52 Books To Read Before Buying Your Next Stock

Funds management involves a lot of synthesis of information and a lot of reading. Over the years we all end up reading many investment books and refer to them from time to time.

We thought it would be a good idea to compile a list of books that have influenced our investment style or helped provide insight into the investment process.

Whilst not an exhaustive list, we will recommend one book a week to read, for a year. This list should provide a good starting point for any interested investor.

50 — Methods of Trading in Stocks by Richard D Wyckoff and Jesse Livermore

Jesse Livermore was famed for making several multimillion-dollar fortunes and losing them during the stock market crashes of 1907 and 1929. The material presented in this book was obtained by Richard D. Wyckoff through exclusive interviews with Jesse Livermore. This is a ‘must read’ investment book in which Jesse Livermore gives his opinion of what […]

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49 — Trading in the Zone by Mark Douglas

When we are giving shareholder and investor presentations and explaining our investment process we say that ‘we like to buy stocks that are going up and sell stocks that are going down’. We do this using a combination of fundamental and technical research. A common response to this statement is; ‘Oh that seems quite easy, […]

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48 — Blue Ocean Strategy by W. Cham Kim and Renee Mauborgne

The co-authors of this book are both professors at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute. They argue that companies can succeed by creating ‘blue oceans’ of uncontested market space, as opposed to ‘red oceans’ where competitors fight for dominance and where an ocean full of vicious competition turns red with blood. […]

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47 — Betting on Zero directed by Ted Braun

This documentary was produced in 2016 by Ted Braun so strictly speaking is not a book….but it should be. As a reward for having read nearly 50 books on the Cadence list of 52 Books To Read Before Buying Your Next Stock you can have a week off by watching this nearly 2-hour long documentary. […]

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46 — Black Swan by Nassim Nicholas Taleb

Nassim Nicholas Taleb’s first book, Fooled by Randomness, is a well deserved number 2 on our list of books to read before buying your next stock.  Black Swan, his second book, covers similar concepts to Fooled by Randomness. It is an excellent book that often made me question my own long held beliefs.  The book […]

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45 — Beating the Street by Peter Lynch

This book is written for ‘Mum and Dad’ investors by one of the world’s most successful Fund Managers who made his name managing the multi-billion dollar Fidelity Magellan Fund. He holds nothing back in his detailed advice on how Mum and Dad investors can ‘Beat the Street’ and outperform Institutional Fund Managers. He openly discusses […]

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44 — Trade Like an O’Neill Disciple by Gil Morales & Dr. Chris Kacher

This book was written by two portfolio managers who worked for William O’Neill and as such are practitioners of the William O’Neill investment philosophy which we as an organisation have written extensively about. Our own investment philosophy is an adaptation of the William O’Neill investment process. As the authors observe, ‘while most investors do not […]

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43 — Chindia: How China and India are Revolutionizing Global Business by Pete Engardio

Karl Siegling recently wrote a resources article for the ASX where he noted “Readers may remember the resources mantra of ‘stronger for longer’ from around 2002 until 2007, initially the story was one of China growth. As the resource boom continued the mantra evolved to ‘stronger forever’ and included India so that the combined mantra became […]

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42 — Signals by Dr Pippa Malmgren

In this book first released in 2015 and updated in 2016 to reflect the Brexit vote, the author discusses how everyday signs and events can help us to navigate the World’s turbulent economy. Dr Malmgren argues that being alert to the many smaller signals around us, we can take advantage of larger scale situations. Inflation […]

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41 — The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks

What caught my eye about this book was what Warren Buffet had to say. “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something, and that goes double for his book.” This successful American investor is renowned for his “Oaktree memos” which he […]

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40 — Masters of the Market : Secrets of Australia’s leading sharemarket investors (1st Edition)

I first read this book not long after it was published in 2003 and really enjoyed it.  At the time there were many books written on successful American fund managers, but Masters of the Market was the first book to focus on Australian fund managers. Each chapter in the book is an interview with a […]

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39 — Buffett – The making of an American Capitalist by Roger Lowenstein

This is a very well written biography on one of the world’s most successful stock pickers. This book gives the reader in-depth insights into the investment mind of Buffet during the first 40 years of his investing career. It covers in detail ten or so of his earlier investments and shows over time how the his Investment Philosophy evolved. As an investor there are numerous things to be learned in this book. One of the things that struck me was how extremely patient Buffet was. He would be happy to sit in cash for long periods at a time until it was the right time to start investing into an investment. He also felt very strongly that you should only invest into things that you completely understand. This book was also very interesting in that it did a great job in giving some insights into the personal and family life of this great investor.

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38 — Liar’s Poker by Michael Lewis

Liar’s Poker was one of the first books I read that was a first hand account of what goes on inside an Investment Bank.  In the late 1980’s Michael Lewis was employed by Solomon Brothers in the bond trading department.  The bond traders were expected to make money any way they could and Michael suggests that […]

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37 — Jesse Livermore: World’s Greatest Stock Trader by Richard Smitten

We reviewed Reminiscences of a Stock Operator earlier in our recommended books list, which offers an overview of Jesse Livermore’s success as a trader – the story of the Boy Plunger. This biography is excellent further reading on Livermore, as it goes into great detail about his life (both personal and as a trader), as […]

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36 — The Question Behind The Question by John G. Miller

In this best selling book by John G Miller, the importance of staying away from fads and sticking to practising key fundamentals, such as personal accountability, is discussed. Another important theme that is discussed is the importance of team work and removing silos and the ‘us and them’ mentality. By working as a team and […]

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35 — The World Is Flat by Thomas Friedman

In his book Friedman documents the IT revolution and the globalisation of the world during the 21st Century. The world is continually changing and moving forward which means Individuals, Companies and Governments continually need to change the way they do things just to stay ahead. His message is quite straight forward, be prepared because changes waits […]

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34 — Elliott Wave Principle: Key To Market Behaviour

Robert Prechter Jr. is widely regarded as the modern day king of Elliot Wave theory, and this books contains his thorough explanation of it. We think this book is a must-read for anyone considering using technical analysis as an investment tool. Elliot Wave theory is a subjective forecasting method for stock chart patterns. The book is easy to read and written […]

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33 — The Warren Buffett Way by Robert Hagstrom

Buffet doesn’t require any introductions. In this book, Hargstrom gives us an insight into Warren Buffet’s career as well as some of the people he worked with while developing his investment strategy. The book points out examples of successful investments by Buffet, which have contributed to his outstanding returns. Hagstrom not only covers how Buffet […]

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32 — Reframing by Richard Bandler

Even though this book doesn’t focus on specific stock picking techniques or financial theory, its introduction to the concept of ‘reframing’ can be highly beneficial for anyone interested in participating in the market. The techniques discussed are universal and they could be applied to a broad range of situations – including investing. Reframing refers to […]

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31 — Master CEOs: Insights From Australia’s Leading CEOs by Matthew Kidman & Alex Feher

Master CEOs is a series of interviews with CEOs of Australian listed companies. The CEOs were chosen based on excellent long term shareholder returns of the companies that they were in charge of. Australian investors often end up reading books that are US focused, and it is refreshing to read a book with an Australian […]

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30 — Outliers: The Story Of Success by Malcolm Gladwell

In Malcolm Gladwell’s Number 1 best seller, Outliers: The Story of Success, Gladwell examines the factors that contribute to high levels of success. Whilst many factors, including birth date, can play a part in success, it is the 10,000 hours theory that is perhaps the key to achieving success either personally or within business. By […]

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29 — When Genius Failed by Roger Lowenstein

In this book, Roger Lowenstein gives the reader a peek behind the curtain in the spectacular collapse of LTCM (a large U.S. hedge fund). The absolute return fund achieved a post-fee 20%+ annualised return for 3 consecutive years. In its fourth year, however, the fund came crashing down. The book explains the intricacies behind the […]

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28 — The Next Great Bubble Boom by Harry S. Dent Jr.

Harry Dent made a name for himself in his earlier years predicting major market moves such as the Japanese slow down and the Tech wreck . We first read this book of his in 2005, and at the time found it a very interesting and insightful read. In this book he explains amongst other things how […]

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27 — The Rise And Rise Of Kerry Packer by Paul Barry

Whilst we haven’t recommended too many biographies on our recommended books list, this one most certainly deserves its place. As far as reputations go, there aren’t many Australian businessmen on the same league as the late Kerry Packer. As far as biographies go, Paul Barry does an excellent job at delivering a balanced, detailed and […]

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26 — Confessions Of A Street Addict by James J. Cramer

An entertaining read by one of Wall Street’s most successful hedge fund investors and recognisable media commentators. Cramer takes us through the life of a hedge fund manager and strategies he used to consistently beat the market over more than a decade. The reader uncovers some of the inner workings of Wall Street including the […]

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25 — The Wolf Of Wall Street by Jordan Belfort

The Wolf of Wall Street is an autobiography by Jordan Belfort. As investors it is important to understand the range of people that we may come across from time to time, and the way they do business.  Jordan Belfort is at one extreme of the spectrum – constantly crossing ethical and moral boundaries (and the […]

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24 — The Education Of A Speculator by Victor Niederhoffer

This is an interesting read primarily because Victor Niederhoffer, the author, blazes his own trail. The tone is awkward at times – overly modest occasionally, pompous frequently – but this is a man who has made many millions, lost many millions, and then made it all back and more. He has traded in many markets […]

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23 — Hot Commodities by Jim Rogers

Roughly 20 to 25 percent of the Australian Stock Market by market Capitalisation is made up of resource or resource related stocks. As Ed Seykoya said  “Commodity trading is the purest form of trading in the world and resources companies are simply a leveraged version of this.” If you are looking to invest in resource or […]

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22 — Masters Of The Market by Geoff Wilson, Anthony Hughes and Matthew Kidman (2nd edition)

Master of the Market is a series of interviews with top performing Australian fund managers. We first read this book not long after it was published in 2005. Having read the first edition a few years earlier, we were surprised that a number of the “masters” had underperformed in the 3 years between editions. The […]

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21 — Valuation: Measuring And Managing The Value Of Companies by McKinsey & Company Inc.

Perhaps the most academic title we have reviewed so far in our 52 Books To Read series, McKinsey’s Valuation is a must-have resource to learn about fundamental analysis. The book has been updated regularly since it was first published, with expanded material being added to cover more contemporary themes (like the Internet bubble). As a […]

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20 — Thinking, Fast And Slow by Daniel Kahneman

Whilst a heavy going book, written by the winner of a Nobel Prize, this is invaluable reading for potential investors in the stock market. Readers will get an interesting take on how we all make decisions and the dangers associated with the way we make decisions. This book is particularly interesting in relation to impulsive […]

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19 — The Tipping Point by Malcolm Gladwell

This is a fascinating book about exceptional people, surprising changes that are all around us, and just how poorly we understand ourselves and society. You should definitely read this book if at all interested in marketing or public awareness, and in understanding how ideas and behaviour can spread. The lessons for investing are less obvious. […]

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18 — The Alchemy Of Finance by George Soros

George Soros is often cited as one of the most successful investors in history. At its core, The Alchemy of Finance is based around Soros’ Theory of Reflexivity. Soros believes that human understanding is incomplete and incoherent and, as such, prices aren’t objective. Instead, prices are based on people’s biased perceptions of the fundamentals underlying […]

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17 — Winning On Wall Street by Martin Zweig

Zweig begins his book by sharing some of his life stories with the reader – about investing, and some examples of ‘life lessons’ along the way – giving us an insight into how he learned his craft. Zweig points out that Edwin Lefevre’s Reminiscences of a Stock Operator inspired him – a book that we […]

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16 — The Art Of Speculation by Phillip L Carret

I would title this book “A Review of the Markets” – it is a useful read about the different investment instruments available, with Carret’s valuable opinion on the risks and opportunities they can offer, and some insights into the stock markets during the 1920s. There was little depth, though, on how Carret became one of […]

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15 — Flow: The Psychology Of Optimal Experience by Mihaly Csikszentmihalyi

As an investor and as a father, I like the idea that happiness is a skill – the theme of this book. The author explains the enjoyment we feel from “flow experiences”, those activities that require all of our skill and focus. It is a reminder that the effort put into something often brings its […]

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14 — Common Stocks And Uncommon Profits by Philip A. Fisher

In terms of finance and investing Philip Fisher’s reputation precedes him. This book was originally published in the late 50’s but remains a must-read for every investor – it’s worth noting the book has been brought up to date since it was first published. You could say the author is biased towards growth investing. However, […]

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13 — The Age Of Fallibility by George Soros

George Soros doesn’t need an introduction. This book offers a unique insight into how someone like Soros sees the world and, perhaps more interestingly, how he wants the world to be. The high-level concepts conveyed are very valuable for anyone interested in capital markets and how they impact the world. Soros breaks down his way of […]

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12 — Hedgehogging by Barton Biggs

Barton Biggs is credited with predicting the .com bubble. In this book, he offers a glimpse at what happens behind closed doors in a funds management business – in particular hedge funds. Biggs is, without a doubt, a talented and engaging writer. Whilst not a ‘How to invest in X’ type of read, the author […]

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11 — Technical Analysis Of The Finanical Markets by John J. Murphy

This book, although over 500 pages long should be compulsory reading for anyone interested in trading or investing money professionally or for themselves personally. It was first published in 1986 and is considered by many in the market to be the “Bible” of technical analysis. The book covers many different trading techniques and technical indicators […]

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10 — Beyond Greed And Fear: Understanding Behavioral Finance And The Psychology Of Investing by Hersh Shefrin

People who study finance at university learn about the efficient market hypothesis, which concludes that all stocks are correctly priced, and therefore investors cannot consistently outperform the market. This hypothesis is based on the assumption that all investors are rational, and that rational investors take all publicly available information and correctly use that information to […]

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9 — Taming The Lion: 100 Secret Strategies For Investing by Richard Farleigh

Starting out his investment career as a chess playing economist, Richard Farleigh initially believed that investment and trading seemed to be just gambling. Overtime he came to believe that market prices are in fact predictable and developed a repeatable investment methodology to make money investing and trading in the markets. In this book Richard Fairleigh […]

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8 — One Up On Wall Street by Peter Lynch

Peter Lynch ran the Magellan mutual fund for 13 years in the late 70s and through the 80s. The fund’s performance during this time was astounding, earning him a stellar reputation in the industry. Lynch encourages the reader to seek out ‘ten baggers’ and offers insights into ways the average investors has, or can have, […]

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7 — Trade Your Way To Financial Freedom by Van K. Tharp

Van K. Tharp is a consultant who specializes in coaching traders and investors (this author also has a few Finance best-sellers under his belt). The author covers several seemingly simple trading concepts and ideas. The depth of these concepts is made clear as you read through the chapters. Looking beyond the self-promotion, which the author […]

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6 — How I Made $2,000,000 In The Stock Market by Nicolas Darvas

Nicolas Darvas fled Hungary at the age of 23 with nothing but a few pounds to his name. He would go on to turn an investment of $10,000 into $2,000,000. It only took him 18 months. Not the story you’d expect from a professional ballroom dancer. Years later, aged 39, Darvas wrote this book. It […]

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5 — The New Market Wizards: Conversations With America’s Top Traders by Jack D. Schwager

Following up on the Market Wizards Book review is a review on the New Market Wizards book by Jack Schwager. Of particular interest for our funds are the interviews in Part IV of the book covering Stanley Druckenmiller, Richard Driehaus, Gil Blake and Victor Sperandeo. Interestingly when I first read these interviews I dismissed Part […]

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4 — How To Make Money In Stocks by William O’Neil

This book is about finding “multibaggers” – the stocks that double in price and then keep climbing higher. Having studied the best-performing US stocks throughout history, William O’Neil distills the attributes they share and prescribes a system to identify and trade the future winners. It is a no nonsense guide to making money, a reference […]

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3 — Market Wizards: Interviews With Top Traders by Jack D. Schwager

From Amazon: How do the world’s most successful traders amass tens, hundreds of millions of dollars a year? Are they masters of an occult knowledge, lucky winners in a random market lottery, natural-born virtuosi—Mozarts of the markets? In search of an answer, bestselling author Jack D. Schwager interviewed dozens of top traders across most financial […]

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2 — Fooled By Randomness: The Hidden Role Of Chance In Life And In the Markets by Nassim Nicholas Taleb

Human beings are exceptional at pattern recognition and, for the most part, this skill serves us well. Taleb does a brilliant job of explaining the other side of that coin: Mistaking correlation for causation, overestimating causation, a belief that everything can actually be explained and the apparent inability to get our heads around ‘randomness’. Taleb […]

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1 — Reminiscences Of A Stock Operator by Edwin Lefevre

This book is almost compulsory reading for anyone who wants to invest in the market. The ‘boy plungers’ views on ‘hope, fear and greed’ make interesting reading. This book is good the first time but makes more and more sense on the second and third reading. We will more than likely revisit this book a […]

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