Books to get to the "Next Level"

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igmitb
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Books to get to the "Next Level"

Post by igmitb »

Quick background: I'm currently a college student, finance major, who's looking to learn as much as possible about finance/the markets/investing/etc. I have taken the basic courses such as financial and managerial accounting, economics, and introductory finance.

I have a pretty strong grasp on the basics of investing: the various securities and their risk/return, how trading works, etc.

But I would like to take my knowledge to the next level. What are the best books to do this?

I've heard good things about Graham's "Intelligent Investor", and Jim Cramer's "Mad Money", but wanted your opinions.

I am interested in BOTH books on personal finance/investing and about Wall Street in general, as I have recently read Liar's Poker and found it most interesting.
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SoonerSunDevil
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Re: Books to get to the "Next Level"

Post by SoonerSunDevil »

igmitb wrote:Quick background: I'm currently a college student, finance major, who's looking to learn as much as possible about finance/the markets/investing/etc. I have taken the basic courses such as financial and managerial accounting, economics, and introductory finance.

I have a pretty strong grasp on the basics of investing: the various securities and their risk/return, how trading works, etc.

But I would like to take my knowledge to the next level. What are the best books to do this?

I've heard good things about Graham's "Intelligent Investor", and Jim Cramer's "Mad Money", but wanted your opinions.

I am interested in BOTH books on personal finance/investing and about Wall Street in general, as I have recently read Liar's Poker and found it most interesting.
Don't read anything by Jim Cramer if you want to understand investing. Jim Cramer teaches people about trading; please don't confuse the two. Pick up a few of Rick Ferri's books or one of Larry Swedroe's books.

John
xenial
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Post by xenial »

There's a good thread on investing books in the forum's reference library.

Best wishes,
Ken
heyyou
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Post by heyyou »

My favorite author is Larry Swedroe. The Only Guide to a Winning Investment Strategy is his best single book, not to be confused with a newer book on bonds with a similar title.
Wm Bernstein stresses the learning of market history to better understand what to expect as an investor. His Four Pillars of Investing is excellent. His earlier book has more math and his later one is economic history, not investing.
Roger C. Gibson's Asset Allocation is a textbook for passive investment advisors, reads like a textbook too, but the info that he presents is timeless. His book was the best of the first in the mid 1990's. Get the updated edition at the library, it is not cheap.
The Bogleheads' Guide to Investing is the best beginners book for personal finance. The previous books are investment oriented. Bogleheads helps people learn to save money then teaches investing.
All of those books teach passive investing. I liked the repetitive message from different authors.
Other important reading is at some websites:
The library here has some excellent articles.
Evanson Asset Management has concise articles on the same topics as the books listed above.
Vanguard mutual funds has a newletter with good articles, as does TIAA-CREF.
The Altruisticfa.com library has links to a hundred significant research papers.
DFA mutual funds has well written articles on asset allocation topics.
Being well read helps you understand the info instead of just knowing the usual answer to a specific question. That is what I like about Swedroe's books, he gives background to support his statements.
Joe
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wwhan
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Post by wwhan »

A very useful book is:

"The Intellegent Asset Allocator" by William Bernstein, 2000

This helps with looking at asset allocation, once you understand low expenses and and index finds.

A broad diversified asset allocation is important for long term investing.

Main point is one can be between 80/20 or 20/80 FixedIncome/stocks, but outside this range is more risk. Also one needs international diversification.
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Clutch Cargo
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Post by Clutch Cargo »

igmitb,

Congratulations on your college career in finance!

I can personally attest that the books mentioned by the others on this thread, most of which can be found listed in this forum's Library, are truly excellent. Every one that I've read has opened my eyes and most importantly has taught me to think for myself rather than just blindly trust the advice and recommendations of so-called professional advisors and experts, most of whom really have no more information available than I do with access to the Internet and the mentorship of authors like John Bogle, William Bernstein, Larry Swedroe, Burton Malkiel, Richard Ferri, Taylor Larimore, Mel Lindauer and Benjamin Graham (many of whom regularly participate on this forum). My recommendation would be to start with John Bogle's "Common Sense on Mutual Funds" or "Little Book of Common Sense Investing." Once you understand Mr. Bogle's theories, I guarantee your appetite will be sufficiently whetted so that you too will be checking off most of the books by the other authors mentioned above.

Clutch Cargo
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zhiwiller
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Post by zhiwiller »

I read Jim Cramer's Mad Money back in my pre-Diehard days and found it light on actual content. You probably won't find much in there if you have a basic understanding of markets. He tells people that they can succeed by investing in the market and since people want to hear that, they think he is a genius guru. I don't recommend it because I am now a diehard, but simply because it just isn't a good book.

I'd recommend Bogle's latest book, Graham's Intelligent Investor (although realize it is dated. Index funds didn't exist!), and the ever-useful Boglehead's Guide. But I learned the most by lurking here in the forums, which is my highest recommendation.
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bob90245
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Re: Books to get to the "Next Level"

Post by bob90245 »

igmitb wrote:I am interested in BOTH books on personal finance/investing and about Wall Street in general, as I have recently read Liar's Poker and found it most interesting.
For the latter category, you might find these two books by Peter Bernstein interesting:

Capital Ideas: The Improbable Origins of Modern Wall Street

and

Capital Ideas Evolving

I haven't read the second book. It just came out. But I read the first one and thoroughly enjoyed it.
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White Coat Investor
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Post by White Coat Investor »

While I agree with all that has been said, DO read The Intelligent Investor by Benjamin Graham. It is a classic for a reason.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
livesoft
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Post by livesoft »

If you read Graham's book, get the edition with commentary by Jason Zweig which brings it up to date.

Oh, didn't anyone tell you: There is no next level.
unclemick
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Post by unclemick »

Hmmm - Do not read any stinking books! It's dangerous to your long term financial health. Succesful investing is a matter of faith not reading .

This be the Bogleheads forum! Flip a coin - then pick Target Retirement series appropriate for your age or if you must be active do Total Stock Market Index and dribble in Total Bond Market as the decades pass(110 - your age or something like that).

Keep it stone simple.

Then read/take courses/graduate and 'do' your career.

heh heh heh - of course I never did that(1966-2006) and nobody ever listens to me(including myself) - BUT I did throw in the towel and consolidated my retirement(13th yr) in Vanguard Target Retirement 2015 in recognition of my brilliant forty year past of er reading/thinking/investing. Still have 15% individual stocks - some diseases can't be cured - only managed! :roll: :wink:
Last edited by unclemick on Mon Jul 16, 2007 12:54 pm, edited 1 time in total.
Valuethinker
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Re: Books to get to the "Next Level"

Post by Valuethinker »

igmitb wrote:Quick background: I'm currently a college student, finance major, who's looking to learn as much as possible about finance/the markets/investing/etc. I have taken the basic courses such as financial and managerial accounting, economics, and introductory finance.

I have a pretty strong grasp on the basics of investing: the various securities and their risk/return, how trading works, etc.

But I would like to take my knowledge to the next level. What are the best books to do this?

I've heard good things about Graham's "Intelligent Investor", and Jim Cramer's "Mad Money", but wanted your opinions.

I am interested in BOTH books on personal finance/investing and about Wall Street in general, as I have recently read Liar's Poker and found it most interesting.
Bodie and Kane, Investments

Financial Markets and Corporate Strategy (Greenblatt and Titman) -- you probably had to read the infamous Brealey and Myers 'Principles of Corporate Finance', G&T is a better book albeit more involved.

John Kay The Foundations of Corporate Success - a slightly more academic version of Porter, below

Michael Porter (of course): Competitive Strategy, Competitive Advantage - what makes great companies great

Bazerman on Managerial Judgement and Decision Making -- how businesspeople make decisions

From Good to Great by Jim Collins - what makes a great company

Anything by Thomas Schelling (but the nontechnical ones first) - game theory is the root of most of what goes on in finance

On investing generally, Burton Malkiel stands heads above all the others.

For entertaining reads about markets: FIASCO by Frank Partnoy, Moneyball by Michael Lewis, Barbarians at the Gate, The Predator's Ball. Dan Reingold's book on the dot com bubble is good. Barton Bigg's book on hedge funds 'Hedge Hogging' is very funny and droll.

Kindleberger's Manias Panics and Crashes is instructional. Ditto Adam Smith's 'The Money Game' (quite old now).
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Post by Valuethinker »

EmergDoc wrote:While I agree with all that has been said, DO read The Intelligent Investor by Benjamin Graham. It is a classic for a reason.
I would heartily endorse that.
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Blackhawkzone
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Post by Blackhawkzone »

any of the dummies books

personal finance for dummies
investing for dummies
etf's for dummies
hedge funds for dummies

Live it up without outliving your money by Paul Merriman

Investing with Exchange-Traded Funds Made Easy: Higher Returns with Lower Costs--Do It Yourself Strategies Without Paying Fund Managers by Marvin Appel
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Behavioral Economics

Post by Alex Frakt »

I think it's useful to have an understanding of behavioral economics: why people make non-rational economic decisions (at least from the point of view of classical economics).

Why Smart People Make Big Money Mistakes by Gary Belsky and Thomas Gilovich is the best book I know of on behavioral economics. It's also covered to a reasonable extent in Swedroe's Rational Investing in Irrational Times.
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igmitb
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Post by igmitb »

Thank you!
matt
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Post by matt »

Recipe for gaining investment knowledge:

1. Go to your local library.
2. Proceed to the section with dewey decimal code HB-HJ.
3. Read everything interesting in that section.
gkaplan
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Post by gkaplan »

I don't believer that's the Dewey Decimal Code. More likely, the Library of Congress Classification System.
Gordon
matt
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Post by matt »

Just proves that you don't even need to know what you're talking about to find good investment books!
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craigr
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Great book...

Post by craigr »

Since you're looking to go to the next level...

One of the best books on understanding Wall Street is:

Where are the Customer's Yachts?

Another great book that is hardly ever recommended here but really captures a lot of good advice about life, business and investing:

The Richest Man in Babylon
Pangloss
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books

Post by Pangloss »

If you only read one more book on investing, I think it should definitely be The Intelligent Asset Allocator. Bernstein's Four Pillars is good, but a bit longer and not quite so technical. Also high on the list are David Swensen's books and all of the books on William Bernstein's reading list (http://www.efficientfrontier.com/reading.htm), particularly Devil Take The Hindmost. I've also read some some of Larry Swedroe's books and, of course, Boglehead's Guide. I think that Irrational Exuberance would probably be worth your time.

Lastly, I would suggest Portfolio Selection by Markowitz and Manias, Panics, and Crashes by Kindleberger with the disclaimer that I haven't yet completely read either of those.
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CyberBob
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Post by CyberBob »

Recipe for gaining investment knowledge:

1. Go to your local library.
2. Proceed to the section with dewey decimal code HB-HJ.
3. Read everything interesting in that section.
Reading to gain knowledge is good advice. As Benjamin Franklin said, "An investment in knowledge pays the best interest."
However, Financial Economics actually starts at 332 in the Dewey Decimal system. 332.024 for Personal Finance to 332.6 for Investing.

As for specific 'Next Level' books, try The Intelligent Asset Allocator and The Four Pillars of Investing by William Bernstein.
And Bogle on Mutual Funds, Common Sense on Mutual Funds, and The Little Book of Common Sense Investing by John Bogle.
And even though it's aimed a bit more toward financial advisers than individual investors, Asset Allocation: Balancing Financial Risk, by Roger Gibson is a good 'Next Level' read.

Bob
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fundtalker123
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Post by fundtalker123 »

Read John Bogle's new Little Book of Commonsense Investing

After that, if you believe his advice, there is probably no need to read anything else.
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Yuba
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Re: Books to get to the "Next Level"

Post by Yuba »

Valuethinker wrote: Dan Reingold's book on the dot com bubble is good.
That one is called "Confessions of a Wall Street Analyst.".

It is the book that convinced me to get rid of individual stocks from my portfolio. Using funds and etfs now.

Rick dba Yuba
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