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 Nouriel "Dr. Doom" Roubini -- instead of gloating about near triple-digit gainers like Freeport-McMoRan and Transocean (which are now both down double-digits), my portfolio would probably be in much better shape ...

Stock

My Total Return

Goldman Sachs (NYSE: GS  )

(42%)

NYSE Euronext (NYSE: NYX  )

(38%)

Chipotle (NYSE: CMG  )

(43%)

Intuitive Surgical (Nasdaq: ISRG  )

(32%)

Yahoo! (Nasdaq: YHOO  )

(28%)

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 wisdom when it comes to matters of the heart, 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 Southwestern Energy (NYSE: SWN  ) and Deckers Outdoor (Nasdaq: DECK  ) 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.

This article was first published Feb. 6, 2009. It has been updated.

Already a Hidden Gems subscriber? Log in at the top of this page.

Austin Edwards looks forward to reading the books you recommend. He owns shares of Chipotle and Intuitive Surgical. He no longer owns shares of Goldman Sachs, NYSE Euronext, or Yahoo! Chipotle, Intuitive Surgical, and NYSE Euronext are Motley Fool Rule Breakers selections. Chipotle B-shares are a Hidden Gems recommendation. The Motley Fool owns shares of Chipotle. The Fool's disclosure policy is 15 years into its 100 years of solitude.


Read/Post Comments (3) | Recommend This Article (13)

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 April 13, 2009, at 3:05 PM, JeanDavid wrote:

    "I'd like to know what're you're reading..."

    Blowback -- Chalmers Johnson

    The Sorrows of Empire -- Chalmers Johnson

    Nemesis -- Chalmers Johnson

    Plan B 3.0 -- Lester R. Brown

    Little, Big -- John Crowley

    Miss Melville Regrets -- Evelyn E. Smith

    "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."

    Some of these are to increase my understanding of the world we live in, some are to flex my mind along channels it might not otherwise go, and the one because all work and no play is deadening. I do not say others should necessarily be reading the same books, but they should pick mind-broadening books, not just "job training" ones.

  • Report this Comment On April 13, 2009, at 3:40 PM, tiedemann wrote:

    To learn about the fragility of forecasting, read:Against The Gods by Peter Bernstein and The Black Swan by Nassim Nicholas Taleb. Tiedemann

  • Report this Comment On April 13, 2009, at 4:05 PM, empirefool wrote:

    If "The Intelligent Investor" is the most important investment book ever written, then I posit that "Unexpected Returns" by Ed Easterling (not on the list above) should be the second. It paints the true picture of market volatility and how to use it to your long-term advantage.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 873643, ~/Articles/ArticleHandler.aspx, 10/21/2014 11:11:11 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement