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January 2, 2010
Stock Investing Books

Stock investing books can broaden perspective, improve trading or investing, and help the trader or investor develop and maintain a consistently successful strategy. From a group of Wall Street Journal reporters who threw darts at the stock pages to Ben Graham, Peter Lynch, and Warren Buffet to Bigalow’s book on High Profit Candlestick Patterns there is insight in the writings of those who have studied and successfully worked at making money in the stock market.

Ask people who have read widely about stock market investment and two stock investing books are almost always at the top of the list, “The Intelligent Investor” by Ben Graham and “One Up on Wall Street” by Peter Lynch. Graham was an economist and investor who taught. He was the first to promote value stock investing and promoted a defensive style for those without the time or interest to work hard on investing versus an enterprising approach for those with time and interest. Peter Lynch was a famous fund manager who advises investors to start with what they know from their own business and life as a base for choosing stocks to invest in.

The book “A Random Walk Down Wall Street” reviews many investing styles and emphasizes the relative fairness of pricing on Wall Street. The argument is made that picking stocks randomly, providing that one picks enough stocks, will generate a steady rate of return on investment. The more valuable part of this one of our stock investing books is the review of various styles of investment in stocks. However, understanding the basis of the author’s argument about the “Random Walk” will give insight into how to exploit small cap stock investing in companies that analysts don’t really follow closely. The random walk information is useful in understanding how Lynch grew the Magellan Fund into a powerhouse.

“Security Analysis” by Ben Graham is a compendium of how to analyze investments and “High Profit Candlestick Patterns” by Bigalow is a guide to understanding and using Japanese Candlestick patterns. These stock investing books are both “how to” books that don’t dwell on picking stocks nor how to balance portfolios but get down to the nitty gritty of following a stock’s performance, buy, selling, and making a healthy profit.

One more of our list of stock investing books is Cunningham’s “The Essays of Warren Buffett.” These writings cover a wide range of business and investment topics. The information is always very practical and parts can be used as a primer for things like options trading. Many topics in this book do not deal directly with investing but the insight that one gains into the operation of successful, and unsuccessful, businesses can be invaluable in making stock trading and investment decisions. None of the stock investing books listed here require that you dutifully read them cover to cover in order to get any use out of it, although it is advised. As with many ways of gaining insight into stock market investing, one can read a little to get a feel for any of these books and then pick them up from time to time as a reference or for inspiration.

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