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 – maybe I would have been shorting the likes of AIG (NYSE: AIG  ) , Citigroup (NYSE: C  ) , and Developers Diversified Realty (NYSE: DDR  ) instead of gloating about near-triple-digit gains in Freeport-McMoRan and Transocean (which are now both down double digits).

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


  • 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 encourage 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 you might shy away from a roller-coaster market like this -- so I won't even try to talk you into pouring your hard-earned money into safe dividend stocks like Philip Morris International (NYSE: PM  ) or AT&T (NYSE: T  ) .

But 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 for good, 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 he recommends you read ... or if you'd like to follow along as the Hidden Gems team -- which focuses on uncovering the decade's most profitable stocks and spotting the next Green Mountain Coffee Roasters (Nasdaq: GMCR  ) or Quality Systems (Nasdaq: QSII  ) before Wall Street does -- uses $250,000 of The Fool's own money to build a best-of-the-best small-cap portfolio, you can take a free 30-day trial to Hidden Gems 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 AT&T, Freeport-McMoRan, Philip Morris International, and Transocean. Green Mountain Coffee Roasters is a Motley Fool Rule Breakers selection. Quality Systems is a Motley Fool Stock Advisor pick. The Fool's disclosure policy is 15 years into its 100 years of solitude.

Read/Post Comments (7) | Recommend This Article (27)

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 May 14, 2009, at 11:05 AM, pondee619 wrote:

    "including the dire predictions of Nouriel "Dr. Doom" Roubini "

    OK. With the alter ego of "Dr. Doom", when was the last time the good Dr. was Bullish?

  • Report this Comment On May 15, 2009, at 2:58 AM, evilrage wrote:

    I'm reading 'Emergency' by Neil Strauss. Because WTSHTF, who knows what'll happen.

  • Report this Comment On May 15, 2009, at 10:34 AM, jonathansmith wrote:

    Predictably Irrational: The Hidden Forces that Shape our Decisions, by Dan Ariely,

  • Report this Comment On May 15, 2009, at 12:37 PM, sentinelbrit wrote:

    Contrarian Investment Strategies: the next generation by David Dreman. Expounds on his earlier book on value investing. Great chapters on investor psychology.

  • Report this Comment On May 18, 2009, at 1:02 PM, FRINEDOFFOXY wrote:

    sounds like you guys are getting ready to announce a new service, say for $199 per year. Let me guess the name. Maybe "Reader's Breeze to riches"?

  • Report this Comment On May 28, 2009, at 2:05 PM, jmt587 wrote:

    A recent book I read and thought was fantastic and very insightful was Jared Diamond's "Collapse: How Societies Choose to Fail or Succeed". It isn't nearly as hypey as its title would suggest. The guy is a great author, I picked up on him by reading that Munger recommended another of his books, Guns, Germs, and Steel, which I also read and enjoyed.

    I'm currently reading a Lincoln biography called "Team of Rivals: The Political Genius of Abraham Lincoln" which is incredibly good. I don't know if it is all that relevant to investing, but it certainly gives you a wonderful portrait of nearly ideal leadership. Definitely someone to emulate if you aspire to be a leader yourself.

  • Report this Comment On May 28, 2009, at 2:21 PM, wrparks wrote:

    I don't see "The road to serfdom" as relevant to investing either. Sure, it's a great book, with compelling ideas on the dangers of central planning. But, the only investment advice I could glean from it would be to get out of the market at the first sign of central planning...............

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