The only books you need to read to learn value investing

Its been a week or more since I have posted something, and that is because I was travelling to Senegal, which is a fabulous country by the way.

Since then, several of my stocks have posted Q4 earnings. All went up like a bunny rabbit, except Magna (MGA), so I need to check and update my excel calculations and post them here. If either they turned into a bad company, or they stayed a good company but the price target is down, I need to sell. But then, I am a bit lazy. There is nothing wrong with being lazy in investing, by the way, its one of Buffet’s mantra. “Sit on your butt and do nothing once you find a good stock“. I will update you boys and girls soon.

Anyway, I thought I will post here my top 5 books for the calculated value investor. I cant post my top 10, as honestly there is a lot of BS out there and I only would recommend these five.

F Wall Street

F Wall Street by Joe Ponzio

This is a MUST READ. Its written in plain English, and helps you through the calculations – based on owner’s earnings and discounted cash flow. Its really the best book out there I think. The last part of the book deals with arbitrations, and that part should be skipped. But overall, a great great read, to the point and no nonsense.

 

The Snowball: Warren Buffett and the Business of Life

The Snowball by Alice Schroeder

This book, as thick as a bible, is basically the only authorized biography of Warren Buffett. Its dense, its detailed, and it reads like a train. The book will allow you to peek into the mindset of Warren. Did you know that when he was a young kid, he collected thrown away stubs of failed horses at horse racing events; ever so often a horse win was disqualified and he held the winning stubs? Warren’s hobby is literally collecting money – this book shows you how he did it. A truly mesmerizing read.

 

Rule # 1

Rule #1 by Phil Town

I liked reading this book, as it gave me several ideas. The minus is that it is borderline evangelistic and patronizing, and obviously full of BS. The first chapter, how he went rafting with a bunch of investors as a rafting instructor and almost died, and started investing with 1,000 bucks that became 1 million bucks in a couple of years….please dude. But the book is right on many points and teaches some valuable tricks, using quantitative examples. It also teaches you ‘intelligent’ momentum investing; probably true but I have since long abandoned it. Still, a worthy read.

One Up on Wall Street

One Up on Wall Street by Peter Lynch

Peter Lynch was managing director of the Fidelity Magellan Fund, the nation’s largest and most profitable stock mutual fund. Ever. And he wrote this book. Its honest, fun, a very easy read and wont teach you any formulas or tricks. What it does teach you is how you ‘can beat the street’ – he has done it and proven it, for decades! Its a fun read and uplifting. He keeps going on about 10-baggers. Great idea, but a lot of luck involved if you ask me. In any case, he knows when he sees a good stock, and sticks to it, unlike the market.

 

The Intelligent Investor

The Intelligent Investor by Benjamin Graham

Number 5 in my must reads. This book is considered THE standard and first work ever to describe the concept of value investing, and is written by the prof that taught Warren Buffett. I will be honest; its highly valuable but a bit (a lot) outdated. Read it, study it, re-read it, and hopefully you get something out of it.