Investment is a lifelong process. Not only does it require financial know-how, successful investing requires patience and the right temperament. Specifically we have picked 3 best investment books for beginners who want to adopt the value investing approach.
Skip the trial and error process. You can learn a ton of skill sets as well as mindset through great books like the ones listed here.
Acquiring knowledge and learning through the experience of others can shorten your learning curve. Consequently, you will minimize the potential losses from investing.
So if you are just starting to learn about investing. Or if you have already started your investment journey but want to solidify your understanding. Then take a look at our picks of the top investment books to read below. It will give you a stronger framework to give you the confidence you need for your investing journey.
Let’s get you started quickly. The 3 books listed below are what we think will be the best to cover a comprehensive area of investment. They will ensure that you get started on the right path. In particular, it will equip you with the basic and advanced technical knowledge. In addition, they will offer the mindset and inspiration necessary to practise value investing for the long term.
These 3 books will bring you further along your investment journey.
For now, let’s take a quick look at what you can learn from these awesome books.
Buffett: The Making of an American Capitalist – Best Investment Books For Beginners
Well, there’s many classic books talking about market behavior. They talk about what kind of mindset investors should have in order to take advantage of the market. Popular ones include The Intelligent Investor by Benjamin Graham, who was also Warren Buffett’s teacher. Another popular one to help beginners start investing in index funds will be The Little Book of Common Sense Investing.
But here we recommend “Buffett: The Making of an American Capitalist”. It details not only the investment strategy of the legendary investor. But also the intriguing journey of how Buffett started to become an investment cult figure of our time. And amass billions of dollars along the way.
Apart from the inspiring story of Buffett’s relationships with his family, friends and colleagues, the book accounts for the many lessons and actual practice of his long-term investment philosophy. The book will share with you how Buffett buy undervalued companies’ stocks and hold them till their true value emerges.
In this biography, it will be beneficial whether you are a beginner or more advanced investor. There’s many lessons that you can learn from the deals he made, as well as Buffett’s life in general. Popular ones include the investment in GEICO and Washington Post. The book will inspire you to find something that you love to do. And work on it all day long without feeling that it’s work.
As Buffett once referred to his work as a piece of art in the making, “I get to paint my own painting. I go down there every day and I feel like Michelangelo working on the Sistine Chapel or something.”
A masterful biography for all value investors!
Warren Buffett Accounting Book: Reading Financial Statements for Value Investing – Best Investment Books For Beginners
As the title suggests, this book deals with a slightly technical area of investing. It will help those who are just starting out and want to know how to read financial statements. These primarily include the income statement, balance sheet and cash flow statement.
Apart from understanding the figures in annual reports, it also shares important financial metrics when valuing businesses. This will help you screen and filter for value stocks when researching investment ideas.
And finally, the book detailed two key methodologies for calculating intrinsic value of a company. And it includes a section about discount rate and how it works.
In fact, it is written in simple language that we can all relate to. You can barely tell that you are learning how to read a financial report. For instance, I like the way it relates assets, equities and liabilities of a company to the value, ownership and loan of your home.
So, definitely a book to pick up if you are finding a more structured approach to learn investing. It kickstarts the process by teaching you how to read financial statements. Then it equip you with the tools to estimate the valuation of different companies.
Before you know it, you will be picking up different companies’ annual reports and reading them like a Pro.
Applied Value Investing: The Practical Application of Benjamin Graham and Warren Buffett’s Valuation Principles to Acquisitions, Catastrophe Pricing, and Business Execution – Best Investment Books For Beginners
There’s many different investment philosophies and strategies that you can adopt. Rather than flipping through classic Security Analysis by Benjamin Graham and David L. Dodd, that can be quite difficult to translate to actionable tactics. You should explore and decide what investing styles suit you better.
Applied Value Investing uses a similar approach to the Security Analysis masterpiece. But expands it into a structured and practical step-by-step methodology in valuing companies. From stocks instruments to mergers and acquisitions, you can learn from a handful of practical case studies. These examples will show you how to truly apply value investing to build your portfolio.
Most importantly, it gives you the confidence by providing you with a framework to assess and find value investment opportunities. Not to mention the tons of lessons that you can learn from the success and failure of real-life examples. For instance, Warren Buffett’s acquisition of GEICO and General Reinsurance Corporation.
So, if you are a follower of value investing, then you must definitely add this book to your library. Although this is a more advanced investing book, it is really easy to read. In fact, you can apply the concepts to your investing analysis straight away.
Let’s wrap up our picks for the best investment books for beginners. If you are just getting started, figuring your ways on what investment approach to adopt. Or simply want some inspiration for your investing journey. Check out the book “Buffett: The Making of an American Capitalist”.
If you want to learn the basics of stock investing, you will be able to read financial statements of companies. Then “Warren Buffett Accounting Book” is definitely a must for you to kick start your investment research and analysis work.
Finally, if you decide that value investing is something that resonates with you. Then the book “Applied Value Investing” is a must to add to your library. It will solidify your framework and concepts, and in turn enhance the success of your investing in this modern world.
Let me know your thoughts and share with us your favourite investment books in the comment.
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