The Investor’s Bookshelf

By Nancy Zambell, BrokerAdviser.com | Oct 01, 2008 | 3 comments

At just about every financial show at which I speak, several investors will ask me, "How can I learn more?"

I asked myself this question more than twenty years ago when I first embarked upon my investing career, and the answer was easy - I just read everything I could find that addressed the subject of investing.

Of course, that was before the advent of Internet access for the masses as well as the proliferation of investment TV channels and the hordes of magazines devoted to investing. Today, there is a plethora of information bombarding investors - many good, even great sources of education, but, unfortunately, a lot of bad advice, too.

And although I’ve been in this business for many years, one of my favorite pastimes continues to be reading and learning about what’s new in investing. Truthfully, I am often amazed at the drivel that gets published, purporting to be  "proven, successful" investing strategies. Most of this stuff has just one purpose - enriching the author. And while you may first think, "So what?" - this is American capitalism at its best - the problem is, some of this advice is very detrimental to the investors who act upon it.

I’ve pretty much seen it all, including:

    - Systemic strategies that work well just a couple of times but are extrapolated for investment essays or books as "make you rich," "never fail," "can’t miss" guides to investing success

    - Intentional, fraudulent advice aimed at hyping worthless stocks

    - Just plain, old bad advice that promises great wealth, but often forgets to mention the tremendous risks involved in chasing those riches

I hate seeing the individual investor taken for a ride, so I thought it might be a good idea to give you some recommendations for investment books that I feel genuinely do offer some good tips for investors.

Now, I have to say, as a diversified, value-growth investor, I also don’t always agree with them about all of their advice. After all, not many financial professionals agree about much of anything!

But my purpose here is to give you a selection of publications that contain a wide range of solid advice that will inspire you to seek even more information to help you advance your investing success.

Hands-down, the most important book I have ever encountered and which I credit with helping me begin my career on the right track is:

Graham and Dodd’s Security Analysis, by Cottle, Murray & Block. First printed in 1934, this book is the bible of security analysts everywhere, delving into exactly how to analyze a company for investment purposes. It is not a chatty, conversational tome like most investment books on your retailer’s shelf, but it is the essential book to begin with if you are a serious long-term investor.

A very good accompaniment to the above book, The Intelligent Investor, by Benjamin Graham (yes, the Graham from the above book), first published in 1949, gives the investor much greater insight into this value investor’s thinking - strategies that remain viable and successful almost 60 years after its first publication.

For a couple more oldies but goodies, try ex-Fidelity Magellan manager Peter Lynch’s One up on Wall Street, and Beating the Street. While some of the data may be out-of-date, the common sense advice is still good.

Widening our search, it’s imperative that even if you are not a fixed income investor that you are aware of and knowledgeable about income investing. Income investing is not your grandfather’s version - corporate and government bonds and certificates of deposit - any longer. A much wider range of income investments is available now, so many that the word ‘fixed’ is being erased from the category name. I have recently read an excellent book on this subject, Richard Lehmann’s Income Investing Today: Safety and High Income through Diversification.

For specific strategies that might be interesting additions to your existing portfolio, you may want to try Charles Carlson’s Winning with the Dow’s Losers, or The 25% Cash Machine, by Bryan Perry.

Mostrous, Gue and Martchev’s, The Silk Road to Riches, is a very different take on the future of the United States as compared to India’s and China’s growing economic and investment riches.

For a spirited view of the mutual fund industry, try Vanguard founder John Bogle’s Common Sense Investing.

These are just a few of my favorites that will broaden your investment education. I encourage you to keep reading, seeking more knowledge. But please maintain a skeptical eye. If it sounds too good to be true, it probably is!

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