Investing Books

When it comes to reading investing books, we don’t become better investors by reading more books. We become better investors by reading the right books.

The following is Lumovest’s official recommended reading list for eager readers. The 7 books below are all centered around the fundamental analysis school of thought and complementary to our online courses.

1

Competitive Strategy

By Michael E. Porter

Business Quality

Michael E. Porter's Competitive Strategy has transformed the theory, practice, and teaching of business strategy throughout the world. More than a million managers in both large and small companies, investment analysts, consultants, students, and scholars throughout the world have internalized Porter's ideas and applied them to assess industries, understand competitors, and choose competitive positions. The ideas in the book address the underlying fundamentals of competition in a way that is independent of the specifics of the ways companies go about competing.

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2

The Dhandho Investor

By Mohnish Pabrai

Investing Mindset Business Quality

In a straightforward and accessible manner, The Dhandho Investor lays out the powerful framework of value investing. Written with the intelligent individual investor in mind, this comprehensive guide distills the Dhandho capital allocation framework of the business savvy Patels from India and presents how they can be applied successfully to the stock market. The Dhandho method expands on the groundbreaking principles of value investing expounded by Benjamin Graham, Warren Buffett, and Charlie Munger. Readers will be introduced to important value investing concepts such as "Heads, I win! Tails, I don't lose that much!," "Few Bets, Big Bets, Infrequent Bets," Abhimanyu's dilemma, and a detailed treatise on using the Kelly Formula to invest in undervalued stocks. Using a light, entertaining style, Pabrai lays out the Dhandho framework in an easy-to-use format. Any investor who adopts the framework is bound to improve on results and soundly beat the markets and most professionals.

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3

The Essays of Warren Buffett

By Warren E. Buffett (Author), Lawrence A. Cunningham (Compiler)

Investing Mindset Business Quality

Readers of Warren Buffett's letters to Berkshire Hathaway shareholders have gained an enormously valuable informal education in the art of investing. Broad in scope and long on wisdom, Buffett's letters explain his principles on sound investing, selecting managers, valuing businesses, using financial information profitably, and other vital topics for investors. In this latest edition, Buffett divides the investing lessons into Corporate Governance, Finance and Investing, Investment Alternatives, Common Stock, Mergers and Acquisitions, Valuation and Accounting, Accounting Shenanigans, and Taxation.

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4

Fooling Some of the People All of the Time

By David Einhorn

Case Study

This is a detailed case study on Greenlight Capital’s short-sell investment of Allied Capital. It describes the multi-year battle between the two parties and illuminates how questionable company practices are maintained and, at times, even protected by Wall Street. Readers will gain a sense of the level of detailed research and analysis professional investors perform to analyze stocks and how Wall Street bankers and analysts don’t always act for the best interest of the investors.

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5

Margin of Safety

By Seth A. Klarman

Investing Mindset Special Situations

In this book, Seth Klarman teaches the risk-averse investing strategies for the thoughtful investor. Unfortunately, this rare book is out of print and sold on Amazon for over $1,000. We don’t recommend readers to purchase it at that price. Instead, you should check online sources and local libraries to see if they have a copy.

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6

The Most Important Thing

By Howard Marks

Investing Mindset

Howard Marks's The Most Important Thing distilled the investing insight of his celebrated client memos into a single volume and, for the first time, made his time-tested philosophy available to general readers. In this edition, Marks's wisdom is joined by the comments, insights, and counterpoints of four renowned investors and investment educators: Christopher C. Davis (Davis Funds), Joel Greenblatt (Gotham Capital), Paul Johnson (Nicusa Capital), and Seth A. Klarman (Baupost Group).

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7

You Can Be a Stock Market Genius

By Joel Greenblatt

Case Study Special Situations

A comprehensive and practical guide to the stock market from a successful fund manager—filled with case studies and detailed lessons on special situations, including: spin-offs, restructuring, merger securities, rights offerings, recapitalizations, bankruptcies and merger arbitrage.

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