Editor’s note: This article was first published in June 2018, and its references to the latest edition of Irrational Exuberance and Manias, Panics and Crashes are as of 2018; newer editions may exist.
However much time goes by, some books about finance and investing will never go out of fashion, even though many of them have been updated in new editions. Let’s say that much of what is said in the stock market books written today has already been said in the books listed below. These titles always come up in the recommendations of great investors. In fact, some of them were written by great investors.
This long list includes titles we have recommended many times before. Since it is summer and we will have a bit more time for reading, here are the most important finance and stock market books written to date.
See also: These are the best financial education books
The best stock market investing books of all time
1. The Intelligent Investor, by Benjamin Graham, considered the best stock market book of all time
Once again I put it in first place because I still consider it the bible of investing. It was written by Warren Buffett’s “mentor” and will teach you value investing, helping you avoid many of the mistakes investors make. It is a must-read for anyone who wants to invest in the stock market.
In fact, it is the best book on stock market investing written to date (in my opinion).
2. Extraordinary Popular Delusions and the Madness of Crowds, by Charles Mackay
Considered a classic of crowd psychology, this book basically tells us that human stupidity knows no limits. Investing, history and psychology come together in this book through three historical episodes (three swindles or bubbles): the Mississippi Scheme, the South Sea Bubble and Tulip Mania.
It happened in the past, it is happening now and it will happen again. The crowds took the bait and fell for it, they keep falling for it and they will fall for it again, whether you warn them or not. Why? That is what the book is about.
It is one of the best stock market and finance books.
3. Irrational Exuberance, by Robert Shiller
Nobel Prize winner Robert Shiller warned about both the tech bubble and the housing bubble. In the latest updated edition, he warns that he still sees “irrational exuberance” on the rise after the 2008 crisis.
This stock market book deals with the psychological factors that lead investors to make outright blunders, as well as the forces that make stock prices very cheap. Shiller gives a series of tips so that we, as investors, do not fall into the next bubble, because there is always another one.
4. Common Stocks and Uncommon Profits, by Philip A. Fisher
Although Philip Fisher may sometimes be overshadowed by Benjamin Graham, he is considered one of the most influential investors of all time, and his theories and advice have been applied by the “Wall Street guys” for more than 40 years.
Warren Buffett himself said that his investment approach was a mix of Benjamin Graham and Philip Fisher. For that reason and others, it is another stock market book that should be required reading for anyone thinking of investing or wanting to understand the world of financial markets.
5. One Up on Wall Street, by Peter Lynch
Peter Lynch, considered today an investing legend and the best money manager the United States has ever had, not only tells us that we can earn returns similar to those of Wall Street professionals, but argues that you can even beat the professionals and get ahead of them.
Lynch believes investment opportunities are everywhere (the supermarket, work…) and that if you keep your eyes open, you can spot a great company before Wall Street does. One of the most interesting stock market books, and one that can give you another perspective on investing.
6. Reminiscences of a Stock Operator, by Edwin Lefèvre
Written in 1923 as a fictionalised biography, this timeless story is about Jesse Livermore, considered the greatest speculator of all time. In his quest for the perfect investment method, Livermore got rich and went broke several times.
It talks about stock market manipulation and, of course, we will see how to get rich and go broke with a high-risk investment method. Unfortunately, Livermore’s end was not very glamorous. A book about the world of the stock market that you will find very entertaining.
7. The Little Book of Behavioral Investing: How Not to Be Your Own Worst Enemy, by James Montier
Biases, emotions and overconfidence are just a few of the many traits that can lead investors to lose money or earn lower returns on their investments.
In this book, written in plain language, Montier teaches you to identify and eliminate many of these behaviours, so you can get better returns from your portfolio.
One of the most recommended finance books in recent years.
See also: The best book for learning to invest, according to expert investors
Other recommended finance and stock market books
8. Manias, Panics and Crashes: A History of Financial Crises, by Charles P. Kindleberger
The Financial Times named this book the best finance book in history. It reviews the most important bubbles in history, from Tulip Mania to the dot-com crash, explaining in detail the causes and consequences of financial crises.
The latest edition has been revised and updated to include an analysis of the first global crisis of the 21st century, including the case of Lehman Brothers.
Without a doubt an excellent book for understanding how and why economic crises arise, so that we are better prepared to recognise them in the future.
9. The Essays of Warren Buffett, by Lawrence A. Cunningham: a book that will teach you to invest intelligently
Warren Buffett’s philosophy of business, investing and life is full of gems, and it is something Buffett has been setting down in writing over the years. What the author does here is arrange those writings so they lead us to the central point of Buffett’s philosophy: “the difference between price and value”.
More than 700 pages written by Warren Buffett are condensed into a little under 300 pages in this interesting and valuable finance book, which takes you inside the mind of the man considered the best investor of our century.
10. A Random Walk Down Wall Street, by Burton G. Malkiel
This is one of the stock market books most often recommended at some business schools for anyone who wants to get into the stock market. The book tries to break the belief that an individual investor cannot get better results than the Wall Street experts. To do so, Burton Malkiel explains the strategy we should follow to invest successfully, and also gives an overview of crises.
11. Thinking, Fast and Slow, by Daniel Kahneman
It is not a book about investing, the stock market or finance, but it explains why we make bad decisions in investing, in business and in life in general. Without a doubt, it is one of the books I have enjoyed most and that has surprised me most in recent years.
Written by the psychologist and winner of the Nobel Prize in Economics Daniel Kahneman, the book explains our two systems of thinking: System 1, which is fast, intuitive and emotional, and System 2, which is slow, deliberate and more logical. In short, we get to know practically all the cognitive biases we face in any area, including investing. In my opinion, everyone should read this book, whether or not you plan to invest.
12. Security Analysis, by Benjamin Graham and David Dodd
First published in 1934, Security Analysis is one of the most influential finance books of all time, together with The Intelligent Investor by the same author. Once again, this is timeless advice that will keep us from making the irrational decisions investors make every day.
Let’s say that, together with The Intelligent Investor, it is a book that every professional investor has read.
13. Liar’s Poker, by Michael Lewis
The 1980s. Michael Lewis finishes his studies at Princeton University and starts working at Salomon Brothers, one of the most important investment firms on Wall Street. Lewis learns the trade and witnesses how Wall Street salesmen become millionaires thanks to their killer instinct, their coolness and their ambition.
Whether you were an ambitious youngster or an unscrupulous veteran, on Wall Street there was no limit to the money you could make. This book is different from others on the subject, because its author does not mince his words when telling what they did and how they did it.
