Top 10 Books to Read about How to Invest in the Stock Markets
“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”– Warren Buffett
Trying out new things has become a primary choice for everyone during this extended lockdown. Some wise individuals took a break from social media and started exploring the expansive world of stock market investing.
The idea of investing in stocks has always been fascinating and potentially profitable. Indeed as every other avenue, it too requires a skill set. The basic requirements for investing can be surmised as:
Knowledge can be gained from books.
We have curated the must read books for stock market enthusiasts.
- Stocks to Riches – Parag Parikh
The dynamics of the market are hard to assess even for veterans of the arena. Parag Parikh pens down the basics of investing. The chapters cover his experiences of the stock market which are full of gem for analysts, beginners, and seasoned investors.
Parag Parikh, a stalwart of the stock market, is known for his research-driven and behavioral finance investment skills. His mutual fund (PPFAS Mutual Fund) has been giving consistent and high returns.
- Value Investing And Behavioral Finance – Parag Parikh
The book talks about the persisting capital trends in India from the past 30 years and the intricacies related to it.
The science of chanelling the right emotion at the right moment can surely take you places. An investor must have the aptitude to sense the right time for investing or taking a step back without being influenced by the crowd’s behavior. Parag Parikh details ways to avoid crowd following and what the right attitude is for a stock market investor.
- How to Avoid Loss and Earn Consistently in the Stock Market – Prasenjit Paul
The book explains the nuances of investment and the rapport of timing associated with it. While briefly discussing how to spot opportunities and then seizing them.
Chapters such as ‘When to buy and when to sell’ or ‘How to construct your portfolio?’ explain the plan to minimizing loss and maximizing profit. Towards the end Mr. Prasenjit Paul wraps the book by stating “Life is not all about the stock market and money”.
Starting at a very young age (18 years) Mr. Paul has taken the indian share markets by storm. His venture ‘Paul Asset’ is a consulting firm helping people finding their way around the financial markets
- Investing in India – Rahul Sarogi
The role of a country’s culture and history forms an important aspect in the course of investing. ‘Investing in India’ is a guide to the investment culture and history for investors who want to learn and capitalize on the opportunity presented by a booming Indian Stock Market and economy.
The book does not limit itself to industry knowledge but expands into the political and governance arena, capital market, and the financial system.
Rahul Sarogi: The CEO of Atyant Capital Advisors and market veteran of over 18 years. Rahul’s views are shaped by a combination of east and west ideology, Rahul is a graduate from the prestigious University of Pennsylvania and practices Vipasnaa to keep his calm when the market is under duress.
- One Up On Wall Street – Peter Lynch
Sailing on Mr. Buffet’s idea, ‘One Up On Wall Street’ is all about making investments and then sticking to it. Peter Lynch introduces the concept of the ‘ten-bagger’ which is investing in stocks that have the caliber to give ten fold returns.
He also insists on ignoring the experts’ and analysts’ suggestions on the market and carrying out research in individual capacities. The idea behind this thought process is that veterans recommend the industries which they know best and it might not be the ideal case or scenario for an individual. Discussing the topics of investment the book goes on to raise some important questions – Does the investor owns a house, a stable income, and is in a financially satiated position to invest?
Peter Lynch: Known for his terrific stint at Fidelity Investments where in 13 years he generated a revenue of $14 billion from $18 million, Mr. Lynch is a veteran of investing. He managed to beat the market from 1977 to 1990, giving returns of 29.2% annually.
- The Intelligent Investor- Benjamin Graham
Warren Buffet credits author as his mentor. Bejnamin Graham was a giant of stock markets.
It was this very book that inspired Buffet to take over the voyage of the stock market. Most of the books in the arena talk about the investment and the market in a complex fashion, but Mr. Graham took down the complexities with his practical and layman analogies.
His methods revolve around the idea of buying low-risk stocks with a potential of high return. Mr. Graham also emphasized the importance of a margin of safety, which is the practice of investing in a stock whose price is below the actual valuation of the firm’s business. This way the profit travels upside and the market recalibrates the stock to fair value
Benjamin Graham: Widely popular as the father of value investing, Mr. Benjamin is the mentor of Warren Buffet himself. Starting off with his venture – Graham Newman Partnership he went on to make valuable contributions to the field of economics and created a new basis for the global and U.S. currency.
- Beating the Street- Peter Lynch
One of the most intriguing aspects of the stock market books is that all of them discuss the success ratio but none of them explicitly pen down the causes that can lead to a fundamental loss in the market. ‘Beating the Street’ is all about the author’s experience of the market and the tricks he used in choosing stocks for his mutual fund company. The strategies used are of grass root level and can be practically utilized by any of the beginners.
One of the best things about the book is it’s language which is connecting, informative, and easy. He expansively discusses the idea of investing in what one knows and staying away from an alien business, or to put up in his words – Invest in something which you can explain to a 10-year-old.
- The Warren Buffett Way – Robert G. Hagstrom
Investing in stocks when they are of significantly less value is the key trick of the market. But how does one spots the right time for it? Tracking the growth of the business which you have expertise in can help in seizing the opportunity.
‘The Warren Buffett Way’ is a layman’s guide into the market. It starts with the basic traits and then ventures into the effects of a country’s economy on the market. From introducing basic principals of investing to encouraging its readers to move ahead with brave but informed choices; the book does it all.
Robert G. Hagstrom: Mr. Hagstrom is the Managing Director and Chief Investment Strategist for Legg Mason Investment Counsel. His books have earned wide recognition in the spectrum of Investment Market. Apart from The Warren Buffett Way, The Last Liberal Art went on to become a bestseller.
- Thinking, Fast and Slow – Daniel Kahneman
- Bulls, Bears and Other Beasts – Santosh Nair
The book Bulls, Bears, and Other Beasts talks about the ins and outs of Dalal Street post-liberalization. It’s an expansive account of the Indian stock market in the last 25 years encapsulating the tricks and trades of the market and the policies of the government in relevance with it.
Insurmountable riches from the market usually come with controversy, allegations, and sometimes even court cases. Read about the mysteries surrounding the boom, scams, money laundering allegations, and all things that caused a stir in the stock markets.
A must-read for all those who want to unravel the spice of the trade and learn better ways of understanding impact of domestic monetary policies.
‘Thinking, Fast and Slow’ is a distinct choice among its contemporaries. The book is not distinctly related to the the stock market but to the art of making a decision and that of contemplation. It talks about what influences a persons decision and how the process of slow thinking can result in accomplishing bigger goals in life.
Daniel Kahneman: is known for his meticulous work in behavioral economics and decision making, Mr. Kahneman was awarded the 2002 Nobel Memorial Prize in Economic Sciences. The Economist mentioned him as one of the most critical economists of modern times.
Those are some of the top books to read about the stock markets.
If you would like to read easy to understand starter guides and build up to advanced concepts start with the links below
All information here is for educational/research purposes only, we do not recommend trading.