Every Shareholder Should Read This Now

If 2008 taught me anything, it's that I'm not nearly as smart as I think I am -- and neither is anyone else.

I suspect my old man has known this for years. After all, he's spent his life with his nose buried in one book after another, trying to learn everything he can about -- well, everything. Right now I'm wishing I'd followed his lead.

See, if I'd been reading everything I could get my hands on last year -- including the dire predictions of "Dr. Doom" Nouriel Roubini -- instead of gloating about near triple-digit gainers like Freeport-McMoRan (NYSE: FCX  ) and Transocean (NYSE: RIG  ) (which are now both down double digits), my portfolio would probably be in much better shape.

Heck, even my "rock-solid" dividend-paying blue chips are getting pummeled.

Stock

My Total Return

Altria (NYSE: MO  )

(27%)

AT&T (NYSE: T  )

(29%)

Coca-Cola (NYSE: KO  )

(18%)

Caterpillar (NYSE: CAT  )

(51%)


Time to throw in the towel?
Fat chance. I didn't say I was dumb -- just that I'm not as well-read as I should be. And that's why I've decided to take some of Motley Fool co-founder Tom Gardner's advice to heart.

He recently pointed out at a companywide meeting that when things are going well, most of us spend our time high-fiving and celebrating -- yet when things go sour, we turn to sulking, worrying, and even panicking.

Meanwhile, when the going gets tough for the toughest, smartest, and most successful people out there, they do something drastically different: They learn from it. And that's what sets them apart.

Follow the leaders
In an effort to learn from this particularly tough stretch of the market, I asked Tom for a copy of the "Grand Master's" reading list he put together for members of our Motley Fool Hidden Gems community.

This list comprises 25 books -- broken down into categories based on level of investment experience -- which Tom has read and reread over the years and which have helped to form the foundation of his investment philosophy and strategy.

A few highlights:

Elementary School:  

  • One Up On Wall Street, by Peter Lynch
  • Buffett: The Making of An American Capitalist, by Roger Lowenstein
  • Value Investing With the Masters, by Kirk Kazanjian

Junior High:

  • The 5 Keys to Value Investing, by J. Dennis Jean-Jacques
  • Common Stocks and Uncommon Profits, by Philip Fisher

High School:

  • John Neff on Investing, by John Neff
  • The Intelligent Investor, by Benjamin Graham

University:

  • Stocks for the Long Run, by Jeremy Siegel
  • Quality of Earnings, by Thornton Oglove
  • You Can Be a Stock Market Genius, by Joel Greenblatt

Grad School:

  • Value Investing: A Balanced Approach, by Martin Whitman
  • The Road to Serfdom, by F.A. Hayek

Here's something else you should read
Love in the Time of Cholera, by Gabriel Garcia Marquez -- and not just because the guy's a Nobel Prize winner, but because he makes some pretty brilliant observations. For instance, "wisdom comes to us when it can no longer do any good."

While that may hold true for love, I don't think it necessarily has to hold true for investing -- especially not if we follow the lead of people like Tom Gardner and my father, and dedicate ourselves to soaking up as much wisdom as we can from those who, in turn, have dedicated themselves to soaking up all the wisdom they can.

Now I'd like to know what're you're reading -- and why. Furthermore, I'm curious what you think we should all be reading to ensure that investment wisdom comes to us while it can still do us some good. So I challenge you to use the comment box below to chime in.

I won't twist your arm
It's no secret that, here at the Fool, we tend to be staunch perma-bulls whose eyes are fixed on a highly profitable -- yet admittedly distant -- horizon. I fully understand why those of you with a more short-term focus are scared witless right now -- so I won't try to talk you into investing your hard-earned money in this market.

However, I will insist that you try to make the most of these hard times by reading everything you can and learning as much as possible -- so that when the tide finally turns, you'll be ready to reel in some big fish.

That's what Tom Gardner is doing
If you'd like to see what else Tom Gardner recommends that you read or what stocks our Motley Fool Hidden Gems team -- which focuses on uncovering the most profitable stocks of the coming decade and spotting the next Celgene (Nasdaq: CELG  ) before Wall Street does -- is recommending, you can take a free 30-day trial just by clicking here. There is no risk -- nor any obligation to subscribe.

Austin Edwards looks forward to reading the books you recommend. He also owns shares of all companies mentioned, except Celgene. Coca-Cola is a Motley Fool Inside Value selection. The Fool's disclosure policy is 15 years into its 100 years of solitude.


Read/Post Comments (57) | Recommend This Article (160)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 06, 2009, at 1:43 PM, jl4387 wrote:

    I just finished reading "Juggling Dynamite" by Danielle Park. I loved the book, because I think that the rules have changed. Read it and learn. I've not been scared to keep investing thru this mess I know that what I'm buying now is on sale. BUT, I plan to take some profits on the next cycle high. I rode the '01 recession down, and I've ridden this one as well. I don't plan on doing it again!

  • Report this Comment On February 06, 2009, at 1:44 PM, mdioli wrote:

    Jason Zweig, "Your money and your brain". It's a must for every investor.

    It's not about approaches, philosophies or strategies. It's not preaching whether you should buy stocks or not. And it's not about whether to go for value or for growth.

    Its all about why do we think the way we think. Why smart, educated people do foolish (emphasis - on lower-case) financial decisions. And its about how to AVOID your next foolish financial decision.

  • Report this Comment On February 06, 2009, at 2:01 PM, XMFCams wrote:

    I just read both of the books on the high school list. Really a good way to stay confident about your investments and pick up a new idea or two. Thanks for the article, Kid.

  • Report this Comment On February 06, 2009, at 3:20 PM, TMFAEdwards wrote:

    From an e-mail response I just recieved...

    "I finished up 20% last year with some luck. This is a traders market so I am rereading Dr Alexander Elder .. Trading For a Living , best book I ever read for traders like me."

  • Report this Comment On February 06, 2009, at 4:51 PM, XMissileGuy wrote:

    For an in-depth explanation at a fundamental level of how and why we are moving into socialism, Atlas Shrugged is without peer. Now more than a half century old, Rand's ideas are as powerful as ever.

  • Report this Comment On February 06, 2009, at 5:07 PM, mritter4u wrote:

    What are the chances of virtually every MF employee who writes an opinion or POV (e.g., see above) about the markets NOT following the article up with ANOTHER TIRED sales pitch for a MF product? Or answering questions on links only to arrive at another "free" bunch of client hunters?

    I thought we Fools were considered by the MF managers to be a little more contrary than that.

  • Report this Comment On February 06, 2009, at 5:12 PM, shouse57 wrote:

    Hot, Flat, and Crowded. It makes you realize that the world isn't going to stop growing or spending anytime soon (hello commodity stocks).

  • Report this Comment On February 06, 2009, at 5:17 PM, sapereaude1 wrote:

    Reading 3 sorts of bedtime: Brian Fagan's three works on climate change and cultural mutation or collapse; Pirenne's various histories, and Steinbeck's "Sweet Thursday."

    Gradually enlarging the garden area and stocking up on necessities for self-preservation. Think it's absurd to suppose we can establish economic stability in a closed system like Earth by simultaneously increasing population and per capita consumption. The premises of consumer-based corporate capitalism fly in the face of the second law of thermodynamics, don't they?

  • Report this Comment On February 06, 2009, at 5:50 PM, TMFAEdwards wrote:

    A list from another e-mail response...

    "Power in the Land - Fred Harrison (You will learn why govts are at pains to get a stake in the banks' property portfolios)

    Boom, Bust 2010 - Fred Harrison (We were warned long before the credit crunch)

    The Little Book that Beats the Market - Joel Greenblatt & The Successful Investor's Rule Book - CityWire Publishers

    The Astute Private Investor - Kevin Goldstein Jackson

    Fooled by Randomness - Nicolas Taleb

    The Black Swan - Nicholas Taleb

    The Gone Fishin' Portfolio - Alexaner Green

    The Complete Guide to Option Selling - James Cordier & Michael Gross (previously having read Lawrence McMillan's Options as a Strategic Investment)

    Thanks to everyone who has added to our reading list so far!

  • Report this Comment On February 06, 2009, at 5:59 PM, acljr wrote:

    Anything by and about Bernard Baruch, especially his Introduction to "Extraordinary Popular Delusions and the Madness of Crowds"; "The Great Depression" John Kenneth Galbraith; "Hard Times" by Studs Turkel. For fun and lessons to be learned between the lines, read the Travis Magee series by John D. MacDonald, followed immediately by the present day best-selling Doc Ford series by Randy Wayne White. Oh, and you oughta watch, or re-watch, "Wall Street" starring Michael Douglas as GG, "Other People's Money" starring Danny Devito for juxtaposition, and, of course, "The Godfather", both parts. And don't forget to re-read "The Prince".--Art Lee

  • Report this Comment On February 06, 2009, at 6:05 PM, branchre wrote:

    And I bet you old man didn't take any government bailouts either. And he probably looked into the banking situation enough to know that Frank and Dodd, Acorn and gang (including Obama)were the ones who really caused this crisis by demanding loans to people who could not afford them and refusing the requests of the Bush administration, and McCain as well as others, to rein in Freddy Mac and Fanny Mae. If you don't believe this I can send you UTube videos to prove it.

  • Report this Comment On February 06, 2009, at 6:14 PM, Seano67 wrote:

    I'm reading "The Rise and Fall of the Great Powers" by historian Paul Kennedy. Although it's a bit dated with its future outlook since it was published in 1987, it is nonetheless outstanding in looking at the past and describing the political and economic conditions which led first to the ascendancy and later the inevitable fall of these great Western powers, from about the middle Renaissance period up until the 1980's.

    He takes a look back at Britain, France, Prussia, Russia, the Austro-Hungarian Empire, and the current (at the time) rise of the United States, Japan, China, the Soviet Union, and European Economic Community in the 20th century.

    He examines all these 'Middle Powers' of that period, and his thesis is that military and economic power go hand in hand, making or breaking a nation's ability to project power and in a few instances to make the leap from a middle to a great power. He looks at the economic climate and conditions which allowed these nation-states to elevate themselves to the status of a great power, and then to the collapse of said economies which ultimately led to their undoing. He explains how all of these great powers eventually became the casualty of imperial over-reach. They simply grew too large, with too many military commitments far, far away from home, how their economies just could not stand up to that level of over-stretch, and thus the inevitable collapse of empire.

    It's really fascinating. Great Britain as recently as the late 1800's controlled nearly 2/3 of the land surface of the earth. 2/3 of the earth flew underneath a British flag due mainly to the unparalleled excellence of the British navy, however that was just far too much for this small island nation to maintain. Their economy had no hope of keeping up with these crushing and overwhelming military commitments and expenditures, and so they fell and they fell very, very hard. You look at Great Britain today, a bare century later, and she is barely even a shadow of her former glory.

    And America's pre-eminence, that will end too. It's an historical imperative that no great power, try as they might, has ever been able to stop. The wheels of history demand continual change and that nothing stay static forever. We will unquestionably lose our status as '#1', and really all you can do is hope the fall will not be too far or too fast.

  • Report this Comment On February 06, 2009, at 6:16 PM, URN wrote:

    I'm reading and re-reading "Good Calories-Bad Calories" by science writer Gary Taubes. In my vain opinion it is a must read for anyone who is truly serious about their long-term health and who wants some real answers about how, as a nation, we've managed to travel so far down the wrong nutritional road. The economy? Stock market? Oh....yea....well, I follow a certain TMF advisory publication, buy and sell as suggested, and let it go a that. I'm not smart enough to comprehend very much about investing issues or understand the explanations. And even if I was I don't have the time. That's what I pay TMF for. I am however, smart enough to manage my own health and I'm busy doing it because if I don't have my health, all the investing smarts in the world isn't worth a share of SCSS.

  • Report this Comment On February 06, 2009, at 6:42 PM, bloodhoundgrl wrote:

    Wow. I don't think I've ever cut-and-pasted so much of a comment section before. Thanks for the reading list.

  • Report this Comment On February 06, 2009, at 7:11 PM, catoismymotor wrote:

    I am currently reading Patrick O'Brian's "The Wine Dark Sea" in the Aubrey/Maturin series. If you are not familiar with the books they are set in the early part of the 1800's, with the characters being a British Naval ship's captain, Jack Aubrey, a ship's surgeon, Steven Maturin. At the heart of the each story is the relationship between the two friends.

    What I like most about the books is that they illustrate the value of faith, friendship, teamwork, patients and respect. I find that all of these virtues are on display at the Motley Fool. That is what keeps this resource as my favorite.

    As a side note I have learned a investing lesson from the 19th century British Navy Admiral Lord Horatio Nelson who said, "Never mind the maneuvers! Go straight at them!" I translate that to mean that when you see a good stock after sizing it up you should go for it.

  • Report this Comment On February 06, 2009, at 7:11 PM, catoismymotor wrote:

    I am currently reading Patrick O'Brian's "The Wine Dark Sea" in the Aubrey/Maturin series. If you are not familiar with the books they are set in the early part of the 1800's, with the characters being a British Naval ship's captain, Jack Aubrey, a ship's surgeon, Steven Maturin. At the heart of the each story is the relationship between the two friends.

    What I like most about the books is that they illustrate the value of faith, friendship, teamwork, patients and respect. I find that all of these virtues are on display at the Motley Fool. That is what keeps this resource as my favorite.

    As a side note I have learned a investing lesson from the 19th century British Navy Admiral Lord Horatio Nelson who said, "Never mind the maneuvers! Go straight at them!" I translate that to mean that when you see a good stock after sizing it up you should go for it.

  • Report this Comment On February 06, 2009, at 7:12 PM, catoismymotor wrote:

    Sorry for the double post.

    Fool out with your stock out!

  • Report this Comment On February 06, 2009, at 7:21 PM, doclcsw wrote:

    Confessions of an Economic Hit Man (ISBN 0-452-28708-1) by John Perkins and published in 2004

    Another perspective on the method that global power-house uses to gain traction and how global power-house loses its hold on the mechanisms of traction.

    It's much to easy to blame it on the liberals ... or the conservatives, for that matter.

  • Report this Comment On February 06, 2009, at 7:34 PM, DDHv wrote:

    "Rich Dad, Poor Dad" by Robert Kiyosaki. The author's father was smart and well educated - except in finances. His best friend's father knew finances. At nine years old, he and Mike asked to be taught how to handle money. (at that age: "Teach us how to get rich") The challenge was met: how would YOU explain assets and liabilities to a nine year old? The one is simple enough for even me to understand well! ;-)

    Anyone who is interesting in trimming financial illiteracy should read and STUDY this one!

  • Report this Comment On February 06, 2009, at 8:55 PM, bulldung wrote:

    Just finished CLEANING UP by BARRY MINKOW, great book on securities fraud detection and due diligence.

  • Report this Comment On February 06, 2009, at 9:04 PM, xetn wrote:

    Economics in One Lesson by Henry Hazlitt, originally written in 1946, it could have been written in 2008. It is just that good. It is available on-line for free and it will forever change your ideas about government intervention and economics and is written in very clear non-technical terms.

  • Report this Comment On February 06, 2009, at 9:20 PM, Dave44 wrote:

    "Team Of Rivals" by Doris Kearns Goodwin, to learn more about a president who had even bigger problems on his plate than our current one does. Helps to keep things in perspective. I'm also a RYR subscriber and read a lot of the articles on Fool Watch Daily. I also like Steven Perlstein of the Washington Post who I think is one of the more sensible commentators on the US and world economy. Finally, I never miss Warren Buffett's annual letter to his stockholders -- wisdom and wit combined (disclosure - my portfolio includes one share of BRK-B).

  • Report this Comment On February 06, 2009, at 10:20 PM, trenton1ryan wrote:

    Doesn't have a thing to do with investing, but I'd put 'Ship of Gold in the Deep Blue Sea' by Gary Kinder up against anything above. A modern day treasure hunt that actually happened, blending (true) elements of suspense, history, archeology, and GOLD!!

    ...that and Autobiography of Malcolm X by Alex Haley.

    just my $0.02

  • Report this Comment On February 06, 2009, at 11:29 PM, predfern wrote:

    I thought that the Motley Fool's new book "Million Dollar Portfolio" would have all the wisdom I needed to invest in stocks. Instead it was mostly an advertisement for their premium newsletters. Steve Forbes's father once told him that you make more money selling advice than you do taking it.

  • Report this Comment On February 07, 2009, at 9:12 AM, DMalarkey wrote:

    I concur with the posting complaining about every MF commentary ends up with an advertisement for an MF product. I limit my access to the MF commentaries because I already subscrie to the service(s) in which I am interested. Please stop treating us like ignorant fools.

  • Report this Comment On February 07, 2009, at 9:25 AM, MyPiggyBank888 wrote:

    I recommend you read "Acres of Diamonds" by Og Mandino. The book is about wisdom and looking closer for answers.

  • Report this Comment On February 07, 2009, at 9:38 AM, PrestonCheek wrote:

    Thanks for the advice of some good novels.

  • Report this Comment On February 07, 2009, at 10:56 AM, TMFAEdwards wrote:

    From a reader's email response...

    "I am a bit more than half way through The Wall Street Journal. "Guide to THE END of WALL STREET as we know it; by Dave Kansas (editor at large of filife.com) - copyright 2009.199 pages - paperback - Collins Business, an imprint of HaroerCollinsPublishers (www.harpercollins.com)

    It is an easy read, taking the reader through the turbulent fall of 2008, and into the new year, including Bernie Madoff. The second half of the book, beginning with chapter five - "The New World Order" - begins with "It's the end of Wall Street - at least the end of the Wall Street that dominated the world of finance from the early 1980s through 2008".

    There are many side-bars explaining some of the terms and giving a short history of some of the players involved in the turbulence."

    Thanks to everyone who has added to our reading list so far. Keep them coming!

  • Report this Comment On February 07, 2009, at 11:08 AM, bowtiechris wrote:

    I didn't see anyone recommending Graham and Dodd's Security Analysis or Seth Klarman's Margin of Safety (if you can even find a copy).

  • Report this Comment On February 07, 2009, at 12:34 PM, Totallymanic wrote:

    I have re-read Atlas Shrugged so that I will not be suprised when the Ruling Elite do what is obviously not the right thing.

  • Report this Comment On February 07, 2009, at 12:50 PM, audie116 wrote:

    I am a retired career Firefighter. I have attended countless class's and read umpteen books on strategy and tactics. Every class and every book and therefor every teacher or author had experienced some big fire or emergency event that taught them some great point. The problem I always found throughout my career was unless you had the exact same fire they had their great pearls of wisdom didn't work or apply. Yet they swore you had to manage every fire or incident eactly the way they had learned from their great experience.

    So my great pearl of wisdom is no two experiences are eactly alike. The common denominator is maintaining your cool and thinking on your feet. Don't stampeed with the herd. Nine times out of ten I made it through by just using common sense. In investing that translates to things like "If its too good to be true it usually isn't" "Pigs get fat and hogs get slaughtered" "You don't get something for nothing"

    Don't get me wrong, I haven't stopped reading books. I just pick whatever good points I can from them but don't try to apply everything they say verbatim.

    So bring on the great books but take them with a grain of salt.

  • Report this Comment On February 07, 2009, at 2:00 PM, stilllearning96 wrote:

    What do people think of Jim Jubak (msn columnist)? Has anyone read his new book The Jubak picks?

  • Report this Comment On February 07, 2009, at 4:38 PM, tpbf wrote:

    While not a total bogelhead, I adore Enough!. Too bad a lot a finance folks did not read it first. Really is food for thought about life in the fullest - the only life view we should all hold.

  • Report this Comment On February 07, 2009, at 4:57 PM, Seano67 wrote:

    "Now I think he at least deserves a chance and everyone who has formed an opinion set in stone and attacks him and even calls him names - well, maybe they should wish they were smarter, too."

    Well of course he deserves a fair chance, every new President does. We'll see how he does in his first 100 days. That's the nominal grace period a new President is usually given from both parties on Capitol Hill, before the post-inaugural goodwill begins to wear off and partisan politics really begins to rear its ugly head once again.

    I do not envy him his job in the least, as he's stepped into a hell of a mess here. In my opinion *all* Americans no matter their political affiliation or belief system should be hoping and praying he's up to the task at hand, for the betterment of our nation, ourselves, and our children, and obviously he's got my best wishes with these extraordinarily difficult challenges he and we all face together.

  • Report this Comment On February 07, 2009, at 4:59 PM, Seano67 wrote:

    That was off-topic though, and I apologize for that. This thread is not about politics, it's about good books. :)

  • Report this Comment On February 07, 2009, at 9:36 PM, EBStroke wrote:

    1. 'The Forgotten Man - A new history of the great depression" by Amity Shlaes. An excellent and facinating story about Hoover & F.D.R. responses to the depression and the rationale of measures taken. A brilliant and readable account, written with unusual clarity. Learning about the 30's provides some insight as to what we may expect to see from Washington for the next several years.

    2. The two books by N. Taleb are enlightening looks at the interaction of mathemetics, probability theory and personal mental foibles in the minds of investors. (I am still in the process of reading these.)

    a. Fooled by Randomness

    b. The Black Swan

  • Report this Comment On February 08, 2009, at 12:58 AM, abrunnermi wrote:

    The little Book of Bull Moves in Bear Markets

    by Peter Schiff

    is a MUST read NOW!!

  • Report this Comment On February 08, 2009, at 6:54 AM, seagull2912 wrote:

    I like the reading of the Market Watch contributor Paul B.Farrell his article " Tao of Wall Street: You know too little to win" 6/12/06 is timeless. I framed and keep it on my desk .

    His book "The Lazy Person's Guide to Investing" is a must for the par time investors. I have followed his "Aronson Family's Personal Taxable Portfolio" provided by 16B institutional pension fund manger for 5 years. It is always substantially ahead of the market and Farrel provide re balancing information once a year every January.

    But as a full time option trader, I am duplicating Aronson portfolio in to most liquid ETF's and apply my option strategy to it. It works for me.

    For Option trading I am using only one booklet from OIC ( The Option Industry Council) "An Investor Guide to Trading Options" you can get it from their web site www.optionseducation.org And any one who are wiling and able to get involved with the options trading should go to OIC free seminars ( you can find the schedule on the web site above) It is great education in this field and it is truly free-no sales peach. This is one in a very few thing our government regulate correctly.

    Thank you all for sharing valuable information. Create teem work.

  • Report this Comment On February 08, 2009, at 8:21 AM, dbonaro1 wrote:

    Management books (ones with real research behind them, not just the kind of fluff you find in "Raving Fans") should be on this list, too, as when we're investing in companies we are investing in large part in management (another large part being sector or industry-level trends). So, I would absolutely put Jim Collins' "Good to Great" on the reading list, as well as "Putting the Service-Profit Chain to Work", the 1994 Harvard Business Review article by James Heskett, Thomas Jones, Gary Loveman, W Earl Sasser and Leonard Schlesinger. Based on these two books, as well as my own experience in management, I would avoid, for instance, a Bob Nardelli-helmed company.

    I also find that Jim Rogers has a great understanding of large scale cycles, so I also recommend his "Hot Commodities : How Anyone Can Invest Profitably in the World's Best Market" (2004). I haven't read his other books, which may also be very worthwhile, but this one's quite good.

  • Report this Comment On February 08, 2009, at 10:22 AM, peders01 wrote:

    I am trying to get into the heads of the people whose hands are on the tiller. So I have just finished a book on the lives of T.R., Franklin and Eleanor Roosevelt. FDR's approaches in the 30's gave me some insights into the possibilities that Obama might take, and some differences that exist too. The differences might be the more significant.

    I am also reading Hillary Clinton's Living History . These people have their hands full for the next four years and I want to understand how they think. I can find other financial wisdom but want some framework and background to assist me.

  • Report this Comment On February 08, 2009, at 3:49 PM, lucas1985 wrote:

    I wish that those fools/Fools having a 9-to-5 job and no formal training/education on macroeconomics, finance, capital markets and securities to stop trying to get market-beating returns because they think they're doing due diligence based on reading some best-seller books.

    They should know that markets really are inefficient, but you need time, knowledge and self-control to exploit those inefficiencies.

    I'd recommend "Investment Fables" by Aswath Damodaran to average investors looking for a dose of reality. Also check this article by The Times on how the academic constructions of the latest decades (based on flawed free market ideologies) are in the process of being buried:

    http://www.timesonline.co.uk/tol/comment/columnists/anatole_...

  • Report this Comment On February 08, 2009, at 11:09 PM, TMFAEdwards wrote:

    More recommendations from reader emails...

    "My sister-in-law recommended the book "The Creature from Jekyll Island" to me; it is slow going, but fascinating. It's the history of the Federal Reserve, but includes a lot of wonderful stuff about inflation, history of money, etc. It's by Griffin. B. Callisch, Rocklin CA"

    "The second World by Parag Khanna Random House"

  • Report this Comment On February 09, 2009, at 12:37 AM, engineEar wrote:

    I really like Your Money or Your Life and The Neteast Little Guide to Stock Market Investing.

    Neither book is particularly advanced, but rather focus on the fundamentals of sound personal finance habits and the basics of investing in the stock market.

  • Report this Comment On February 09, 2009, at 9:19 AM, elguiri01 wrote:

    Art of the Start - Guy Kawasaki.

    If you're tired of investing in other people's businesses, start your own. Kawasaki's book (and another "Reality Check") prove invaluable help for starting anything.

  • Report this Comment On February 09, 2009, at 11:04 AM, robertf36009 wrote:

    I'm reading "Culture Warrior." by Bill O'Reilly. Not directly investment oriented but good insight as to where the democrats want to take the country and why. Could prove valuable for investing insights over the next two to eight years of democrat majority control of both elected branches.

  • Report this Comment On February 09, 2009, at 4:31 PM, lucas1985 wrote:

    @ robertf36009,

    I thought that the neoconservative ideology was being put in the trashcan (where it belongs). I was wrong.

    Reading a book full of factual mistakes, distorted facts and ad hominem attacks won't make you a wise person.

    @truthisntstupid,

    You're spot on. Average investors should invest in index funds and income-generating securities (equities, bonds and others). Here's my advice for you:

    - Buy and hold works well when you have an exit strategy.

    - Your time horizont should be between 3 and 5 years for new investments.

    - Dollar cost averaging is great in a down market, specially when you can't raise lots of cash overnight. Dollar cost averaging is awful in bull markets because it forces you to overpay.

    - Focus your reading/education time (your most scarce resource) on the valuation of dividends. There are great resources on the web for the dividend investor with tools, reading materials and stock analysis.

    - Dividends growing at 20%/year is generally too good to be true. Be more conservative in your estimations (for a nice but somewhat conservative payout growth use 15%/year for an optimistic valuation)

    - Always demand a nice margin of safety (i.e., don't overpay)

    - Don't listen/read to permabulls and permabears.

    - Be bold but don't be overconfident.

    - Learn to time the market (i.e., be greedy when others are fearful and be fearful when others are greedy) through valuation (earnings yield, div. yield, comparisons with other asset classes, etc)

    - Be prepared for lower returns. The great returns of the past century were caused by the market being cheap most of the time. Markets have been awfully expensive the last 15 years. This leaves us with 2 outcomes: markets remain expensive and the rates of returns become way lower (bye bye 10% annual returns) or the market reverts to the mean thus forecasting lots of pain in the short and medium terms.

  • Report this Comment On February 10, 2009, at 1:17 PM, dancinglight wrote:

    Atlas Shrugged is one of my favorite books. Everything you do is based on your philosophy and Rand's insights into what type of philosophy produces a particular type of action are dead on. Her predicitions of government intervention and its deadly consequences make it a must read for these times.

  • Report this Comment On February 10, 2009, at 11:59 PM, johmsen wrote:

    I read Atlas Shrugged when I was in High School and for the life of me all I can remember is the name of the book. So why read??? I have bought three stocks the MB recommended and have lost a bunch. No more investing at this time. Just sitting tight and holding on to my JNJ which has been going down at a fast rate.I'm too old to worry.

  • Report this Comment On February 11, 2009, at 10:12 AM, TMFAEdwards wrote:

    another interesting read that was just passed along to me by a colleague...

    http://online.barrons.com/article_print/SB123396545910358867...

  • Report this Comment On February 12, 2009, at 10:35 AM, TMFAEdwards wrote:

    One more recommendation passed along to me from Seth Jayson, advisor for Motley Fool Hidden Gems...

    "Your Money & Your Brain" by Jason Zweig

    Happy reading, and please keep the recommendations coming.

    Fool on!

  • Report this Comment On February 13, 2009, at 3:23 PM, JEQP wrote:

    I've read a lot of investment books -- the last one was "Rich Dad's Guide To Investing" by Robert Kiyosaki. Very good. His general theme is that investments should be cash flow positive (otherwise it's more like gambling), and this book spends some time going through balance sheets and giving a basic idea of what to look for. It's not fund-manager stuff, but it teaches you where to look for some common red flags like excessive debt or problems with cash flow.

    I think different personalities suit different types of investing. I'm an income investor -- I don't judge my portfolio on what it's worth at a particular time but rather what the income is.

  • Report this Comment On February 13, 2009, at 4:29 PM, McCrikey wrote:

    My advice for the weak is to read 1984 so they will be ready to capitulate under torture and for the strong to read Atlas Shrugged so they will be ready to laugh.

  • Report this Comment On February 13, 2009, at 7:45 PM, mediapro wrote:

    I don't expect that you, nor many of your foolish readers will appreciate my recommendation, but Burton Malkiel's, "A Random Walk Down Wall Street" was the first book on investing that made sense.

    If the author had simply dusted off his Malkiel, he would see all of the metrics that indicate why it's not a good idea to speculate on market bets (value or otherwise). Malkiel makes an indisputable historic observation about the valuelessness of green-eye-shade technical analysis, stock gurus, actively managed mutual fund investing, and the inevitable market bubbles created by the greatest fool who is last to enter those boom periods.

    A simple, more effective, and boring approach for a long-term investor is to dollar-cost average into broadly based indices and forget about trying to achieve what can never be achieved --- becoming the one who truly understands what a company does, what is its true value, and even worse, what it will become in the future.

    FOr a more "macro" view and to echo the earlier poster who suggested "Confessions of an Economic Hitman", I would add the value of seeing how power, economics and the dirty underbelly of the IMF and World Bank have played out in John Perkin's "The Secret History of the American Empire".

  • Report this Comment On February 14, 2009, at 5:12 PM, MinnesotaLAS wrote:

    You know, sometimes the best part is the commercials. I look forward to the Fool Watch Weekly in my email inbox and like reading the short articles and trying to soak it all in. Also big on my list is the Stock Advisor that comes in my mailbox every month. My husband signed up for the Wall Street Journal and about once a week or more I look over one of the editions. I scan the IBD email report and read my ING newsletter and my financial guys letter (sometimes).

    As for what I really want to read: I am part way through: Guests of the Ayatollah, by Mark Bowden. I also read Imprimus regularly. Last but not least the Bible. As to investing, I really appreciate all the reading you Fools do on our behalf. As much as I wish I understood it all, I don't, so please keep reading and passing along your advice. And...the funny disclaimers.

    As to Obama, someone gave him credit today for collecting how much in taxes owed? If his nominees hadn't been picked would they have ever paid their taxes? So much for those who want to tell us to pay more taxes while not paying themselves.

  • Report this Comment On February 16, 2009, at 5:25 PM, TheDamHill wrote:

    For those seeking a break from trying to figure out why the market is up or down...or where to invest next...this book will challenge anyone's thought process! Trustful Surrender to Divine Providence, Fr. Jean Baptiste Saint-Jure and Saint Claude de la Colombiere.

  • Report this Comment On February 18, 2009, at 12:50 PM, nrlbuild wrote:

    "Liar's Poker" by Michael Lewis. It was recommended somewhere here in Fooldom.

    It is about the inner workings of Salomon Brothers in the 80's. Some very similar situations with regards to mortgage backed securities took place in this time period...although slightly different now it would seem that in many ways we are repeating that situation...holy **** what an eye opener.

    Do people ever learn? Most obviously do not...which is good for those of us who are willing to try a little harder!

  • Report this Comment On November 04, 2009, at 7:56 PM, OldManNick wrote:

    Security Analysis, Common Stocks and Uncommon Profits, and of course the Good Book-The Intelligent Investor.

    As to DDhv's comment, kids can invest well. I should know as I am 14 and have been investing successfully (not day trading) for over 2 years.

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