A Reading List for Value Investors
Many of you have asked for my book recommendations, so I decided to publish book reviews after first introducing a reading list for value investors. Value investing is a deeply psychological exercise, one that is usually at odds with the seductive sirens of the stock market as well as society in general, and this is what makes it difficult. Value investors seek to preserve their sanity in part through reading.
Except for Benjamin Graham's Security Analysis and Jim Valentine's Best Practices, you will find that most books on this list focus on the softer skills of investing, rather than overwhelm readers with quantitative frameworks. Suffice it to say that in an increasingly machine-driven world of investing, quantitative frameworks are unlikely to serve as strong or reliable differentiators (aka alpha generators) on a repeatable basis. That leaves two areas which I personally focus on for adding value - 1) industry knowledge and 2) behavior control.
None of the books on my list emphasize industry knowledge explicitly, or to the extent I do in my book. So in essence all of the reading here is really intended to provide guidelines to shape investing psychology and behavior. I wish I had taken a couple of psychology classes earlier in life to form an appreciation for important concepts from an early age.
I plan to grow and update this list over time. If there are other books you think I should read or add to this list, please drop me a note. The more time one spends reading, the less the time left over for trading - a highly beneficial outcome!
Disclosures and Disclaimer