Sven’s List Of The Five Books Every Investor & Trader Should Read

July 20, 2017

Sven’s List Of The Five Books Every Investor & Trader Should Read

I love books on investing, and find them to be the best possible investment. For just a few bucks, you can get the synthesized knowledge of the most successful investors. On top of that, many also discuss their mistakes, which are an even more valuable source of learning.

So with that, today I’ll the list the books on my list that I think every investor or trader should read alongside a short commentary.

#1 The Black Swan: The Impact of the Highly Improbable – Nassim Nicholas Taleb


Source: Amazon.

Why would I start a list of investing books with a philosophical book? Well, firstly, the book deals with uncertainty which is inherent to financial markets. Secondly, the author, Nassim Nicholas Taleb, first made his money by trading options on Wall Street and only then dedicated himself to studying and writing about human behavior in uncertain environments.

The book will give you a completely different take on how financial markets, and the world itself, work and provide essential knowledge that will allow you to find black swans that will work in your favor and to protect yourself from the black swans that will have a negative impact. You’ll also learn how history isn’t really what we think it is where Taleb, through using wonderful stories, explains complex philosophical matters in a simple way.

I’ve got to issue a warning here, however: after reading this book, your perception on how things work will be permanently altered. However, what’s also very possible is that your returns will also be permanently altered on the positive side.

#2 Market Wizards: Interviews with Top Traders – Jack D. Schwager


Source: Amazon.

This book allows you to enter into the minds of very successful traders through well-structured interviews by the author. What’s especially interesting is that practically all of the interviewed traders first started with huge losses and many were wiped out a few times before making a successful trading career.

An essential read not only for traders, but also for long term investors because the book shows how short, medium, and long term trends can be taken advantage of.

#3 Money: Master the Game – Tony Robbins


Source: Amazon.

Now, Tony Robbins certainly isn’t a financial guru nor someone that you should listen to for investing advice. However, for this book, he interviewed 50 of the most famous and successful financial experts alive and summarized their knowledge in one book.

The book is an easy read, but it will provide a great overview on various investing strategies so that investors can find the best strategy for themselves.

One of the really special investors that Tony Robbins managed to pull into his book is Ray Dalio, and I find the highest value of the book in the explanation of the all-weather portfolio, which is how to have upside without the downside and create a lifetime income plan.

#4 Alchemy of Finance – George Soros


Source: Amazon.

This is perhaps the most complicated book on this list but nevertheless, if you find the patience and will to understand Soros’s investing philosophy and approach, you can set yourself up for amazing investing returns. Don’t forget that Soros is a trader who managed to achieve returns of over 26% per year for a period of more than 40 years.

In the book, Soros explains his theory of reflexivity which underlies his investment strategies. The basis of the theory is that markets are biased in one direction or the other and that the markets can influence what they predict, thus market predictions reflect on fundamentals and actual happenings.

Given how the S&P 500 continues to just go up, Soros’s book is an essential read that allows readers to understand how long stocks will continue to go up, how to play the upward trend, and when the potential reversal will happen.

#5 The Great Investors – Glen Arnold


Source: Amazon.

In his book, Glen Arnold succinctly describes the strategies applied by the best investors of the last 100 years.

He analyzed the most famous investors—like Benjamin Graham, Warren Buffett and Charles Munger, and George Soros—but also the less famous investors who have a lot of value to add, perhaps even more as we know pretty much everything about the Grahams and Buffetts.

Other investors discussed are Anthony Bolton, John Neff, Peter Lynch, John Templeton, and Philip Fisher. There’s a lot to learn from interesting investing techniques discussed, like the “scuttlebutt approach” to name one.

#6 The Intelligent Investor – Benjamin Graham


Source: Amazon.

Now I know I said five books at the beginning of this article, but The Intelligent Investor is such an important book that omitting it from a list like this would be a crime.

As the last version was written in the 1970s, it’s so interesting to see how all the knowledge still holds after almost half a century has passed.

#7 Margin of Safety – Seth Klarman


Source: Amazon.

This is perhaps the best book for the value investor of the bunch, but I wouldn’t advise you to buy one as the price is above $500 on Amazon. However, you can read my summary of the book here on Investiv Daily.

Conclusion

Investing books have a double benefit, they increase our knowledge while we learn from the mistakes of others, and at the same time provide relaxation from the constant number crunching activity that investing really is.

I hope you’ll enjoy the books if you haven’t already read them. Even if you have read them, it’s always good to reread them for refreshing your memory, especially if you are tempted by some hot new investment plays like cryptocurrencies, high yield bonds, or marijuana stocks. I’ve read the above books multiple times and it’s always an enjoyable learning experience.

For those who don’t have the patience to read, I’ll write a summary on all of the above books so please keep reading Investiv Daily to be notified when I do.