Over the years, I've read many stock investment books related to trading and investing.
Like many other keen beginners who are looking to increase their knowledge in the Singapore stock market, I would go to the bookstore and pick up the first book that catches my eye with an interesting title and an attractive book cover.
The books I bought are usually priced around $30 and above. Overtime, I find that I do not derive much value from many of the books that I purchased.
Similar to picking the best stocks to buy, only a small percentage is worth reading and buying a copy to keep. Now with more experience, I approach book buying the same way I would in a stock investment.
Buying investment books the same way as I would in buying stocks
When I'm at the bookstore and I see a book that interest me, I would scan the table of contents, pick a chapter of interest to me and have a quick read. If the chapter captivates me, I'll go online to the local library's website to see if there are copies available for loan; sort of like a trial since I can borrow a book for 2 weeks at a time.
After reading the book in more detail, I will tend to either leave it lying around the house and return the book sooner than the due date or I will find myself referring back to the contents of the book frequently. In the latter case, I would buy a copy of the stock investment book eventually. I have done my due diligence and it should be a good investment.
Below are some of the books that I own and recommend to readers according to the level of investing experience.
These stock investment books that I recommend have been and are still my 'mentors'. I have read the books more than a dozen times combined. Not from page to page after the initial read but more for reference; guiding posts to bring me back to the right path when I'm lost while trying to figure things out.
Talk about diversification, Peter Lynch held 1400 stocks in his fund at one point in his career as a consistent profitable fund manager with Fidelity Investments. I learn about important fundamental aspects that fund managers care about and that's important because they are the ones with the money to move markets. I think the most useful tip I got out of the book is to look at the businesses around you. I have invested in companies that I encounter in everyday life. Think mailboxes, telephone services, TV cable services, the massage chair company, the pawnshops, etc.
Nicholas Darvas is probably the only non-professional stock market participant in his time to trade successfully while holding a full time job as a dancer. Although not obvious in his book, he took close to 5 years to develop his 'box' method that made him $2 million from the stock market. His book has a great influence on how I use technical analysis even till today.
I still remember the first time I read this book was a few weeks before the 2008-2009 financial crisis. I learnt that when a few 'distribution days' occurs within a span of a few weeks, there's a good chance of the market going into a corrective phase. Being a newbie on technical analysis at that time, I followed the CANSLIM method and sold all my stocks. Call it beginner's luck, I got out before the stock market tanked. This book made me a firm believer in combining fundamental analysis with technical analysis.