I wanted to share a link to a talk by William Green at Google that I hope readers of this thread will enjoy watching. The speaker is author of a book “Lessons from the great minds of investing”, which I couldn’t find on Amazon.
In this talk he covers 4 key traits that make a great investor, these were gleaned from his many years of interviewing some of the masters of investing such as Howard Marks, Templeton, Mohnish Pabrai, Peter Lynch etc. The lessons are the The Willingness to be lonely, The Power of humility, The ability to take pain, The key to happiness.
I found this a fascinating talk and particularly regarding point three on having a mindset that can weather the ups and downs of the market.
Hope you enjoy watching and pls share your thoughts and recommendations on other books/videos that this talk may remind you of
Security Analysis and Business Analysis on Wall street is good book for entire process. Another one is Financial statement analysis by Fridson. The basic tenets of investing are same every where. So should not matter even if you read US centric books. From next year we may have IFRS based accounting standard in India. That will make everything mostly similar.
For Indian perspective read Basant Maheshwari and Saurabh Mukherji books. Basant’s book available only on his web site. It is good book and covers a lot of ground.
Thinking Fast and Slow - remains my best read book in CY15 and in top 3 all time.
The book is basically collection of small experiments and not very heavy to read, it’s rather very enjoyable. The book is must read for everyone - Investors, Sales and Marketing Person, Decision Makers, everyone. I read chapters of this book randomly every 6 months .
Its a pretty long thread so havent read all recommendations. I would like to add " Warren Buffets letters to Shareholders " Its what I started with and still havent finished coz its too long . You can really understand his decisions and thought process over many of his investments and over some of his failed invesments too. And it has some humour too in between
There is nothing better than learning from the Best Investor world has ever seen.
In this revised, updated, and expanded edition of his New York Times bestseller, Nobel Prize-winning economist Robert Shiller, who warned of both the tech and housing bubbles, cautions that signs of irrational exuberance among investors have only increased since the 2008-9 financial crisis. With high stock and bond prices and the rising cost of housing, the post-subprime boom may well turn out to be another illustration of Shiller’s influential argument that psychologically driven volatility is an inherent characteristic of all asset markets. In other words, Irrational Exuberance is as relevant as ever. Previous editions covered the stock and housing markets–and famously predicted their crashes. This edition expands its coverage to include the bond market, so that the book now addresses all of the major investment markets
I am surprised to note that the learned members of value pickr have missed a very good book…The most important thing by Howard Marks.
The second most important book is the Wisdom of the crowds…which makes a very important point that except at the turning points, market is mostly right.
What is it that makes most value investors to believe that they are correct and the crowd is wrong…is it our misinformed arrogance.
The most important thing in investing ( as Buffett points out) is to know our limitations.
In my view, investing has four components…1) theory of value investing / growth investing. 2) economics and analysis of financial statements 3) behavioural finance and 4) technical analysis.
To be very successful, either we should be a master of any one ( or two)of the above or be a jack of all the above four.
Since most of us will never become thr ultimate masters of the above sub disciplines…to be successful in investing we should striive to use knowledge from all the four disciplines.
I fund the omission of books on Technical Analysis very surprising.
I was very much impressed with Parag Parekhs book…Value investing and Behavioural Finance…it opened up the world of cyclical investing for me.
Also very good are chapters on Cyclicals in books by Peter Lynch…who made the important point that to be early in cyclicals is to lose your wealth in a very short span of time.
And then there are the relevant chapters in the Book by Howard Marks who instilled in me the confidence to invest in cyclicals at the very bottom of the cycle when every thing appears to be very bleak for the sector.The most important point he made is …a cycle is a cycle is a cycle …there is no such thing as the cycle is dead …or THis time its different…
In so far as investing in cyclicals is concerned, we have only these three books to go with. The whole of investment book world seems to have ignored the important sector of investing in cyclicals.
Investing in cyclicals requires either we remain deeply connected with the particular cyclical industry or we use Technical analysis to time our purchase at the very bottom of the cycle.
Another very good book is the book on Sector Rotation in the Market by Martin Pring…so far only Prashat jain of HDFC Mutual Fund seems to be applying this concept in Indian market. Recently, he has even given a series of lectures justifying why he is moving into capital goods sector.
Cyclical sectors make up almost 80% of the market…banking, financials, metals, steel, automobiles, paper, chemicals, infrastructure, capital goods, shipping, cement,sugar, textiles, rubber, OIL…almost all the market consists of cyclicals.
Without knowledge of cyclical investing, investors are confined to just a very few stocks. So those serious about investing cannot ignore cyclical investing and the books by Howard Marks, PArag Parikh, and peter Lynch…they cannot also ignore Technical Analysis because in cyclical investing (both at the bottom and at the top) timing of investment is most crucial.
When it comes to non cyclical sectors the book on sector rotation is very important. Non cyclical sectors such as consumer staples, pharma etc perform well only under certain market conditions and not always. For this book on sector rotation is essential.
Everyone interested in learning to thinking more clearly on Valuation (especially early-stage growing businesses), is encouraged to a RE-READ of this must-have Valuation Tome.
Don’t dismiss it as a DCF book, like I did the first-time. Mr D had gently nudged me (don’t read it in a hurry) read it at a leisurely pace - important to first understand the essential way Future Value is created, every year incrementally. That this can be measured objectively, each year. That if you truly attempt to understand the business, you will have to have a certain view/visibility on the value being added in the immediate future. Then you will also need to get your fingers around the Intangibles!! Start thinking like the Owner of the entire business; put yourself in the shoes of the Owner, how will he Value this business?? How will a 100% buyer of an emerging growing business VALUE the business???
A new book by Saurabh Mukherjee will be released in a few days "The Unusual Billionaires "
Companies profiled include
Asian Paints, Axis Bank, Astral poly, HDFC bank, Berger Paints, Marico and Page Industries. I guess this would be an awesome read.
I read a lot of investment books and at the same time, try to read books from different fields to give me some insights on investing.
I just finished reading couple of really good books which are definitely worth mention and thought I will share with the group.
They are called “Sapiens” and “Homo Deus”. Both written by Yuval Harari, a professor of history. As the title suggests, one covers our past, of 70,000 years and the second one covers our ‘future’ - next 100 to 1000 years. You can check Yuval’s talk on TED and if you like it, suggest you buy the books.
Gives you a great perspective to take a step back and think about how we as humans have reached where we are likely to be.
Valuation : Measiring and managing the value of Companies by Tom Copeland et el is good book. How to do valuation is only one part in the book. Much of the book actually addresses other critical matters like elements of value, how to manage for value, how to create/unlock value etc. If I compare with Damodaran then that book gives comprehensive view of all valuation techniques and matters related to valuation work. To get comprehensive view of valuation methodologies themselves you got to read that book.
This book ventures into so many other areas e.g. value creation using M&A, various kinds of divestitures like spin offs, carve outs etc. In that sense this books presents slightly different perspective Vis a Vis Damodaran. And I think that perspective will enrich any long term fundamental investor.
Another good book on valuation is “Financial Statement Analysis and Security Valuation” By Stephen Penman. Not an easy read but gem of a book. He covers a lot of ground in his book. This is good book for people already well versed with financial statement analysis and accounting issues.
This book by Janet Lowe is compilation of Ben Graham’s selected writings. These lectures and articles were long forgotten. The author has found those and put into one book. Although these are very old by today’s standard if you are a value investor you will get a lot out of it. The book also contains his testimony to US congress. That contains few nuggets for new investors because people asking the questions were not finance kind.
His other articles written for various journals are equally educational even after all these years. They have certain enduring quality to them.
But the biggest value of this book in my opinion is that it offers his lectures during 1946-47 to New York Institute of Finance. Graham used to teach Security analysis course in the evening. Many like Walter Schloss had taken this course after WW II. The transcripts of many of those lectures and Q&A with students are included in the book. The careful reading of these lectures will reward the investors greatly. You feel like sitting in his class and Graham is teaching you. Those classroom lectures alone are worth many times the price of the book.
There have been many good books on human rationality and irrationality, but this one is masterpiece. That masterpiece is Daniel Kahneman’s Thinking, Fast and Slow. Kahneman, a winner of the Nobel Prize for economics, distils a lifetime of research into an encyclopedic coverage of both the surprising miracles and the equally surprising mistakes of our conscious and unconscious thinking.
This gives insights into various decision making process and thoughts that go into it. It is one of my favourite.
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