurance float and performance, the operating businesses of Berkshire

First published in 1968, translated into 30 languages, and hailed by Nobel Prize winning economist Paul Samuelson as "a modern classic", this extraordinary piece of New Journalism about the go-go years of Wall Street in the 1960s is, in the words of its true author, George Goodman, "a book about image and reality and identity and anxiety and money." As timely and relevant to investors today as it was to those of the Vietnam era, it contains lucid insights into everything from technical analysis and efficient market theory to Random Walks, crowd psychology, and what precipitates a market meltdown.

Charlie Munger, Berkshire Hathaway's visionary vice chairman and Warren Buffett's indispensable financial partner, has outperformed market indexes again and again, and he believes any investor can do the same. His notion of "elementary, worldly wisdom"--a set of interdisciplinary mental models involving economics, business, psychology, ethics, and management--allows him to keep his emotions out of his investments and avoid the common pitfalls of bad judgment.Munger's system has steered his investments for forty years and has guided generations of successful investors. This book presents the essential steps of Munger's investing strategy, condensed here for the first time from interviews, speeches, writings, and shareholder letters, and paired with commentary from fund managers, value investors, and business-case historians. Derived from Ben Graham's value-investing system, Munger's approach is straightforward enough that ordinary investors can apply it to their portfolios. This book is not simply about investing. It is about cultivating mental models for your whole life, but especially for your investments.

The world-renowned economist offers "dourly irreverent analyses of financial debacle from the tulip craze of the seventeenth century to the recent plague of junk bonds."—The Atlantic.

This book is about 100-baggers. These are stocks that return $100 for every $1 invested. That means a $10,000 investment turns into $1 million. Chris Mayer can help you find them. It sounds like an outrageous quest with a wildly improbable chance of success. But when Mayer studied 100-baggers of the past, definite patterns emerged. In 100-Baggers, you will learn: -The key characteristics of 100-baggers -Why anybody can do this (It is truly an everyman's approach. You don't need an MBA or a finance degree. Some basic financial concepts are all you need.) -A number of crutches or techniques that can help you get more out of your stocks and investing The emphasis is always on the practical, so there are many stories and anecdotes to help illustrate important points. You should read this book if you want to get more out of your stocks. Even if you never get a 100-bagger, this book will help you turn up big winners and keep you away from losers and sleepy stocks that go nowhere. After reading 100-Baggers, you will never look at investing the same way again. It will energize and excite you about what is possible.

Warren Buffett built Berkshire Hathaway into something remarkable— and Fortune journalist Carol Loomis had a front-row seat for it all. When Carol Loomis first mentioned a little-known Omaha hedge fund manager in a 1966 Fortune article, she didn’t dream that Warren Buffett would one day be considered the world’s greatest investor—nor that she and Buffett would quickly become close personal friends. As Buf­fett’s fortune and reputation grew over time, Loomis used her unique insight into Buffett’s thinking to chronicle his work for Fortune, writ­ing and proposing scores of stories that tracked his many accomplishments—and also his occa­sional mistakes. Now Loomis has collected and updated the best Buffett articles Fortune published between 1966 and 2012, including thirteen cover stories and a dozen pieces authored by Buffett himself. Loomis has provided commentary about each major arti­cle that supplies context and her own informed point of view. Readers will gain fresh insights into Buffett’s investment strategies and his thinking on management, philanthropy, public policy, and even parenting. Some of the highlights include:The 1966 A. W. Jones story in which Fortune first mentioned Buffett. The first piece Buffett wrote for the magazine, 1977’s “How Inf lation Swindles the Equity Investor.” Andrew Tobias’s 1983 article “Letters from Chairman Buffett,” the first review of his Berk­shire Hathaway shareholder letters. Buffett’s stunningly prescient 2003 piece about derivatives, “Avoiding a Mega-Catastrophe.” His unconventional thoughts on inheritance and philanthropy, including his intention to leave his kids “enough money so they would feel they could do anything, but not so much that they could do nothing.” Bill Gates’s 1996 article describing his early impressions of Buffett as they struck up their close friendship. Scores of Buffett books have been written, but none can claim this work’s combination of trust between two friends, the writer’s deep under­standing of Buffett’s world, and a very long-term perspective.

In The Little Book That Builds Wealth, author Pat Dorsey--the Director of Equity Research for leading independent investment research provider Morningstar, Inc.--reveals why competitive advantages, or economic moats, are such strong indicators of great long-term investments and examines four of their most common sources: intangible assets, cost advantages, customer-switching costs, and network economics. Along the way, he skillfully outlines this proven approach and reveals how you can effectively apply it to your own investment endeavors.

Financial Shenanigans is by Howard Schilit, president of the Center for Financial Research and Analysis. It is a very readable step-by-step guide to detecting fraud by reading financial statements.Most of the big corporate scandals in the past few years have been in one way or another accounting scandals. Either accounting was the primary method of committing fraud, or else accounting was used to cover up other malfeasance. Schilit identifies seven "shenanigans" and the ways they are typically performed. They are:1. Recording revenue too soon or of questionable quality2. Recording bogus revenue3. Boosting income with one-time gains4. Shifting a current expense to a later or earlier period5. Failing to record or improperly reducing liabilities6. Shifting current revenue to a later period7. Shifting future expenses to the current period as a special chargeAll of this has to do with accounting arcana, which is what makes these kinds of scandals so opaque to the public. The public understandably doesn’t understand what's been done, much less how anyone was hurt by it. One misunderstanding that one sees in newspapers occasionally is what a reserve is, and why not having one or underestimating one is bad. The impression given is that reserves are actual money--rainy day funds to pay for future litigation or bad debt.That's why a readable book like this is useful. It really goes into accounting detail, and explains what the various financial statements are, and how to read them. It gives lots of examples of specific companies caught engaging in specific shenanigans. (Some, like Sunbeam, seems to have engaged in about every kind of shenanigan possible.) He always shows stock price graphs so one can see what the result is to equity when the chickens come home to roost. (He also uses the graphs as a way to brag on the CFRA's ability to see trouble early. They always seem to issue warnings well before the shenanigan is discovered. But, Cassandra-like, their warnings are ignored by investors. If their record at detecting shenanigans is so good, you would expect stock prices to drop every time they issue a warning on a company. Hmm.) Occasionally he offers a pungent detail or two on the company's story, but it would be better if he gave a little more--like this executive went to jail, or that executive was forbidden by the SEC to ever run a publicly traded company again, etc.I think this would be a good book for undergraduate and graduate business students, especially those interested in becoming analysts. Aside from giving a lot of practical advice, it would be an entertaining counterweight to the (let's face it) fairly tedious accounting textbooks that one necessarily has to read.

Investors are all too often lured by the prospect of instant millions and fall prey to the many fads of Wall Street. The myriad approaches they adopt offer little or no real prospect for long-term success and invariably run the risk of considerable economic loss - they resemble speculation or outright gambling, not a coherent investment program. But value investing - the strategy of investing in securities trading at an appreciable discount from underlying value - has a long history - has a long history of delivering excellent investment results with limited downside risk. Taking its title from Benjamin Graham's often-repeated admonition to invest always with a margin of safety, Klarman's 'Margin of Safety' explains the philosophy of value investing, and perhaps more importantly, the logic behind it, demonstrating why it succeeds while other approaches fail. The blueprint that Klarman offers, if carefully followed, offers the investor the strong possibility of investment success with limited risk. 'Margin of Safety' shows you not just how to invest but how to think deeply about investing - to understand the rationale behind the rules to appreciate why they work when they work, and why they don't when they don't.

The Little Book of Valuation by Aswath Damodaran gives comprehensive overview of factors that needs to be taken into account for valuation of a company while investing. The book gives immense value in terms of understanding valuation of a company.Value investing is the discipline of buying securities at significant discount from their current values and holding them until more of their values is realized. Valuing a company/business is the most important aspect of investing. It’s a daunting task. The complexities/variables involved in business are enormous. While precision is a good measure of process in mathematics or physics, it is poor measure of quality in valuation. It's better to be vaguely right then precisely wrong while valuing a company.There are far many uncertainties involved in valuation. Macroeconomic factors, regulations, interest rate, competition, innovation these things cannot be predicted with accuracy. Even if one can accurately predict macroeconomic factors, there are far too many other factors/variables involved. Therefore, its aptly said that success in investing comes not from being right but from being wrong less often than everyone else. Understanding valuation is critical to be an informed and successful investor instead of being a speculator focusing merely on price fluctuations. Basically there are two approaches for valuation i.e. Intrinsic and relative. In intrinsic valuation, the value of an asset is determined by the cash flows that one expects to generate over its life and how uncertain one feel about the cash flows. Assets with high and stable cash flows should be more valuable than assets with low and volatile cash flows. In relative valuation assets are valued by looking at how the market prices similar assets. It’s like while determining what to pay for a house, one looks at what similar houses in the neighborhood sold for. With a stock it means comparing its prices to similar stocks in its peer group. Both the approaches i.e. intrinsic as well as relative valuation plays a critical role in picking a sound stocks.Valuing growth companies requires a different approach as compared to valuing a mature company with substantial market size. Both scale and competition conspires to lower growth rates quickly at even the most promising growth companies. Various valuation matrices can be used i.e. Book value, Earnings Price Ratio, Price to Book Value, Price Earnings Growth ratio, Return on Invested Capital to understand valuation of a company. These figures give sense about the quantitative aspect of valuing a business, whereas qualitative aspects of valuing a business i.e. quality of the management are much difficult to assess. The quality of the management is also critical as the management directly controls the company not the shareholders.Also one needs to be aware of cognitive biases in the market. With professional analysts, there are institutional factors that add to substantial bias. Equity research analyst issue more buy than sell recommendations. It’s important to do background research on the company to information sources rather than opinion sources. One should spend more time looking at a company’s financial statements than reading equity research reports about the company. Psychological studies have shown that a loss hurts twice as much as a gain of the same amount makes us happy as people gets hurt losing money much more than they enjoy making money. It leads to panic sales of selling low because investors sell in fear that the stock market will fall more. But for a value investor who is aware of such psychological factors will use it to buy value stocks at bargain price/ extremely cheap price. Therefore, it's important to understand this loss aversion theory as well as the prospect theory.It is also important to understand the difference between volatility and risk. Volatility is price fluctuations whereas risk is business fluctuations. By focusing on keeping the risk minimal, one can find investment that have low or even no risk and offer extremely positive returns. Volatility is a friend of the value investors, understanding of risk and volatility will lead to better investing decision.It's important to understand the book value, liquidation value, intrinsic value etc. Intrinsic value is different from book value. The change in the book value in one year or over a period of time tells how much the intrinsic value of the business has changed. Return on investment capital is also extremely important to factor in a business that manages to compound its capital at a high return will definitely do well over a long period of time. The margin of safety in terms of both price as well as business is also extremely important.The Little Book of Valuation by Aswath Damodaran is an insightful book, very much recommended for anyone learning investing.

Two years in MBA school won't teach you how to double the market's return. Two hours with The Little Book That Beats the Market will. In The Little Book, Joel Greenblatt, Founder and Managing Partner at Gotham Capital (with average annualized returns of 40% for over 20 years), does more than simply set out the basic principles for successful stock market investing. He provides a "magic formula" that is easy to use and makes buying good companies at bargain prices automatic. Though the formula has been extensively tested and is a breakthrough in the academic and professional world, Greenblatt explains it using 6th grade math, plain language and humor. You'll learn how to use this low risk method to beat the market and professional managers by a wide margin. You'll also learn how to view the stock market, why success eludes almost all individual and professional investors, and why the formula will continue to work even after everyone "knows" it.

The heart of this book is chapters 12-14. Chapter 12 is titled "Give the Company a Physical" and shows you how to examine the balance sheet. The important ratios here are:1. The current ratio - Current assets over Current liabilities - look for a figure greater than 22. The quick ratio - same thing minus the inventory3. Shareholder equity (book value)- Total assets (less intangibles) minus total liabilities4. Debt to equity ratio - Total debt over Shareholders equity - look for numbers < 1 - the lower the number the betterChapter 13 is titled "Physical Exam Part II" and examines the income statement. 1. Look for growing revenues ( sales)- top line2. Gross Profit - Sales minus COGS3. Gross profit margin - Gross profit over Revenue - look for stability4. EPS - net profit divided by shares outstanding5. ROC - Earnings divided by beginning of the year's capital (stockholder's equity plus debt)6. A low P/E relative to industry and marketChapter 14 is titled Send Your Stocks to the Mayo Clinic. Her he gives you 16 additional questions to ask about your company. You have to get the book to see the questions.This book gave me the idea to create a spread sheet with info that I gathered from the book. The following is the one I did on Intel. INTEL Shares Outstanding 4,980 Price per share 24.26 Market Capitalization $120,815 Earnings per share 2.0 TOTAL ASSETS 83083 NET WORTH ( SHAREHOLDERS EQUITY) 51,194 Intangibles 15563 Total Liabilities 31889 Book Value per Share $7.15 Price to Book value per share ratio Selling for 3 times the amount company can be sold forPrice to Earnings per share ratio Selling for 12.1 times earningsCurrent Assets 28677 Total Current Liabilities 11798 Net Current Assets (Graham's number) $16,879 Net Current Assets per share $3.39 Price to net current assets per share ratio Selling for 7.2 times net current assetsTotal Assets 83083 Total Debts 31889 Assets to Debt ratio 2.6

A comprehensive value investing framework for the individual investor In a straightforward and accessible manner, The Dhandho Investor lays out the powerful framework of value investing. Written with the intelligent individual investor in mind, this comprehensive guide distills the Dhandho capital allocation framework of the business savvy Patels from India and presents how they can be applied successfully to the stock market. The Dhandho method expands on the groundbreaking principles of value investing expounded by Benjamin Graham, Warren Buffett, and Charlie Munger. Readers will be introduced to important value investing concepts such as "Heads, I win! Tails, I don't lose that much!," "Few Bets, Big Bets, Infrequent Bets," Abhimanyu's dilemma, and a detailed treatise on using the Kelly Formula to invest in undervalued stocks. Using a light, entertaining style, Pabrai lays out the Dhandho framework in an easy-to-use format. Any investor who adopts the framework is bound to improve on results and soundly beat the markets and most professionals.

In the world of investing, the name Warren Buffett is synonymous with success and prosperity—now you can learn how Warren Buffett did it and how you can, too.Building from the ground up, Buffett chose wisely and picked his stocks with care, in turn amassing the huge fortune for which he is now famous. Mary Buffett, former daughter-in-law of this legendary financial genius and a successful businesswoman in her own right, has teamed up with noted Buffettologist David Clark to create Buffettology, a one-of-a-kind investment guide that explains the winning strategies of the master. -Learn how to approach investing the way Buffett does, based on the authors' firsthand knowledge of the secrets that have made Buffett the world's second wealthiest man -Use Buffett's proven method of investing in stocks that will continue to grow over time -Master the straightforward mathematical equipments that assist Buffett in making investments -Examine the kinds of companies that capture Buffett's interest, and learn how you can use this information to make your own investment choices of the future Complete with profiles of fifty-four "Buffett companies"—companies in which Buffett has invested and which the authors believe he continues to follow—Buffettology can show any investor, from beginner to savvy pro, how to create a profitable portfolio.