November 24, 2020

My Top 5 Investing Books

By Michael McKeown, CFA, CPA - Chief Investment Officer

My Top 5 Investing Books

Many friends and clients ask what books we recommend for young people who are interested in investing. With Black Friday and Cyber Monday upon us, here are five books to add to your library, or give as a gift to the budding investor in your life. 1

Admittedly, these do not specifically cover personal finance or planning. So those investing principles will be covered in another post. Nonetheless, each of these five teaches principles that go a long way towards understanding money and investments.

These span a range of investing topics from psychology, to principles, to history. While the topics may seem advanced for young first-time investors, each book is essential and easy to comprehend.

The Little Book of Behavioral Investing: How Not to Be Your Own Worst Enemy by James Montier
Investing is not necessarily all about analysis. Often, it is realizing the short comings we humans have in making decisions. The author examines many of the ways we mislead ourselves. It shows why a process and framework is necessary for investment decision making.
Reminiscences of a Stock Operator by Edwin Lefevre (Wiley)
For the Robinhood trader. A classic. The life of the greatest trader who ever lived, Jesse Livermore.  Many lessons on trading, mindset, and life.
Margin of Safety by Seth Klarman (Harper Collins)
The principles of the value philosophy of investing explained by a legendary hedge fund manager. Unless you are a collector, I would avoid paying the $1,000 list price since it is out of print. Plenty of copies can be found online in PDF.
Devil Take the Hindmost: A History of Financial Speculation by Edward Chancellor (Plume)
Those who do not know history are condemned to repeat it. Nothing new is ever under the investing sun; it just comes with different names and forms.  This book looks at the great investment bubbles of the past.
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Taleb (Gildan Media)
There are lies, damn lies… and statistics.  While Taleb is a controversial figure, this book is his most digestible. It shows the shortcomings of putting too much weight on any single factor leading to past successes.

Hopefully one of these books can be added to yours or a young investor’s reading collection.

[1] Not a Marcum Wealth firm endorsement of each book.

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