Leading Financial Pros Swear These Top Notch Investing Books Will Make You A Better Investor
A search for investing books on Amazon (AMZN) brings up more than 12,000 results. To help you focus on the best for your summer reading list, we asked leading financial services providers to share their favorite investing books. They swear these top notch books will make you a better investor.
1. How to Buy Stocks by Louis C. Engel
In 1987, I was 26 years old and about to begin my first job as a stockbroker for Wheat First Securities. I was excited at the opportunity but anxious about what it all entailed. Then I was given How to Buy Stocks by Louis C. Engel and I felt ready to take on the tasks that lay ahead.
First published in 1953, with its eighth edition released in 1994, How to Buy Stocks is the preeminent introductory primer for stockbrokers. It takes the reader through the formation of a company, how that company then issues stock, and ultimately, why that stock has value.
A lot of new investors view investing as playing the stock market. They are looking for systems. They want formulas, that when followed, will guarantee profits. As a seasoned investor, you know that’s never what investing is about. Investing in How to Buy Stocks is about discovering value and understanding why you own what you own, and how you participate financially in the ownership of a publicly owned company.
This book was great for me because it connected the entire process that begins with entrepreneurship, to the forming and growing of a company, and ultimately to the ownership of stock. For example, you can buy and sell shares of AT&T today. You can kind of understand what the telecom giant does, but how they do it, and perhaps more important, why they do it, is lost on a lot of investors. How to Buy Stocks shows you how a company comes up with an idea, raises capital, borrows money, and grows. It also shows how investors can grow with the company with appreciating stock over time.
This is a great introduction for the novice, and an excellent reminder for old hands and even pros in the investment business because it tells the reader the hows and whys of investing. There’s great value in revisiting the basics for those already established in the industry, and I wouldn’t think the average person would know or understand why a company is on the stock exchange and why they would want to own shares of something someone else does.
This is not detailed book on investment analysis. For that, look to Security Analysis by Benjamin Graham and David Dodd. To remind yourself on why to buy stocks, read How to Buy Stocks.