We're big on education at The Intelligent Investor. Every member is encouraged to review our recommended reading lists (there are three of them) because they're an education in themselves.
In recent columns I've discussed the first two books on the introductory list; Buffett: The making of an American Capitalist by Roger Lowenstein and One up on Wall Street by Peter Lynch.
If you're interested in becoming a better investor, I'd like to commend several other titles. Let's get a bit parochial and turn to Aussie author Trevor Sykes first.
Sykes was a veteran columnist at The Australian Financial Review and creator of the insightful and entertaining character Pierpont, director of Blue Sky Mines (No Liability Except At Gunpoint). He has the honour of having three books on our first reading list.
The Numbers Game is hard to come by but if you can land a copy it'll reward you with a good introduction to some analytical basics and a number of Australian case studies. The Bold Riders and Two Centuries of Panic (both much easier to obtain) deliver good background information and colourful histories of important chapters in Australian business history.
The curious case of Benjamin Graham
The list also contains three Benjamin Graham-related entries. The Intelligent Investor, which he wrote in 1949, followed the publication of his seminal textbook Security Analysis (also on the list) in 1934. Written with the intelligent layman in mind, it steers clear of the clichés and trite content that fill so many modern 'investment' books.
The Intelligent Investor contains a number of very instructive comparisons and case studies, as well as what Warren Buffett has called the two most important chapters ever written about investing (8 and 20, if you're keen to skip to the juicy bits).
The Rediscovered Benjamin Graham by Janet Lowe isn't one for rank beginners but contains many articles written by Graham and also a series of lectures he gave to the New York Institute of Finance. Graham is a truly inspirational character. Apart from his many investing and academic triumphs, he translated Spanish poetry as a hobby and once penned a Broadway play.
Lowy's rags-to-riches story
Even if you don't have Westfield in your personal portfolio you probably have some indirect exposure through your super fund. Frank Lowy: Pushing the Limits by Jill Margo is a biography which catalogues the legendary rags-to-riches journey of Westfield founder Frank Lowy. As a part-owner of Westfield, I sleep better at night having read this book.
Common Stocks and Uncommon Profits by Phil Fisher is regarded by some of our analysts as being most influential to their own investment approach. The books showcases Fisher's very successful 'rifle shot' approach, which involves meticulously researching a few unusually promising companies and then concentrating your portfolio heavily in those stocks.
Even though it's not officially on the list, I can't help but recommend my company's own contribution to the Australian investing canon, Value: The Intelligent Investor's guide to finding hidden gems on the sharemarket by James Carlisle.
It takes you on a fascinating journey from the ancient Yir Yoront people of the Cape York peninsula (to explain the concept of 'value') through to a detailed 35-page case study analysing blue chip fund manager Platinum Asset Management. It's densely packed with information, including a great primer on understanding company accounts, but remarkably easy to read.
Warren Buffett has said that he doesn't know any highly intelligent people who aren't voracious readers. It's unlikely you'll develop a great long-term track record without also investing in your own knowledge bank. These recommendations set you up to make a healthy deposit.
This article contains general investment advice only (under AFSL 282288).
Greg Hoffman is research director of The Intelligent Investor which provides independent advice to sharemarket investors.
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