GETTING STARTED:
One Up on Wall Street by Peter Lynch – short, easy to read, and probably the quickest way to get going on stock picking for those without investing experience.
Money Masters of Our Time by John Train – looks at a variety of successful money managers and their approaches to investing. This book can help you determine what your own approach is, which you'll probably talk about frequently during interviews.
Common Stocks and Uncommon Profits by Philip Fisher – learn about the scuttlebutt advantage, which you can use to develop novel insights on undercovered stocks. This is a key way to differentiate yourself during recruiting. Fisher influenced many other successful investors, so there is a lot to learn from this book, which is worth rereading.
Berkshire Hathaway Annual Reports by Warren Buffett – 30+ years worth of reading from someone who made some $40 billion (and more for his shareholders) Don't forget the Berkshire Hathaway owner's manual. Plus, the price is right. (For a more streamlined but expensive version of Buffett's writings, see The Essays of Warren Buffett: Lessons For Corporate America by Larry Cunningham.)
The Intelligent Investor by Benjamin Graham – This is the short version of Graham's approach, which greatly influenced the field of securities analysis. A bit dated in some ways, but still contains some timeless investing principals that help develop a healthy investing temperament. If this leaves you looking for more from Graham, read Security Analysis (see below).
WORTH YOUR TIME:
On Competition by Michael Porter – many investors maintain that Porter’s Five Forces are the key to industry analysis and in turn stock picking. Looking at stocks through this lens is a great way to identify competitive advantage and its sustainability.
You Can Be a Stock Market Genius by Joel Greenblatt – probably the best intro to special situation investing (spin-offs, restructurings, etc.), which can make for good stock pitches.
Expectations Investing by Alfred Rappaport and Michael J. Mauboussin – a new book that approaches investing by looking at what a stock’s current price implies about the market’s expectations for growth, risk, etc. Most experienced investors do this subconsciously, so it is helpful to understand the approach explicitly.
The Psychology of Investing by John Nofsinger – a short but thorough primer on behavioral finance applied to investing. You’ll see most of this in Managerial Decision Making (38002), which you probably won’t take until 2nd year.
Good to Great by Jim Collins – a well-researched look at what the most successful companies have in common. Highly recommended by top investors. Also see Built to Last by Collins.
When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein – interesting story about the biggest hedge fund blowup to date; well-written by a former Wall Street Journal reporter who also wrote arguably the best Buffett biography to date.
Beating the Street by Peter Lynch – a good follow-up to One Up on Wall Street.
The Man Who Beats the S&P: Investing with Bill Miller by Janet Lowe – Miller has beaten the S&P for 13 years running, and he describes his approach in some detail to Lowe. (Search for Lowe on Amazon for a full list of her investor and business biographies.)
John Neff on Investing by John Neff – if you want to run a diversified fund someday, this book is worth reading. Neff has a value investor’s mentality, but he also invested growing stocks when they were out of favor. He also describes how he made money in cyclicals.
Investment Biker: Around the World with Jim Rogers by Jim Rogers – this is a good book to read if you’re interested in investing internationally.
The New Market Wizards: Conversations with America’s Top Traders by Jack Schwager – a good overview for would-be traders. Also see Market Wizards and Stock Market Wizards.
The Art of Speculation by Philip Carret – Buffett said that “Philip Carret has the best truly long-term investment record of anyone I know.”
Contrarian Investment Strategies: The Next Generation by David Dremen.
Pioneering Portfolio Management by David Swensen – Yale’s endowment manager (16%+ over 14 years) talks investing.
MORE BOOKS, BY CATEGORY:
VALUE INVESTING
Security Analysis by Graham and Dodd – somewhat dense and complex, but this was the original textbook on investing, and is worth a read if you have the time. Essential for sophisticated deep value investors.
Value Investing: A Balanced Approach by Marty Whitman – manager of Third Avenue Value Fund, which has outperformed the market by a lot for a long time. Stresses financial strength; probably the best primer on "balance sheet investing." For more detail, see:
The Aggressive Conservative Investor by Marty Whitman and Martin Shubik.
Value Investing: From Graham to Buffett and Beyond by Bruce Greenwald – delivers the value investing overview that the title promises.
Value Investing Today by Charles Brandes – directly influenced by Graham shortly before his death in the 70s, Brandes went on to build an eponymous $100 billion-plus international value shop, which recruits on campus. Available as an e-book and in the CRC.
Margin of Safety: Risk Averse Value Investing Strategies by Seth Klarman
INVESTOR PSYCHOLOGY & BEHAVIORAL FINANCE
Groupthink by Irving Janis – "The best book ever written on the complexities and pitfalls of group decision making," according to Morgan Stanley's Barton Biggs.
Beyond Greed and Fear by Hersh Shefrin
Why Smart People Make Big Money Mistakes by Gary Belsky and Thomas Gilovich
The Crowd by Gustave Lebon – Arguably a bit outdated and perhaps not the most straightforward reading, but a very interesting look at how different behaviors transpire in crowd settings.
The Psychology and Judgment of Decision Making by Scott Plous
How We Know What Isn't So by Thomas Gilovich
The Inefficient Stock Market by Robert Haugen
The New Finance: Overreaction, Complexity, and Uniqueness by Robert Haugen
Decision Traps: 10 Barriers to Brilliant Decision Making by Edward Russo
Fooled by Randomness by Nassim Taleb
Hare Brain, Tortoise Mind by Guy Claxton
Investment Psychology Explained: Classic strategies to Beat the Market by Martin Pring
RISK, BUBBLES, AND CRASHES
Against the Gods: The Remarkable Story of Risk by Peter Bernstein – a historical perspective on estimating risk in a broad economic sense.
Manias, Panics, and Crashes: A History of Financial Crises by Charles Kindleberger – an excellent look at the history, psychology, and economics of asset bubbles.
WALL STREET NARATIVES AND HISTORY
Liar’s Poker by Michael Lewis
The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders by Connie Bruck
Barbarians at the Gate: The Fall of RJR Nabisco by Bryan Burrough and John Helyar
The Money Game by Adam Smith – not the Scottish, father-of-economics Adam Smith, but a pseudonym for journalist George Goodman. A very entertaining and educational account of the Street during the exuberant 60s. Indirectly analyzes investor psychology.
Go-Go Years: Drama and Crashing Finale of Wall Street's Bullish 60s by John Brooks
The Great Game: The Emergence of Wall Street as a World Power 1653 – 2000 by John Gordon
The Great Crash, 1929 by John Kenneth Gilbraith
ASSET CLASSES, ALLOCATION, AND MACRO INVESTING
Stocks for the Long Run by Jeremy Siegel – provides historical context on stock returns and risk premiums over the past century. For Siegel’s latest, see:
The Future for Investors by Jeremy Siegel – which argues that the wave of baby-boomer retirements may systematically and fundamentally affect equity returns over our lifetime.
Tomorrow's Gold by Marc Faber – A look at which asset classes might outperform in the future; based on a very rich and interesting analysis of the performance of assets classes over very long periods of time (thousands of years).
The Alchemy of Finance by George Soros – a good start on Soros; essential for people with a macro focus. Also see: Soros on Soros: Staying Ahead of the Curve by George Soros.
ACADEMIC
Irrational Exuberance by Robert Shiller – called the market peak in 2000; convincingly argues for the periodic irrationality of the markets.
A Random Walk Down Wall Street by Burton Malkiel – the classic look at the argument for rational markets (which you may be asked to refute in interviews). Also contains some useful investment wisdom.
ACCOUNTING
The Interpretation of Financial Statements by Benjamin Graham – advanced financial statement analysis from an investor’s perspective.
Financial Shenanigans: How to Detect Accounting Gimmicks by Howard Schilit – a good complement to 30116 (Accounting and Financial Analysis I); will help you spot poor earnings quality. Questions along these lines are common in interviews ("Name three ways that managers can distort earnings.").
Financial Statement Analysis: Theory, Application, and Interpretation by Leopold Bernstein
Quality of Earnings: The Investor’s Guide to How Much Money a Company is Really Making by Bill O'Neil
MUTUAL AND HEDGE FUNDS
Common Sense on Mutual Funds by John Bogel – Vanguard’s creator talks about the future of the business
Fidelity's World: The Secret Life and Public Power of the Mutual Fund Giant by Diana Henriques
The Mutual Fund Business by Robert Pozen – former chairman of Fidelity and current chairman at MFS
All About Hedge Funds: The Easy Way to Get Started by Robert Jaeger – a good overview of the different hedge fund strategies
How to Create and Manage a Hedge Fund by McCrary, Stuart
ECONOMICS
Capitalism and Freedom by Milton Friedman
The Wealth of Nations by Adam Smith
The Long Wave in Economic Life by J.J. Van Duijn
Monetary History of the United States, 1867 – 1990 by Milton Friedman
Capital Ideas by Peter Bernstein
BIOGRAPHIES
No Bull: My Life In and Out of Markets by Michael Steinhardt – autobiography that contains some helpful tips on a more short-term, trading-oriented investing style.
So Far So Good: The First 94 Years by Roy Neuberger – autobiography of a successful investor who started his career in 1929 and has seen it all.
Reminiscences of a Stock Operator by Edwin Lefevre – written in the 1920s, this book reads like a novel, and describes the ups and downs of a trader in the early part of the 20th century.
The House of Morgan by Ron Chernow – comprehensive biography of JP Morgan, with an analysis of his broader effects on financial markets.
Maestro: Greenspan's Fed and the American Boom by Bob Woodward
Baruch: My Own Story by Bernard Baruch
Julian Robertson: A Tiger in the Land of Bulls and Bears by Strachman, Daniel
Chainsaw: The Notorious Career of Al Dunlap by John Byrne
BUFFETT AND BERKSHIRE
Buffett: Life of a Capitalist by Roger Lowenstein – contains both biographical detail and a description of Buffett’s investment approach.
Of Permanent Value by Andrew Kilpatrick – everything you every wanted to know about Berkshire; not to be read in one sitting.
The Warren Buffett Way by Robert Hagstrom – analyzes some of Buffett’s more successful investments.
Warren Buffett Speaks by Janet Lowe.
Buffetology by Mary Buffett – a decent Buffett starter, but not that sophisticated.
The Science of Hitting by Ted Williams – Buffett recommends this book to teach investors how to wait for the right pitch in a game where there are no called strikes.
Sandman's Place – a website devoted to Buffett and Berkshire. www.sandman.com
CHARLIE MUNGER
Poor Charlie's Almanack edited by Peter D. Kaufman – a tome on Charlie Munger, who Buffett credits as integral to his investment success. Contains countless gems on investing and "worldly wisdom" from one of the most interesting and iconoclastic investors around.
Damn Right by Janet Lowe – more on Munger; this one reads more like a traditional biography.
Seeking Wisdom: From Darwin to Munger by Peter Bevelin. If Munger’s mental models appeal to you, this is where to learn more. This is an extremely interesting book if your interests extend beyond business and investing.
SECTOR-SPECIFIC:
ENERGY
The Prize by Daniel Yergin – this is the Pulitzer Prize-winning Bible on oil. Although it is not geared towards investing, it provides all of the historical, political, and economic background that you could ask for.
Resource Wars by Michael Klare – predictions on the political and economic consequences of oil depletion over the next 50-100 years.
COMMODITIES
Hot Commodities by Jim Rogers – advice on investing in commodities globally from a commodities bull.
BANKING AND FINANCE
A History of Interest Rates by Sidney Homer
The Origins of Value: The Financial Innovations that Created Modern Capital Marketsby William Goetzmann
Dead Bank Walking: One Gutsy Bank’s Struggle for Survival and the Merge that Changed Banking Forever by Robert Smith – this is one of those "what-not-to-do" books.
Modern Banking by Shelagh Heffernan
Economics of Money, Banking, and Financial Markets by Frederic Mishkin
Tom Brown's bankstocks.com – a website run by a hedge fund. Tom Brown won II's Best of the Sell Side for Regional Banks for several years. www.bankstocks.com
BIOTECH
The Biotech Investor's Bible by George Wolff
The Billion Dollar Molecule by Barry Werth – the fascinating story of a biotech startup, Vertex Pharmaceuticals.
From Alchemy to IPO by Cynthia Robbins-Roth
The Coming Biotech Age by Richard Oliver.
TECHNOLOGY
The Innovator's Dilemma by Clayton Christenson
The Gorilla Game: Picking Winners in High Technology by Geoffrey Moore
RELATED TOPICS:
Moneyball by Michael Lewis
Alexander Hamilton by Ron Chernow – Hamilton more or less single-handedly created the US financial system, along with a variety of other important accomplishments. A fascinating biography.
Gold and Iron by Fritz Stern
The Moral Animal: Why We Are the Way We Are by Robert Wright
The Lexus and the Olive Tree by Thomas Friedman
The Complete Sherlock Holmes by Sir Arthur Conan Doyle
Atlas Shrugged by Ayn Rand
Nonzero: The Logic of Human Destiny by Robert Wright
A Brief History of Nearly Everything by Bill Bryson
MUNGER'S RECOMMENDATIONS (in Poor Charlie's Almanack):
Deep Simplicity: Bringing Order to Chaos and Complexity by John Gribbin
F.I.A.S.C.O.: The Inside Story of a Wall Street Trader by Frank Partnoy
Ice Age by John and Mary Gribbin
How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World & Everything in It by Arthur Herman
Models of My Life by Herbert Simon
A Matter of Degrees: What Temperature Reveals About the Past and Future of Our Species, Planet, and Universe by Gino Segre
Andrew Carnegie by Joseph Frazier Wall
Guns, Germs and Steel: The Fates of Human Societies by Jared Diamond [Also see Diamond's recent follow-up, Collapse]
The Third Chimpanzee: The Evolution and Future of the Human Animal by Jared Diamond
Influence: The Psychology of Persuasion by Robert Cialdini
The Autobiography of Benjamin Franklin by Benjamin Franklin
Living Within Limits: Ecology, Economics, and Population Taboos by Garrett Hardin
The Selfish Gene by Richard Dawkins
Titan: The Life of John D. Rockefeller by Ron Chernow
The Wealth and Poverty of Nations by David Landes
The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategyby Robert Hagstrom
Genome: The Autobiography of a Species in 23 Chapters by Matt Ridley
Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher, William Ury, and Bruce Patton
Three Scientists and Their Gods: Looking for Meaning in an Age of Information by Robert Wright
Only the Paranoid Survive by Andy Grove
MISCELLANEOUS:
The Detective and the Investor: Uncovering Investment Techniques from the Legendary Sleuths by Robert Hagstrom
The Art of Short Selling by Kathryn Staley
The Tao Jones Averages by Bennett Goodspeed
The Tao of Pooh by Benjamin Hoff
The Te of Piglet by Benjamin Hoff
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