RECOMMENDED BOOKS

A reader of the blog, Bhogal suggested that I include a list of books to read. It was a wonderful suggestion. Many a times we leap into the deep end of the swimming pool called share market  through the tips tom tommed on TV channels, magazines and the pink papers. A better way would be to equip ourselves with the tools, I mean learn swimming before we jump into the ‘share market’ pool.  

The analyst reports are like “pop economics” or instant noodles. They are mostly predicated on future earnings and growth. But the future is the realm of the non living. For the Bhagvad Gita too says, “The only truth or prediction which is certain after we are born  is that  we shall all die, yet we all chase material gains and at times sin to aquire those gains which we shall leave behind.”

Benjamin Graham, (I shall be quoting him often) who was the Guru of Warren Buffet at Columbia University has written that the investor should look at past earnings and growth of the business which he/she intends to buy. And on those valuations if he finds the current value of  complete business cheap and an adequate “margin of safety”, he must go ahead and buy a portion(s) of that business — a share.

Hence, an investor needs to learn the ropes and if it is beyond her or his comprehension then seek advice of a trustworthy expert and not a quick-fix -nouveau- employed- relationship- manager who is herself clueless  and bases her advice on the commission she  is going to earn by making you switch and buy sub optimal products.

Coming to the recommended reading, the books I am going to suggest deal not only with understanding the business but also with investor psychology which drives our decision making. We have a number of biases at play which get involved in our decisions and thus some of my recommendations pertain to “behavioural finance”. A new field in finance but most important as it leads to the philosophy of value investment.

The following is the list:-

• Analysis and Use of Financial Statements by Gerald White
• The Intelligent Investor by Benjamin Graham
• Security Analysis by Benjamin Graham
• The Little Book of Common Sense Investing by John Bogle (and not Bhogal 🙂 )
• The Little Book of Value Investing by Christopher Browne
• The Little Book that Beats the Markets by Joel Greenblatt
• Value Investing & Behavioural Finance by Parag Parikh
• Common Stocks Uncommon Profits by Philip Fisher
• Manias Panics & Crashes by Charles Kinderberger
• Against All Gods: The Story of Risk by Peter Bernstein
• The Black Swan by Nassim Taleib
• Buffett by Roger Lowenstein
• Fooled by Randomness by Nassim Taleib
• The Great Crash by J K Galbriath
• Influence by Caldiani
• Freakonomics
• Thinking Fast and Slow by Kahneman                             www.flipkart.com