8/8/2019 Top 10 Books for Long-Term Investing

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Top 10 Books for Long-Term Investing

There are many other great books on trading, economics, the psychology of investing,

the history of finance, etc. that I haven't included in this list, but that contain

valuable insights for investors. This list strictly deals with how-to books for successful

long-term investing.

If you read these 10 books (one isn't even a book, it's an essay) and you follow the

basic precepts (buy value, buy safety, buy businesses with a durable competitive

advantage, allow your investments to compound over many years), I have no doubt

you can easily earn 15%-30% per year, after tax. My only other assumptions are that

you're capable of reading English on a 10th-grade level and that you can handle basic

math with the help of a calculator.

Your investing shouldn't require more than 10 hours per week. If you make more than

two to three investments per year, you're working way too hard.

You can buy all of the books on this list easily and cheaply (except for Seth Klarman's

book, which is out of print). If you study them all carefully, it might take you six

months. Your total tuition wouldn't equal $1,000 and you'd know far more about

how to be a successful investor than 99% of the world's top MBA graduates.

Being a successful investor takes a little bit more than just knowledge. You've also got

to master the traits listed in the very first "book" on my list. It's an essay written by

Richard Russell. It contains the only real secret to becoming wealthy: the power of

compound interest. It also demonstrates the key emotional distinction between

wealthy people and everyone else:

"...The wealthy investor tends to be an expert onvalues. And if no outstanding values

are available, the wealthy investor waits... But what about the little guy? This fellow

always feels pressured to 'make money.' And in return he's always pressuring the

market to 'do something' for him. But sadly, the market isn't interested... And

because the little guy is trying to force the market to do something for him, he's a

guaranteed loser. The little guy doesn't understand values so he constantly overpays.

He doesn't comprehend the power of compounding, and he doesn't understand money.

He's never heard the adage,

'He who understands interest earns it. He who doesn't understand interest pays it.'"

With this emphasis and my earlier caveats, here are my personal top 10 books on

common stock investing.

8/8/2019 Top 10 Books for Long-Term Investing

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1. Richard Russell, "Rich Man, Poor Man" (available free at

http://www.dowtheoryletters.com/DTLOL.nsf)

2. Ben Graham, The Intelligent Investor(especially chapters 8 and 20)

3. Warren Buffett, the letters of Warren Buffett (available free

http://www.berkshirehathaway.com/)

4. Mohnish Pabrai, The Dhandho Investor

5. Tweedy, Browne, "What Has Worked in Investing" (available free at

http://tweedy.com/content.asp?pageref=reports)6. David Dreman, Contrarian Investment Strategies

7. Joel Greenblatt, You Can Be a Stock Market Genius

8. Martin J. Whitman, the letters of Marty Whitman (available free at

http://www.thirdavenuefunds.com/taf/aboutus-shareholder-letters.html)

9. Martin J. Whitman, Value Investing

10. Seth Klarman, Margin of Safety