1. The Intelligent Investor (1949) by Benjamin Graham
One of the greatest classics on value investing ever written by one of the best investors of all time, Benjamin Graham. This really laid the foundation for all future value investors in thinking about stocks as pieces of a business, how to manage risk, and how to develop a long-term investment strategy. Warren Buffett called this work, “By far the best book on investing ever written.” A must-read and a must-have.
2. A Random Walk Down Wall Street (1973) by Burton G. Malkiel
In this book, Burton Malkiel explains that investing in a diversified basket of stocks and holding for the long-term will mostly beat the performance of any investment fund. He mentions that no amount of fundamental or technical analysis can help individual investors outperform the market over the long-term, so it’s basically useless to put much effort into it. Although many successful value investors would disagree with Malkiel’s conclusions, this book is still a classic for emphasizing the importance of investing in a diversified basket of stocks at a low-cost.
3. The Essays of Warren Buffett: Lessons for Corporate America (2019) by Warren Buffett and Lawrence Cunningham
The world’s greatest investor, Warren Buffett shares his techniques and investing wisdom in this collection of letters to Berkshire Hathaway’s shareholders over the decades. Buffett’s writings are informative, witty, and contain many nuggets of wisdom that can be applied to any investor’s toolbox. This compilation of letters is an MBA’s worth of education in itself. They are a must-read for any serious value investor.
4. The Dhandho Investor (2007) by Mohnish Pabrai
Author Mohnish Pabrai has made a name for himself as one of the great value investors in our current era by using a checklist and rules-based approach to investing. He provides a comprehensive framework for value investing following the principles of Benjamin Graham, Warren Buffett, and Charlie Munger. “Dhando” means “endeavors that create wealth” or more simply, “business.” Pabrai illustrates the successful business techniques used by the Patel family from India and how they gradually built wealth operating hotels. He shows us how that same framework can be used to build wealth in the stock market.
5. Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger (2005) by Peter D. Kaufman
Poor Charlie’s Almanack contains a collection of Charlie Munger’s talk, lectures, and investment philosophy and writings. Munger is famously known as Buffett’s right-hand man and is known for his wit, humor, and insight into what makes a great business. This is a great coffee table book you can dig into with lots of great illustrations along with fun facts and random tid-bits of investing knowledge.
6. Security Analysis (1940) by Ben Graham and David Dodd
If you’re looking for a detailed book on how to pick stocks and analyze companies, this is a must-read. Warren Buffett called it, “A road map for investing that I have now been following for 57 years.” Although it can get technical, you’ll learn a lot about how to dissect a company’s financials, how to analyze bonds, and the concept of intrinsic value.
7. Common Stocks and Uncommon Profits (1958) by Philip Fisher
Philip Fisher is one of the great investors of all time. In this classic book he talks about the do’s and don’t for investors, how it’s important to be a conservative investor, the importance of researching a company, how important a good management team is, and the fallacy of the efficient market theory. His philosophies on investing are considered by many to be gospel.
8. The Outsiders (2012) by William Thorndike
This is a book about outstanding CEOs, their unique management philosophy, and how they turned their companies into successful organizations. William Thorndike talks about how the true worth of an outstanding CEO is measured by the returns they provide shareholders over the long-term. The great CEOs believe that cash flow, not reported earnings determine a company’s true value over time. The eight CEOs featured in this book ran their companies with such success that their firms all vastly outperformed the general market.
9. Irrational Exuberance (2015) by Robert Shiller
Robert Schiller is a Nobel prize-winning economist who warned us about the tech and housing bubbles. He illustrates that herd behavior and irrational exuberance among investors is creating the potential for another bubble to burst in the stock market. He sees rapidly rising stock, bond, and housing prices as evidence of this. He tells individual investors how they can lessen their risk before the next financial crash.
10. One Up On Wall Street: How To Use What You Already Know To Make Money In The Market (2000) by Peter Lynch
In this classic, Peter Lynch, one of the most successful money managers of all time, tells us how to find investment ideas in every part of our lives just by being observant. By doing this, we can find “multibagger” winning stocks before the professionals on Wall Street. He also shows us how to dig into a company’s financial statements to determine which numbers are most significant. Lynch demonstrates how to pick winning stocks, which stocks to avoid, and how to construct a market-beating portfolio for the long-term.
11. Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor (1991) by Seth Klarman
Good luck finding this book. It’s been out of print for years, and used copies are on sale for around $900. However, if you can find a PDF version online, you’ll be rewarded with techniques on how to invest profitably with a margin of safety. Seth Klarman, co-founder of Baupost Group, a multi-billion dollar investment firm, digs into how investors are lured into the false promises of profits on Wall Street by overpriced investment managers. He explains his value investing philosophy and why it’s superior to other strategies. Klarman provides investors a blueprint for how to apply his own strategy to picking stocks. Follow the advice in this book and you as an investor will be miles ahead of everyone else. No wonder the book is so rare and desirable.
Robert Nowak is the founder of RTN Investments, LLC. RTN is a registered investment advisory managing separate accounts for clients and is modeled after Warren Buffett’s original partnerships. RTN’s goals are the preservation of client’s capital and to outperform the S&P 500 on a rolling 5 year basis by investing in undervalued stocks of high quality companies.