“Books … are like lobster shells, we surround ourselves with ’em, then we grow out of ’em and leave ’em behind, as evidence of our earlier stages of development.” – Dorothy L. Sayers (The Unpleasantness at the Bellona Club, 1928)
As a regular ETR reader, you know that MMF is a great believer in studying and understanding any investment you make — before you put your money at risk. You also know that he’s an advocate of reading good books written by people who have learned their lessons by personal experience.
He’s not alone. Dr. Steve Sjuggerud, ETR’s resident investment expert, believes it is possible to become a better investor by reading the right books written by the right people.
Here, then, is a list of six books Steve considers to be ESSENTIAL reading for all market watchers and investors, along with some of his comments about each one.
1. “Eat the Rich,” by P.J. O’Rourke
This book by the conservative humorist is a fun-to-read version of exactly how economic freedom creates wealth. Beginners and experts alike can learn from this gem … and be entertained at the same time.
2. “Reminiscences of a Stock Operator,” by Edwin Lefevre
You will undoubtedly become a more profitable trader by reading this book. The highly entertaining tale of Jesse Livermore, one of the most successful traders in history, is told in first person — in a swashbuckling style. You’re having so much fun reading this book that you don’t even realize you’re learning many of the infallible trading secrets that 99% of traders never learn. If you read only one book about trading, read this one.
3. “Economics in One Lesson,” by Henry Hazlitt
Want to know how the world REALLY works? This book — a reprint of a book first published in 1946 — explains how, using easy-to-understand examples. Starting with a simple story about a broken window, Hazlitt explains the One Lesson of Economics that you need to know. After reading this Austrian-influenced book, you’ll quickly be able to punch holes in most government schemes. With a price of only $10, you can buy copies for your local political leaders too.
4. “Winning on Wall Street,” by Martin Zweig
Who do the world’s most successful traders and money managers look to for advice? Wall Street’s most famous number-cruncher, Martin Zweig. It’s amazing that such a great mind could boil his life’s work down into terms that stock-market beginners can understand. This book — the newest edition of a classic — is perfect for beginners and experts alike. You’ll know what to buy, when to buy, and when to sell. What more could you ask for?
5. “Market Wizards: Interviews With Top Traders,” by Jack Schwager
A great way to learn how to be successful in trading is to learn from the best. This book has in-depth interviews with 17 of the world’s top traders. These folks all turned small sums into many millions of dollars in their careers. Buy it.
6. “Trader Vic II: Principles of Professional Speculation,” by Victor Sperandeo
This book ties it all together. Written by a trader whose documented 12-year track record was over 70% a year (without a losing year in that period), it is a bit denser than the rest. In four sections (Economic Fundamentals, Technical Analysis, Options Trading, and Trading Psychology), Vic clearly explains, from a free-market perspective, how he’s made a pile of money … and how you can too.
Will reading these books GUARANTEE you will make money in the market? No way. But Steve Sjuggerud and MMF agree that being a voracious reader of the best information out there is one of the few ways you can get a leg up on the competition.
The cost of all six recommended books (less than $100) could easily be the best money you ever spend.