Reading List for Traders
Besides the reams of content I read online each day there are several books that I recommend every investor read. There are some that are directly related to trading, and others that help understand the human psyche, and therefore have indirect applications. Let me know which books you’d recommend!
Trading & Investing
The Man Who Solved the Market — A fascinating read about the scientists that invented quant trading. Their company owns the best performing fund of all time — the Medallion Fund has achieved an average return of nearly 70% per year since 1988, and without a single year in loss (before fees). The founders have gone from backroom scientists to some of the most powerful people on Earth.
One Up On Wall Street — My #1 book for those looking to make money using their everyday knowledge. The author (Peter Lynch) is regarded as one of the greatest investors of all time. His method: you see successful companies around you every day, use those as your starting point and do some very basic homework. A very accessible book describing a very accessible approach to successful investing.
The Naked Trader: How anyone can make money trading shares — Good for those new to trading and contains some good lessons. More experienced traders can skip this one.
The Intelligent Investor — Written by the father of “Value Investing”, and mentor to Warren Buffett this book is dense with info on how to evaluate potential investments. The world has changed since this book was written, so not everything is relevant but I still consider this one of the best investing books in the world.
Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications — Another dense tome, this one should be used more as a reference book. You will learn many of the key techniques used by most traders. I love technical analysis, but will often give higher priority to a company’s fundamentals when picking my stocks. Nonetheless, you should know something about TA if you’re a trader.
The Snowball: Warren Buffett and the Business of Life — This is a monster of a book, and in my opinion contains a lot of fluff but it is incredibly inspiring too. Skim it for the good parts. Key message: be patient.
Psychology
Never Split the Difference: Negotiating as if your life depended on it — you’re not going to be negotiating your buy/sell prices on assets, but this book has some excellent content on how to understand how and what others are thinking. And understanding what the rest of the world is thinking is key to understanding the markets.
The Tipping Point — Information/gossip flow and sentiment are powerful components in human economics. This book is more anecdotal than scientific but it gives some insight into how trends begin and eventually take off.
Thinking, Fast and Slow — Many investments and trading mistakes are made because we allow our emotions to take over. Reading this book was a great exercise in self-reflection and helped me identify several bad habits and ways to overcome them.
