Recommended Books

Investment books provide great insight of great investors, traders and speculators both decades ago and relatively current. Some I highly recommend are:

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

Nicolas Darvas was a champion ballroom dancer in 1952 who decided to get into the market. He developed his own system for growth investing and fine-tuned it to achieve the result in the title. It’s a fun read, full of his personality and with enough reversals, eccentricities and breakthroughs to keep you interested while you’re learning more than you realize about technical analysis and portfolio management. It’s a great story.

In his book, Nicholas Darvas relates how he combined both fundamental and technical analysis to select the best stocks. Darvas realized early on the power of investment themes and knew the importance of finding the next big thing. Darvas knew that having the right idea would attract the most investors to a stock and subsequently boost share price, but he also knew that it was important to leave emotions at the door. Darvas knew the importance of this investing maxim: Don’t fall in love with your stocks! Darvas details how he made $2 million in the stock market which would have been over $20 million today.

Frequently on the road, Darvas would have Barron’s shipped to him to see how various stocks had acted the previous week. Instead of reading through all the articles and opinions, he would simply throw everything away except for the quotes section. This way he could see what was happening in the market and make judgments without being influenced by news of the week. And it worked wonders!

My advice: Take a step back from the day-to-day news and gyrations. Instead, keep focused on the big picture. Yes, it’s fun and exciting to watch things unfold minute by minute. But I contend you’ll make more money by ignoring the loudmouths on TV and just staying focused on the major trends. Remember no one has ever gotten rich listening to anyone else.

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Reminiscences of a Stock Operator by Edwin Lefevre
If you consider yourself a student of the market, there is no better book than “Reminiscences of a Stock Operator.” This conversational biography of the exploits of Jesse Livermore contains more market lessons than any “how to” book available today … or ever. Divided into reasonably sized chapters, the book allows you to follow one of Wall Street’s all-time great speculators through his winnings and his many mistakes. I’ve read it many times .
In his 1940 book, How to Trade in Stocks, Jesse L. Livermore gives step-by-step guidance on reading market and stock behaviors, analyzing market sectors, market timing, money management and emotional control.

Livermore, an investing legend, said there are just a handful of times each year when he would be active—near the intermediate-term turning points in the market. Other than that, he let his account his idle, making sure he didn’t lose money, and preparing for the big swing when the market changed course.

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The Battle for Investment Survival by Gerald Loeb
In The Battle for Investment Survival, the turf is Wall Street, the goal is to preserve your capital at all costs, and to win is to “make a killing without being killed.” This memorable classic, originally written in 1935, offers a fresh perspective on investing from times past.

The Battle for Investment Survival treats investors to a straightforward account of how to profit—and how to avoid profit loss—in what Loeb would describe as the constant tug-of-war between rising and falling markets. Gerald M. Loeb worked on Wall Street as a stockbroker for 40 years, beginning in the late 1920s.

Loeb was also a financial writer whose articles were published in Barron’s, Wall Street Today and Investor Magazine.

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Winning on Wall Street by Martin Zweig
Financial adviser Martin Zweig has been fascinated by the stock market since childhood, especially the buying and selling of stocks to make money.

The book contains a clear and detailed analysis of market trends, interest rates, Federal Reserve policy, debt volume and market momentum, among other things, that carries the technical side of stock market theory about as far as it can go. In the book, Zweig calls Jesse L. Livermore on of his heroes and recommends the 1923 book, Reminiscences of a Stock Operator by Edwin Lefevre.

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Tape Reading and Market Tactics
The Three Steps to Successful Stock Trading by Humphrey Neill
Humphrey Neill, who later became famous as the Vermont Ruminator, wrote this book in 1931 when he was vice president of Westel Market Bureau, Inc. Neill’s three steps to successful trading are: (1) Familiarize yourself with the methods of the institutions that move the market. (2) Learn how to interpret the actions of both these groups and the investing public. (3) Achieve mastery of yourself; of the “temperament, emotions, and the other variables that go to make up human nature.” The biggest obstacle to successful trading is the inability to cut losses short, as Neill said, “The one thing which retards success in trading, more than any other, is the unwillingness of many of us to accept losses, cheerfully and quickly, when we realize that we have misjudged the action of the market.”

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Market Wizards

New Market Wizards

Stock Market Wizards
by Jack Schwager

These books contain great interviews with a few dozen of the best investors in the world. All of the books are highly recommended, and each is available cheaply in paperback. You are guaranteed to learn some things, about the market and yourself.

New Market Wizards is the second in the three-book series in which Jack Schwager interviews top traders and investors, looking for insights. This book, originally published in the early 1990s, contains an interview with William Eckhardt, who was actually a mathematician. The interview touches on the personal side of investing and getting in tune with your own tendencies, which will help you make more money. The book contains many more helpful interviews and points.

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Being Right or Making Money by Ned Davis
One of the most highly regarded independent investment research firms, Ned Davis Research, shares not only its views on grave near-term economic risks and how the investment world works, but more importantly, it provides the tools, tactics and strategies necessary for managing risks and making money. A Phi Beta Kappa graduate of the University of North Carolina at Chapel Hill, who attended the Harvard Graduate School of Business, Ned Davis has been professionally involved in the stock market since 1966.

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Beware the Crowd at Extremes: The Importance of Contrary Opinion in the Stock Market by Ned Davis
(no image available, Out of Print)
Published in 2003, 108 years after LeBon’s seminal work, this is an easy read, full of modern references, charts and tables, and aimed directly at the moderately experienced investor who needs a little more guidance in learning to separate his own thoughts from those of the masses.  Independent thinking is critical for successful investing, and this book will help you develop your own.

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Hedgehogging by Barton Biggs
Hedgehogging is a book by Barton Biggs, a Morgan Stanley veteran who teamed up with a couple others to start his own hedge fund back in 2003.

Much of the book is indeed about his journey to starting a hedge fund, but really, to me, the first 100 pages or more were a bunch of two to four page short investment stories that related to people he knew in the business. You can often glean many lessons and insights from reading about others’ investment troubles (and successes).


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Inside the Investor’s Brain by Richard L. Peterson
Inside the Investor’s Brain provides investors with the tools they need to understand how emotions and mental biases affect the way they react to market movements and manage money. Richard Peterson provides readers with techniques for understanding their financial psychology, so that they can improve their performance.

Inside the Investor’s Brain discusses many mental traps and how they play a role in investing. This book contains descriptions of the work of neuroscientists, financial practitioners and psychologists, offering an expert’s view into the mind of the market.



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Invest Like a Shark by James DePorre
James DePorre lost his hearing, career and marriage in the early 1990s, and turned to online investing. His book details his investment strategy for average, individual investors.

DePorre explains his theory that small investors can beat the Whales of Wall Street by using speed and flexibility to their advantage. DePorre encourages investors to use their small size, quickness and aggressiveness to beat to outmaneuver investing giants.

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One Up on Wall Street by Peter Lynch
Peter Lynch writes about his theory that average investors can become experts in their field and pick winning stocks as well as Wall Street professionals just by doing some research.

The author says there are many investment opportunities for the average investor that can be found by observing business developments and taking notice of what’s going on in the world. He notes that investors will be rewarded in the long run if they ignore the fluctuations of the market and speculation about interest rates.

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Security Analysis by Benjamin Graham
Benjamin Graham’s classic book, Security Analysis, laid the framework for the value investing system. Individuals and Wall Street professionals consider the timeless book, published in 1934, an investing bible.

Security Analysis thoroughly explains Graham’s value investing methods, including how to value stocks, the margin of safety and guidelines for successful investing.


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The Crowd: A Study of the Popular Mind by Gustave LeBon
Gustave LeBon was a French psychologist/sociologist and this book, written in 1895 and translated into English a year later, is a classic today, well worth reading for the serious student of any social science.  Beware, though, that the book is not about investing; instead, it’s about the psychology of crowds, by the pioneer in the field.  To my mind, though, an understanding of the average man, and the crowd that he is part of, is a great advantage on Wall Street.  Substantially more accessible than “The Crowd,” and aimed at serious investors, is Beware the Crowd at Extremes by Ned Davis.

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The Intelligent Investor by Benjamin Graham
Benjamin Graham penned The Intelligent Investor in 1949, and the book has since been called “by far the best book on investing ever written,” by Warren Buffet, one of Graham’s students and followers.







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You Too Can Be a Stock Market Genius by Joel Greenblatt
Gotham Capital founder Joel Greenblatt is a legend among hedge fund managers for his fund’s two-decade run of 30% annualized returns. His 1999 book meant for the individual investor, You Too Can Be A Stock Market Genius, never caught on with the man on the street as he wished, but instead became the must-read tome among young hedge fund hotshots. Much of Greenblatt’s techniques are too complex to be of use to the individual investor, but his overall philosophy lends us a valuable nugget—there are stocks that are overlooked by the market for reasons not related to fundamentals—odd ducks that don’t attract analyst coverage and are unloved by the masses, at least for a time. These stocks provide a much higher chance of making money once the market recognizes their value.

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Way of the Turtle by Curtis Faith
“We’re going to raise traders just like they raise turtles in Singapore,” trading guru Richard Dennis reportedly said to his longtime friend William Eckhardt nearly 25 years ago. What started as a bet about whether great traders were born or made became a legendary trading experiment that, until now, has never been told in its entirety. Way of the Turtle reveals, for the first time, the reasons for the success of the secretive trading system used by the group known as the “Turtles.” Top-earning Turtle Curtis Faith lays bare the entire experiment, explaining how it was possible for Dennis and Eckhardt to recruit 23 ordinary people from all walks of life and train them to be extraordinary traders in just two weeks.

Only 19 years old at the time—the youngest Turtle by far—Faith traded the largest account, making more than $30 million in just more than four years. He takes you behind the scenes of the Turtle selection process and behind closed doors where the Turtles learned the lucrative trading strategies that enabled them to earn an average return of more than 80 percent per year and profits of more than $100 million. Offering his unique perspective on the experience, Faith explains why the Turtle Way works in modern markets, and shares hard-earned wisdom on taking risks, choosing your own path and learning from your mistakes.

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Technical Analysis of Stock Trends by Edwards and Magee.
This is considered the Bible for technical analysis and is a must read for understanding price and volume.









Some of the other books I have in my trading library are:

Baruch My own Story, The Art of Speculation, Point and Figure Analysis, Extraordinary Popular Delusions and the Madness of Crowds(1841), Stan Weinsteins Secrets for Profiting in Bull and Bear Markets, The Encyclopedia of Technical Market Indicators, Truth of the Stock Tape, The Art of Contrary Thinking, Trading Rules, A Complete Guide to Trading Profits, Stock Market Logic, and Technical Analysis Explained.

These are by far the books that every serious student of the market will read, study, and learn.  Markets never repeat themselves, but they often rhyme.