Dividend and value investing book reviews
Mike - six-figure dividend earner
"Looking for dividend and value investing books? Then look no further! Below are links to the books which I put a great deal of my success down to.
Knowledge and experience in investing is key, so why not gain both by picking up a copy of one of these? Although I'm a raving fan of these books, I've tried to make the reviews as impartial as I could - not easy when these books have helped me amass a small fortune in 15 years!
Read and grow wise... I recommend them all highly!"
My Top Dividend and Value Investing book reviews:
- The Intelligent Investor - Benjamin Graham
The Intelligent Investor is an absolute must read for the serious investor. It was first published back in 1949 and was revised and updated by Graham four times with the latest being initially published in 1973. It provides the cornerstone to value investing and we believe it is perhaps the best value investing book ever written ... Read more.
- Common Stocks and Uncommon Profits - Philip Fisher
Much of Ben Graham's writings focus on the "quantitative" aspects of investing (i.e. looking at the numbers on an income statement or balance sheet) whereas Phil Fisher focuses more on the "qualitative" factors in an investment decision. In an ideal world, investors should focus on both of these aspects ... Read more.
- The Most Important Thing - Howard Marks
This is a value investing book that will help you in thinking about the three most important elements of investing: price, value, and risk. After all, your goal as an investor is to maximize your risk-adjusted returns and these three are the key metrics to use to make your investment decisions ... Read more.
- Stocks for the Long Run - Jeremy Siegel
This is the book for you if you need a little convincing that stocks are the best asset class over a long period of time. It's a terrific read, full of statistics backing up the fact that there is no better place to park your cash than the stock market as long as you are prepared to stomach big price volatility and you have a long investment horizon ... Read more.
- One Up on Wall Street - Peter Lynch
Peter Lynch had a fantastic track record when he ran the Magellan fund at Fidelity between 1977 and 1990. His returns averaged over 29% during that period. This book outlines his thinking and advises investors to stick to what they know. Lynch stresses that the average person will come across many ideas in their day to day lives and we can use them to gain an edge over professional fund managers. Think about the underlying company and build a profitable portfolio with this guide.
- Security Analysis - Ben Graham & David Dodd
This is a terrific book for the more serious investor. The book was first published in 1934 during the great depression and the book shows the reader how to value and include a margin of safety in your purchase price. The book goes through many examples with particular emphasis on securities that are trading cheaply compared to their assets.
- The Essays of Warren Buffett: Lessons for Corporate America - Warren Buffett
The Berkshire Hathaway website (www.berkshirehathaway.com) has all of Warren Buffett's letters to shareholders back to 1977 and it is well worth reading them all. If you can't, though, then this book is an excellent alternative. The book takes the main lessons from Buffett's letters through the years and organizes them into similar themed chapters. The book is a very easy read (Buffett makes the difficult sound simple) and the lessons are invaluable.
- Poor Charlie's Almanack by Charlie Munger - Charlie Munger
Charlie Munger's hero was Benjamin Franklin and this book is based on Franklin's book "Poor Richard's Almanack." Munger has embarked on a lifetime of learning across a broad range of subjects and he tries to pass on some of his wisdom through a series of essays, speeches, and writings in this book. It is a fascinating read and you'll learn a lot about how Munger uses his knowledge to build mental models and gain a psychological edge. His wisdom is enlightening.
- The Little Book That Still Beats The Market - Joel Greenblatt
This book is an expansion of Greenblatt's orginal book written in 2005 that gives investors a formula to help you outperform the market by buying quality businesses at bargain prices. Greenblatt uses data and research to back up his formula and he explains why it is so hard for most market participants to be successful. The book is easy to read and he makes his points easily understandible and clear.
- Margin of Safety - Seth Klarman
Ben Graham writes a chapter on the margin of safety but Klarman writes a whole book on it. This book is very expensive to purchase as there are only a limited number of copies (last time I looked copies were selling for $1,400 on Amazon). If you do decided to stump up the cash and make the investment then you'll find an investing masterpiece. Klarman shows the investor what they must watch out for, how they should determine risk and their investment goals, how they should value an investment and where they can look for underpriced securities.
- Motivated Money - Peter Thornhill
If you're a small-scale personal investor with high aspirations, the wisdom available in this book is hard to beat. Peter Thornhill's approach is simple, yet powerful, and he's talking from a position of experience having worked in the UK and Australian markets as a professional. What he learned there persuaded him that the strategies they used were incorrect. As a result he developed his own approach which match brilliantly with the time input and ambition available to the part-time investor. Although it's written from a Australian investor's perspective, the advice travels well and we recommend you to read it! Click here to order direct from Peter Thornhill's website.
- Top Stocks - Martin Roth
This book comes out every year and features a list of companies listed in Australia (usually around 100) that meet certain criteria set by Martin Roth. The criteria for inclusion are: it must be a member of the All Ordinaries Index, it must have been listed for at least 5 years with profits and dividends in each year, it must have reported at least 10% return on equity in the last year, and it must not have a debt to equity ratio greater than 70%. The book gives a brief description of every company and their prospective outlook. The book then has some useful tables at the end which breaks down some of the most useful ratios. This book is an excellent starting point if you want to look at the Australian market. I purchase this every year.
- The Little Book of Common Sense Investing - John Bogle
John (aka Jack) Bogle revolutionized investing by encouraging time-poor investors to simply buy a selection of the best companies in America and do this as cheaply as possible. How do you do this? By buying a low cost index fund and Bogle created Vanguard group to give investors easy access to these index funds. This book says that most investors who try to outperform the market are wasting their time and that you should instead focus on keeping costs down and compounding over long periods of time. If index funds are the way you want to invest then make sure you read this book. Click here for our February 2019 newsletter which features Jack Bogle and the lessons to be learned from this investing guru.
- Rich Dad Poor Dad - Robert Kiyosaki & Sharon Lechter
One of the most popular personal finance books ever written. It encourages you to become financially independent by focusing on building assets which produce cashflow for you. Importantly, it shows you why your own home is not an asset but a liability as it will cost you cash every month. Property can be an asset, though, if you rent it our and receive income from it. The book compares the different lessons Kiyosaki received from his financially literate "rich Dad" and his financially illiterate "poor Dad" and shows you how to increase your own financial intelligence.
- You Can Be a Stock Market Genius - Joel Greenblatt
Joel Greenblatt built a fabulous track record at Gotham Capital which was an investment partnership he founded and subsequently produced returns of over 50% per year for more than a decade. Greenblatt advises you to look for special situations such as mergers, spin-offs, bankruptcies and arbitrage as these can result in material mis-pricings which you can take advantage of. To get all his ideas then you must have a read of this!
- The Millionaire Next Door - Thomas J Stanley
This book profiles many "ordinary" millionaires in America and shows how you might be surprised by who is the typical millionaire in the US. He shows that most millionaires actually live in middle-class and blue collar neighborhoods whereas the more expected wealthy white collar workers are often just high spenders who are out to "keep up with the Joneses". The book introduces under, average, and prodigious accumulator of wealth (termed UAW, AAW, PAW) by giving a formula to work out what your wealth should be at your age and using your income. The book highlights how you should be a big saver and not worry about status symbols.
- The Automatic Millionaire - David Bach
Put your monthly income and outgoings on auto-pilot with this easy-to-follow book. It details how, by making automatic monthly payments between your accounts, you can budget the easy way, pay off your mortgage quicker and have more money invested. Having lived by the ideas of this book for the last 12 years, I can promise you they work!
- The Richest Man in Babylon - George Samuel Clason
This book was written in the 1920s and uses biblical style parables to help the reader on the subject of thrift, financial planning and personal wealth. The books shows that you can make money, keep your money and get your money to earn more money. Each chapter lays out some rules for the reader to follow in order to consistently build wealth.
- Beating the Street - Peter Lynch
Another excellent investing book by Peter Lynch where he gives readers many investing lessons from his experiences. These lessons include how the average investor can improve their performance to better the professionals, giving a step by step guide to picking indiviual stocks, and how you can create your own mutual fund strategy.
- Value Investing: From Graham to Buffett and Beyond
The book shows the investor the principles of value investing and profiles some of the leading value investors of all time. The book guides you on how to identify risk, how to value securities, how to dig deeper into the balance sheet and the quality of the company (identifying competitive advantages etc). Another must read for a serious investor.
- Competition Demystified - Bruce Greenwald & Judd Kahn
This book is all about businesses operating with competitive advantages. It tells you what you need to look out for if your trying to find a business with a "moat" that protects it from competitors. It goes through a number of case studies and how these competitive advantages can be eroded. The book is very useful for those trying to understand how companies can retain consistently high returns on capital employed.
- The Stock Market: 50 years of Capitalism at Work - John Littlewood
This book gives a brilliant history of the UK stock market from 1945 to 1998 and covers all the large politial and economic changes to happen during that time. The book is highly detailed and a fascinating read. It covers the post war years and nationalisations that happened, it gives a detailed account of devaluations and the severe bear market (-73%) of 1972-75. We then come a full circle with the de-regulations and privatisations of the 1980s and 1990s. It is one of the most informative books I've ever read.
- The Snowball: Warren Buffett and the Business of Life - Alice Schroeder
Any serious investor needs to study Warren Buffett and this is the most comprehensive biography on Warren Buffett out there. There is obviously a lot of personal information about Buffett in this book but there are some brilliant business stories as well. They cover his education, his early years running his partners' money, buying Berkshire Hathaway, and some of his key moments after that. The book is also very personal as well in discussing his relationships with his parents, wives, children, friends, and business partners. It is a large book but a fascinating read.
- The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success - William Thorndike
Many CEOs sound and act in very similar ways. They effectively empire build. This book focuses on a few select, outstanding CEOs who not only show fantastic operational skills but, just as importantly, exhibit incredible capital management skills. The book profiles eight different CEOs, the situations they encountered, and how they drove superior returns. An excellent book both for investors and business leaders.
- Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2013 - Carol Loomis
Carol Loomis has been friends and writing about Warren Buffett since 1966. This book brings together a series of articles published by Forbes between 1966 and 2012. They cover insights into Buffett's thinking on management, philanthropy, public policy, and investment strategy. Carol Loomis had a front row seat throughout Buffett's career and this feels like a real-time commentary on some of his main events. It is a highly informative, enjoyable, and readable book.
- Invest Like a Guru - Charlie Tian
Charlie Tian provides a full checklist in this book to help you look for excellent businesses that are able to drive long term high rates of return. All of this while paying reasonable prices. It analyzes the methods of several legendary investors. He focuses on the typical quality metrics and potential traps such as thinking you are buying a cheap stock when it is really a horrible business. Pay attention to the lessons from this book and it should aid your investing.
- Warren Buffett's Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor - Jeremy Miller
There is an awful lot written about Warren Buffett and Berkshire Hathaway but relatively little written about his early years when he was running investment partnerships in the 1950s and 1960s. This book brings a collection of his early letters together between 1956 and 1969. It makes a fascinating read because, at that time, Buffett was heavily involved in "cigar butts" which are poorer businesses that are extremely cheap. Later Charlie Munger would help change his style to look for higher quality businesses but his style of investing in the 1950s and 60s is still very applicable to those of us investing smaller sums (which is most of us!) today.
- Damn Right! Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger - Janet Lowe
Berkshire Hathaway would be a very different beast without Charlie Munger. Munger's influence on Berkshire simply can't be understated. This book is a fascinating biography of the life of Charlie Munger. At the age of 31, Munger was divorced and mourning a dead son but, from this almighty low, he recovered to live one of the most fulfilling and rewarding lives that can be lived. He goes through life using incredible rationality that has been built up through a lifetime of learning. There are lessons for all of us in this book whether it is investing, work, family life, or philanthropy and giving.
- Sam Walton: Made In America - Sam Walton
Sam Walton is one of the top businessmen of the 20th Century. He was the man that drove Walmart from a startup into a retail giant. This book is a fascinating account of that journey. It chronicles how his obsession of serving customers, how he treated employees and customers, some of the many problems he encountered, and how he became feared by the competition. Sam Walton was quite simply a retail legend.
- The Everything Store: Jeff Bezos and the Age of Amazon - Brad Stone
If Sam Walton was a retail legend of the 20th Century, then for the 21st Century you can't look any further than Jeff Bezos. Amazon has quite simply revolutionized the retail environment over the last 20 years. Like Walton, Bezos shows an incredible obsession for pleasing his customers and this is undoubtedly behind his success. He foresaw how the internet was going to bring so much convenience to consumers and he has dedicated himself to making life better for consumers all over the world. This has resulted in Bezos becoming the wealthiest man in the world in 2018. This is the book to tell the Amazon story.
Mike - six-figure dividend earner
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