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Woozle’s Top 6 Books Every Investor Should Read

Here's a list of Woozle's top six classic & alternative investing books that can provide indispensable business and finance insights for investors

 

1. The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success
By William Thorndike

 

In an Nutshell... What makes a successful CEO. Quite simply, it is the returns for the shareholders of that company over the long term.

 

Summary... evaluating the performance of companies and their leaders. The book runs through eight individualistic CEOs whose firms’ average returns outperformed the S&P 500 by a factor of twenty—in other words, an investment of $10,000 with each of these CEOs, on average, would have been worth over $1.5 million twenty-five years later. Humble, unassuming, and often frugal, these "outsiders” shunned Wall Street and the press, and shied away from the hottest new management trends. Instead, they shared specific traits that put them and the companies they led on winning trajectories: a laser-sharp focus on per share value as opposed to earnings or sales growth; an exceptional talent for allocating capital and human resources; and the belief that cash flow, not reported earnings, determines a company’s long-term value.

 

Quote... "It is impossible to produce superior performance unless you do something different.” — John Templeton

 

2. The Sleuth Investor: Uncover the Best Stocks Before They Make Their Move
By Avner Mandelman

 

In an Nutshell... To make real money in the stock market you have to act like a sleuth. 

 

Summary... It's not enough to rely on SEC files, annual reports, and press releases. To uncover the most lucrative investments, you must dig beneath the printed surface of public information and sleuth for physical evidence. This is the only way to reveal the actual truth about a company's real value-and its future.

 

Titbit... required reading at Woozle HQ!

 

3. Extraordinary Popular Delusions and the Madness of Crowds
By Charles Mackay

 

In an Nutshell... The best book ever written about market psychology. 

 

Summary... an early study of crowd psychology by Scottish journalist Charles Mackay, first published in 1841. Mackay’s central theme in the book is that the tendency of humans to develop a herd mentality leads to individuals in the herd to act and react to various stimuli. The reactions are very similar and predictable and this “madness” leads to a downward spiral with undesirable effects. His book highlights several stories from history of various manias that took place including Tulip-mania, The South Sea bubble and the Mississippi scheme. There are lessons to be learned from them in the present day.

 

Quote... "The most contrarian thing of all is not to oppose the crowd but to think for yourself" — Peter Thiel

 

4. The Wisdom of Crowds: Why The Many are Smarter than the Few
By James Surowiecki

 

In an Nutshell... Large groups of people are smarter than an elite few. 

 

Summary... published in 2004, is a book written by James Surowiecki about the aggregation of information in groups, resulting in decisions that, he argues, are often better than could have been made by any single member of the group. The book presents numerous case studies and anecdotes to illustrate its argument, and touches on several fields, primarily economics and psychology. Its central thesis, that a diverse collection of independently deciding individuals is likely to make certain types of decisions and predictions better than individuals or even experts.

 

Tidbit... Another book that's required reading at Woozle HQ!

 

5. Common Stocks and Uncommon Profits
By Phil Fisher

 

In an Nutshell... Widely respected and admired, Philip Fisher is among the most influential investors of all time

 

Summary... An evergreen classic and was originally published in 1958. Phil Fisher was a very successful investment legend of his time. He had a great influence on Warren Buffet, the billionaire investor and one of the richest person on this planet. Buffett himself has stated he is “85% Graham and 15% Fisher". He pioneered the Scuttlebutt approach as an investment methodology. Scuttlebutts are those common stocks which have gone through a detailed analysis like the study of its promoters, suppliers, customers, stakeholders, employees, competitors etc to find out about company’s future prospect. The book attempts to show what to buy, when to buy and when to sell for those who are desiring to get uncommon returns on their investments.

 

Quote... "I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits...A thorough understanding of the business, obtained by using Phil's techniques...enables one to make intelligent investment commitments." - Warren Buffett

 

6. The Intelligent Investor
By Benjamin Graham

 

In an Nutshell... an essential investment book by Benjamin Graham widely known as the father of value investing.

 

Summary... The greatest investment advisor of the twentieth century, Benjamin Graham taught and inspired people worldwide. Graham's philosophy of “value investing”—which shields investors from substantial error and teaches them to develop long-term strategies—has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

 

Titbit... At 19, Buffett accidentally bought The Intelligent Investor by investor Benjamin Graham, who would later become Buffet’s hero and mentor. Buffett re-read Graham’s book about half a dozen times, he says, inspiring Buffett’s investment philosophy and strategy to this very day.

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