The 5 Best Books on Stock Investing

These are the best books ever written on the subject of stock investing.

#1. How I Made $2,000,000 in the Stock Market by Nicolas Darvas

The reason I rank this book as the best ever written in stocks is because of its authenticity and scientific journaling.  Darvas was a trained economist, journalist, and athlete.

He documented every trade.

This allowed me to verify the risk parameters he used to convert $36,000 into $2,500,000 in 6.5 years.  The book is of such importance that I have created a free course to help you understand this thinking.

His application of concentration, rather than diversification, is similar to the Kelly formula extensions to Buffet and Mohnish in their value investing.  The lesson of these three men is that concentration, not diversification, leads to exceptional returns.

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#2. Reminiscences of a Stock Operator by Edwin LeFevre

This book drills in the importance of risk controlJesse Livermore never used stops and went bankrupt 3 times.  He ended his life broke with a bullet to his brain pan by his own had.  This contrasts starkly with Nicolas Darvas who used stops (limit stop loss orders) to profitably trade stock throughout his life.

W.D. Gann is another trader whose books are a treasure trove to advanced investors and traders.

Livermore’s sloppy trading wiped out the brokerage and Gann who was a client.  Gann had to start over due to Jesse Livermore’s negligence. Read this book to fathom the perils of gambling in the stock market.

#3. John Bogle on Investing: The First 50 Years by John Bogle

There are only two approaches to stocks.  The first is to concentrate on the fastest rising stock you can find.

The other approach involves diversification.

John Bogle proved to the world that the only form of intelligent diversification is through an index mutual fund or index ETF.

This book drills in the importance of index diversification that you are forced to employ in an employer sponsored 401(k).

#4. The Essays of Warren Buffet by Lawrence Cunningham

Only one true genius of stocks stands out. He is Warren Buffet. His mentor and Columbia finance professor Benjamin Graham extracted double digit returns as did his student Buffet.

But for three consecutive decades before.

If you want to understand value investing, you have to start here.

This is a collection of his letters to Berkshire Hathaway shareholders.

Engineer Mohnish Prabai used these letters to map out exactly what Buffet does to build a hedge fund worth a half a billion dollars.

#5. The Dhandho Investor: The Low-Risk Value Method to High Returns

I have always considered the results of Warren Buffet to be non-reproducible.  Clemson trained engineer Mohnish Prabai carefully combed the letters to the shareholders of Warren Buffet.

This book outlines his journey that has built his now famous and large hedge fund that replicates Warren Buffet methodologies.

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