Stock and Options Trading Book Suggestions?

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I’m currently finishing up All About Asset Allocation by Richard Ferri and I think I’ve had my fill of books about index funds. Now that my primary portfolio is set up (I’m fighting the urge to tinker already), I’m considering splashing around with individual stocks again! So I’m looking for some book suggestions. Here are some I’ve heard good things about:


Are these really worth a read, or are they just marketed to the masses? I’d like to read some books about stock valuation methods, but maybe also some about technical trading as well, if those exist? Maybe a good introductory book to options trading as well. Anyhow, throw them at me and I’ll check them out at my local bookstore or Barnes.

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Comments

  1. My favorite book on trading is called “Reminiscences of a Stock Operator (A Marketplace Book)” by Edwin Lef?vre.

    It’s really not a “how to” manual as much of a historical look back at the life of an extremely significant trader, but it’s fun and has lessons that are applicable to any market in any age.

    Another favorite is: “Where Are the Customers’ Yachts? or A Good Hard Look at Wall Street (A Marketplace Book) (Paperback)
    by Fred Schwed “. In fact, I need to go reread both of these this summer.

  2. I am pretty new to investing and have been following your blog for quite some time now without posting comments before. Anyway great blog! keep up the good work. Now to some suggestions : Ive read One Up On Wall St by Peter Lynch. I must say its a very readable book with good valuable insights and strategy. I am currently reading The Intelligent Investor and can easily see why this is a must read for any investor! Hope that helps.

  3. I am pretty new to investing and have been following your blog for quite some time now without posting comments before. Anyway great blog! keep up the good work. Now to some suggestions : Ive read One Up On Wall St by Peter Lynch. I must say its a very readable book with good valuable insights and strategy. I am currently reading The Intelligent Investor and can easily see why this is a must read for any investor! Hope that helps.

  4. “Starting and Running a Profitable Investment Club”. It’s not a good title but will teach you how to invest in individual stocks. I’ve read them all, and it doesn’t get any better than this.

  5. I’m surprised that a guy who goes out of his way to get $25 bonus from a bank gives out stock trading commissions so easily. Wouldn’t it be better to have a diversified portfolio with Vanguard and make deposits into it- avoiding all transaction costs month in and month out? Especially for someone still early in the accumulation phase. What are your thoughts?

  6. I also recommend Warren Buffet Way by Hagstrom, You Can Be a Stock Market Genius by Joel Greenblatt (special situations and arbitrage for the individual investor), and Phil Town’s Rule #1.

  7. Greling Jackson says

    “The Essays of Warren Buffett : Lessons for Corporate America by Warren Buffett”

    Don’t buy this. They’re essentially the Chairman’s letters of his company’s annual meeting of shareholders.

    Now, I said don’t buy it. That doesn’t mean don’t read it. It’s actually good material. But, you can get these letters (called “essays” by them) for FREE, off of his company’s website by actually reading the archived letters themselves:

    Warren Buffett’s Letters To Berkshire Shareholders 1977 – 2005
    http://www.berkshirehathaway.com/letters/letters.html

  8. Simple Stock Trader says

    Market Wizards by Jack Schwagar, excellent book of interviews with some of the greatest traders.

    How To Make Money In Stocks by William O’Neil, excellent book for selecting stocks.

    Dave Landry On Swing Trading by Dave Landry, excellent book for short term trading based on technical analysis. My favorite patterns.

    How Markets Really Work: A Quantitative Guide to Stock Market Behavior by Larry Connors, discusses common mis-beliefs about market action.

    Dave and Larry’s books are pretty expensive, but you can read the books on Amazon using the “searh inside” if you know how to find your way around. You can only view about three or four pages at a time, but if you have patience and don’t mind sitting in front of the pc for a while, it’s free.

    Avoid any title that has the word Rich, Quick, or Dummie in the title.

  9. You website is hot, but I guess trading is a totally differet business. Not everyone can stand the pain.

    You will find the three following books that you could read over and over for years, and everytime reading you can learn new things.

    Reminiscences of a Stock Operator
    Market Wizard
    The New Market Wizard

    This will get you started for the Technical Analysis: Technical Analysis of the Financial Markets, by John Murphy.

    No Fundamental analysis for people like us, because I believe the ones know the fundamental make the chart.

    Last warning from Bernard Baruch: unless you could treat trading as full time job, don’t bother.

  10. great blog sites. lots of good tips. 🙂 I like the book “All About Market Timing”. For my 401k , like most everyone else and I just buy and hold certain mutual funds. but for my “play money” I have found that market timing to be more profitable and conservative than just buy and hold index fund.(buy and hold won’t save you from a market crash) also if you are a risk taker and want to make the big money, I suggest you read up on how to play stock options. good luck!

  11. Try subscribing to John Mauldin’s free e-newsletter. He has a great macro perspective of economics and should help you with your overall investment strategy. Great website btw.

  12. Seriously go here for lots of articles on options, futures, forex, etc. It is a great resource with helpful examples. http://www.investopedia.com

  13. Only people benefitting from investing books are the authors and publishers of these books.

    Do you think if the author had a way to beat the market he would share it with the world ?

    And even if he shares such an idea with the world, how long do you think it will take for that idea to become useless once everyone starts using it ?

  14. I was looking at the competition of the investopedia simulator was amazed by how this person with id “yiyi1011” turned $100,000 into $277,000 in just a month. Of course this is just inside a simulator but still I don’t believe it was just by luck. He/she must know something that is worth researching.

  15. MM, initially I shared your cynical view on investing book, so I played stock the first 5 years thru word of mouth or my feeble instinct. then a couple years ago I happened to run across a stock book at my friend’s place and I was amazed at how much good information is in the book. I concluded if I had followed this books advice, I would have earn a lot more money. From then on , I must have bought at least 5 more stock books. I can tell you the books not only have helped me make good money, but it gives me the confidence to sleep well at night knowing my plan works. the key I think is to read from muliple sources and grasp the bigger concept. Warren Buffet’s famous line : “First rule is never to lose money. Second Rule is never to forget the first rule” becomes more than just meaningless cliche, it becomes the basis of all my trades. hopefully like some authors whose book I have enjoyed, if I ever “make it” and retire comfortably , I will definitely write a stock book myself and help others.

  16. nice job on your blog-for options I would suggest you roll over to http://www.cboe.com/ the home of the Chicago Board Options Exchange. They offer great information-free and a chance to evaluate different strategies. For Stock trading look at Investors Business Daily, mot free, but they have good charts and timely ideas. Good Luck!

  17. Jason,
    How can you invest if your first rule is never to lose money ? Does that mean that you simply dont sell the stocks that are under water ?

  18. The Intelligent Investor is a great book, but it is a very dry read for most people. Another good way to start to get a feel for what Buffett’s approach involves would be to read the excellent biography by Roger Lowenstein, “Buffett: The Making of an American Capitalist”. It gives a great high-level overview of Buffett’s investing approach and the reasoning behind it, as well as providing a much more entertaining read.

    Two other great investing books are 1) “Common Stocks and Uncommon Profits” by Philip Fisher (this is the classic book on “growth” investing, which emphasizes investing in companies that will support strong future growth, as opposed to Buffett’s pure “value” approach, which focuses on finding stocks that the market is undervaluing) and 2) “The Gorilla Game” by Geoffrey Moore (specifically about growth investing in technology). Peter Lynch’s books, mentioned above, lay out a “growth at a reasonable price” (GARP) approach, which is a good approach that is a middle road between value and growth investing.

    If market timing is more your game, a good blog that helps you get up to speed on the factors that move the overall market day-to-day is The Kirk Report (http://www.kirkreport.com).

  19. Getting into options, I really liked “The Conservative Investor’s Guide to Options” by Leroy Gross. It explains different strategies in each chapter, then explains why they are or are not appropriate for the conservative investor. The only problem with the book is that it pre-dates discount brokers, so the examples all use very high commissions and unrealistically high option prices (option prices have been at historical lows for the past few years if I remember correctly).

  20. I like Bob Carlson’s Eight Steps to Seven Figures. Its one of my favorites. Carlson’s main idea is that you don’t need to look for a ten bagger, just find stocks that, year by year, give you a steady return.

    If you can find a copy at your public library, definetly check it out!

  21. Benjamin Graham is a tough read. The little book is ok but I wasn’t really comfortable with the implementation of Joel’s proposal.

    Lynch really tries to get you to think like he does, all to the good.

    Try Al Frank’s Prudent Speculator book. From his history, to his method, to its implementation; he gives a workplan and a reasoning on solid investment.

    Let me know what you think.

  22. Read this:

    Short-Term Trading in the New Stock Market, by Toni Turner.

    You will learn the value (and validity) of technical analysis. There are no strategies in this; just education.

    All individual investors should know how to read charts and understand Technical Analysis regardless of their investment strategy (long term, swing, day, contrary, etc.). After reading this, I highly recommend you learn more about FOREX trading (pure technical analysis), Futures, and options trading.

    There are way, way more investment options for Americans that most people realize. All you need to do is SAVE YOUR MONEY and LEARN…

  23. The Intelligent Investor by Ben Graham is a must read in my opinion. For a good article on the book check out: http://www.time.com/time/insidebiz/article/0,9171,1101030714-463093,00.html

    I’ll throw out another book and seek comments for anyone who has read it: The Coming Economic Collapse: How You can Thrive When Oil Costs $200 a Barrel, by Stephen Leeb. The basic premise is that oil is in decreasing supply and world demand is increasing. This will create an investment environment similar to that of the 1970s when oil prices shot up, “stagflation” was the norm, and when large cap stocks floundered. The author suggests companies and investments that should “thrive” when oil prices continue to go up. The good thing about the suggestions is that all the companies are in line with Grahamarian value investing (low price book number etc). Certainly a thought provoking book since I never really considered the price of oil affecting my investment strategy before.

  24. MM,
    responding to your question…. I think what Warren Buffet means is you should be a patient yet vigilent investor. I usually wait until the best possible moment to invest, therefore reducing the probablity of losing money in the first place. in the event I am wrong , I keep an close eye on my loser stock and find out why. if furthur analysis show I am right, I would average down just once (and never average down again). but if I am wrong, I quickly cut a losing position before it comes too large. remember if you lose 50% in something, you’ll have to gain 100% just to make it back. this is my philosphy of “Never to lose”. but if you want to read on how to pick stocks(or index funds), you need to really study all aspect of fundament/techinical anaylsis. if you treat this subject seriously then you’ll get serious result. good luck! 🙂

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