Stuck at home during the circuit breaker? Why don’t we go on a trip together with Jim Rogers, the co-founder of the Quantum Fund, as he takes us through his 22-month bike ride across 52 countries as he discovers investment opportunities in foreign lands. That’s the power of a book. It transports you to a different place momentarily, allowing our minds to wander and explore new ideas.
There’s no faster way to gain a good understanding on a topic we desire to learn than grabbing ideas through books. As Charlie Munger said, ‘In my whole life, I have known no wise people who didn’t read all the time – none, zero.’ We can draw upon the knowledge that we have accumulated to help us make informed decisions, and that’s essentially what investing is all about!
IG, the world’s largest CFD provider, curated a selection of their top 10 trading and investment books. These are selected by IG’s financial experts – dealers, market strategists, and client managers at the firm. Through bite-sized videos, they share with us the insights they have gleaned from these tomes. There are also podcast interviews with authors like Roger Lowenstein, talking about the rise and fall of Long-Term Capital Management. I highly encourage you to check out IG’s website to get a preview of the books you like to read before getting them. In no particular order…
Here are the top 10 investment and trading books recommended by experts and analysts:
1. One Up On Wall Street by Peter Lynch
Recommended by IG Dealer, Andreas Vassiliou
One Up On Wall Street was written by Peter Lynch, one of the most successful mutual fund managers that ran the Magellan Fund at Fidelity between 1977 and 1990, averaging an impressive 29.2% return annually.
He offers advice in layman terms on how retail investors can spot investment opportunities from the products and services they encounter in a daily basis. When discovered early, these stocks have the potential to become ‘ten-baggers’, appreciating tenfold after the initial investment. A few of these in your portfolio and you are on your way to becoming a star mutual fund manager.
What Andreas Vassiliou, IG Dealer, has to say about this book:
‘An honest account from one of the most successful fund managers in the world. It is written simply and highlights small changes to everyday thinking which could aid better stock selection.’
2. Reminiscences of a Stock Operator by Edwin Lefèvre
Recommended by IG Dealer, Ludwik Chodzko-Zajko
Reminiscences of a Stock Operator is a fictionalized story based on the trading career of Jesse Livermore. It follows his journey from the age of 15 when he made his first $1,000 to becoming a Wall Street legend.
See how he learned the ins-and-outs of trading the hard way while losing his fortune and then making it all back. Decades after its original publication, readers are still getting tremendous value from Livermore’s experience.
What Ludwik Chodzko-Zajko, IG Dealer, has to say about this book:
‘It will teach you a lot of mistakes that you will probably make at some point. It’s a fascinating read because he goes through so many things that contemporary traders do today.’
3. The Intelligent Investor by Benjamin Graham
Recommended by IG Market Strategist, Jingyi Pan
The Intelligent Investor is the key text on value investing – an investment approach developed by Benjamin Graham at Columbia Business School during the 1920s.
Graham’s philosophy of ‘value investing’ — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market Bible ever since its original publication in 1949. According to Warren Buffett, ‘this was by far the best book on investing ever written’.
What Jingyi Pan, IG Market Strategist, has to say about this book:
‘Because of the noises in the market, very often when we talk about a company or a security, the value does not equate to the price which create investment opportunities.’
4. Technical Analysis of the Financial Markets by John Murphy
Recommended by DailyFX Analyst and Editor, Martin Essex
Written by John J. Murphy – a former director of technical analysis at Merrill Lynch – Technical Analysis of the Financial Markets is widely regarded as a bible for traders. This outstanding reference has already taught thousands of traders the concepts of technical analysis and their application in the futures and stock markets.
Covering the latest developments in computer technology, technical tools, and indicators, the second edition features new material on candlestick charting, intermarket relationships, stocks and stock rotation, plus state-of-the-art examples and figures. Readers gain a thorough and accessible overview of the field of technical analysis, with a special emphasis on futures markets.
What Martin Essex, DailyFX Analyst and Editor, has to say about this book:
‘The book provides everything you need to know about trading using technical analysis. It’s the perfect handbook for everyone, from beginner to expert, from the day trader to the long-term investor.’
5. The Big Short by Michael Lewis
Recommended by IG Premium Client Manager, Bianca Fischer
The crucial question was this: Who understood the risk inherent in the assumption of ever-rising real estate prices, a risk compounded daily by the creation of those arcane, artificial securities loosely based on piles of doubtful mortgages?
Written by Michael Lewis, The Big Short tells the story of the biggest housing bubble in history and the people who saw it coming. They bet against the subprime mortgage market and ended up profiting from the financial crisis of 2007 to 2008.
What Bianca Fischer, IG Premium Client Manager, has to say about this book:
‘As Michel Lewis sums it up well… the system works well until the first participant such as the buyers fall away.’
6. Trading in the Zone by Mark Douglas
Recommended by IG Market Analyst, Monte Safieddine
Trading in the Zone is a guide to the attributes that traders require in order to become successful. Douglas uncovers the underlying reasons for lack of consistency and helps traders overcome the ingrained mental habits that cost them money.
He takes on the myths of the market and exposes them one by one teaching traders to look beyond random outcomes, to understand the true realities of risk, and to be comfortable with the probabilities of market movement that governs all market speculation.
What Monte Safieddine, IG Market Analys, has to say about this book:
‘We cannot get financial freedom without putting in proper, consistent, rules in place to ensure that success.’
7. Market Wizards by Jack D. Schwager
IG podcast interview with the author
What separates the world’s top traders from the vast majority of unsuccessful investors? In this iconic financial classic, Jack Schwager sets out to answer this question in his interviews with superstar money-makers including Bruce Kovner, Richard Dennis, Paul Tudor Jones, Michel Steinhardt, Ed Seykota, Marty Schwartz, Tom Baldwin, and more.
While these stories make for an entertaining read, the book’s real value lies in the commonalities it reveals between the interviewees. These show that it’s not luck or rare personal attributes that determine success in the markets, but rather a solid methodology and the right mental attitude.
What David Joseph, Head of DailyFX USA, has to say about this book:
‘Market Wizards is one of my favourite trading books – the interviews with a variety of legendary investors reveal the characteristics and internal drive required to execute a host of investment strategies, across a variety of asset classes.’
8. When Genius Failed by Roger Lowenstein
IG podcast interview with the author
When Genius Failed charts the rise and fall of Long-Term Capital Management – a hedge fund that had more than US$120 billion under management before it collapsed in 1998, prompting a bailout by the Federal Reserve. LTCM believed that their finely-tuned computer models, developed by two winners of the Nobel prize in economics as well as PhDs from Harvard, had tamed the genie of risk and would allow them to bet on the future with near mathematical certainty.
Four years later, when a default in Russia set off a global storm that Long-Term’s models hadn’t anticipated, its supposedly safe portfolios imploded. In five weeks, the professors went from mega-rich geniuses to discredited failures.
What John Kicklighter, DailyFX Chief Strategist, has to say about this book:
‘The story is very compelling. It draws many parallels to so many tipping points in the global financial system. It is a timely financial history book.’
9. Pit Bull: Lessons from Wall Street’s Champion Trader by Martin Schwartz
IG podcast interview with the author
Pit Bull: Lessons from Wall Street’s Champion Day Trader is a walkthrough of the career of Martin ‘Buzzy’ Schwartz. The man whose nerves of steel and killer instinct in the canyons of Wall Street earned him the nickname ‘Pit Bull’ after years of successfully trading on Wall Street.
The book provides fascinating lessons to beginners and experts alike on the attitude, styles and strategies required to become a winner. It not only gives insight into how to make money, but into the lifestyle required to be a professional trader.
What Konstantin Oldenburger, IG Financial Writer, has to say about this book:
‘Tells the story about how Marty Schwartz went from practically nothing to becoming one of the best traders around. I believe that his success was based on a core talent as a discretionary day trader, who could read psychology and momentum really well.’
10. Investment Biker by Jim Rogers
IG podcast interview with the author
Investment Biker: Around the World with Jim Rogers explores the world of finance in a completely unique way. It follows the Wall Street legend Jim Rogers throughout his 22-month motorcycle ride across 52 countries. He analyses the market value of each nation, in order to paint a picture of the state of the global economy.
Along with George Soros, Jim Rogers was the co-founder of the Quantum Fund and Soros Fund Management. This book encourages adventure in both experiences and investment opportunities – so much so that Rogers has been heralded as the ‘Indiana Jones of finance’ by Time magazine.
What Christopher Vecchio, DailyFX Currency Strategist, has to say about this book:
‘Twenty-five years later, Jim Rogers’s book still reveals insights into the populism sweeping Western economies. If you want to understand more about why the global economy is in the shape it is, this is a must-read – and re-read for those that haven’t touched it in years.’
The fifth perspective
I hope you enjoy some of these books as much as I did. Learning is a never-ending journey — and especially true when it comes to investing and managing our own money. If you want to know more about what the financial experts think about these books, you can click here to access all the videos and podcasts on IG’s website.
This article is brought to you by IG Asia.