讀書清單 Value Reading List

The Young Guys at Berkshire: Ted Weschler (left) Todd Combs (right)

The Young Guys at Berkshire: Ted Weschler (left) Todd Combs (right)

This is a reading list for the LSE Value Investor Club and for who wants to gain more insight into value investing.

My suggestion for anyone interested going into any field is, if you want to be the best, you should to learn from the best.

You don’t need to be the smartest guy in the market, but rather you have to develop a contrarian view about how to interpret stock market. Value investors are business-oriented investors. We should not look at investing as number-crunching or chart-drawing games. Neither is fundamental analysis alone sufficient. You need to view yourself as not just a security analyst, but also a business analyst. With such mindset, there are a couple of things you need to learn in order to be a better investor.

 

Some short but great reading on/from Warren Buffett:

  1. Super Investors of Graham and Doddsville - Columbia Business School
    • A classic, written in 1984 by Buffett
    • Click "here" for PDF file
  2. The Evolution of Warren Buffett’s Career from 1936 to 2013 - Old School Value
    • Click "here" for link
  3. Buffett FAQ
    • If you are a fan, you will love this.
    • Click "here" for link
  4. Alice Schroeder Q&A
    • Alice is the author of Buffett’s only authorized autobiography, Snowball
    • Click "here" for PDF file

For those of you who come into this field as beginners, I recommend the following as good introduction to the investment field:

 


1. Investing

Some of my personal favorites

 

To get some solid understanding about investing in general, read these books:

  1. Margin of Safety - Seth Klarman
    • The one book that opened my door to value investing
    • The book is out of circulation and extremely expensive. Click "here" for PDF file
  2. One up on Wall Street - Peter Lynch
    • Excellent book. Easy to understand for beginners as well.
  3. Buffett Partnership Letters - Warren Buffett
    • Buffett’s writing to his partners when he started manage money for his partners at the age of 27 (1957-1970)
    • Click "here" for PDF file
  4. The Essay of Warren Buffett - Laurence Cunningham
    • Timeless. It summed up Buffett’s annual shareholder letter in short length. But if you have time, I recommend you read through most of Buffett’s shareholder letters. Skip the briefing on operating businesses if you don’t have the time to read them.
    • Highly recommended even if you are not going to pick your own stock.
  5. Common Stock and Uncommon Profit - Phil Fisher
    • Phil Fisher himself is a great investor, and Buffett famously said he’s 70% Graham and 30% Fisher. Teaches you ways to look at companies and stocks.

 

To gain more insights into value investing, read these books:

  1. You can be a stock market genius - Joel Greenblatt
    • As promotional as the title may sound, this is one of the greatest investment book out there. Joel is one of my favorite investors, and in this book he laid out his previous investments in simple language
  2. Manual of Ideas - John Mihaljevic
    • Even in a niche like value investing, there are many styles of value investors. This book provides examples of each. It’s a great book for those of you who want to become a stock picker.
  3. The Art of Value Investing - Whitney Tilson
    • Cites quotes from many value managers
    • If you know little about the value fund communities, this one should give you a good overview of the fund manager’s thinking.
  4. Intelligent Investor - Benjamin Graham
    • Along with “Security Analysis”, Columbia professor Ben Graham's book changed Buffett’s life.
  5. The Most Important Things - Howard Marks
    • Howard Marks is a great teacher, he publishes his thoughts periodically.
    • Click "here" for his memo

 


2. Accounting

Accounting and business knowledge are just as important as investment knowledge

  1. Financial Statement Analysis - Martin Fridson
    • Former governor of CFA institute, he wrote a great book on how to dissect financial statements, giving out real examples in his book.
  2. Quality of Earnings - Thornton O'Glove
    • The earning power of a business is the most important figures for any investor. This book does an outstanding job educating investor how o discover red flag and signals of poor quality of earnings.
  3. Financial Shenanigan - Howard Schilit
    • A classic book on discovering accounting manipulation.
  4. Free Cash Flow - Christy George
    • Similar to quality of earnings.

 

 


3. Beyond Investing

Great investors are often great philosophers in life

 

  1. Poor Charlie’s Almanack - Charlie Munger
    • Buffett’s partner, Charlie Munger, is a man of wisdom. This book contains some of his speeches and goes beyond finance and investing. This is a book everyone should read. If you only have time for one book, this is it. Highly recommended.
  2. The Education of a Value Investor - Guy Spier
    • An honest, story-telling of a value investor’s life. This is a good read for those who are early in their career because it contains multiple life lessons, particularly for those who wants to enter into the financial sectors.
  3. Outsiders - William Thorndike
    • One of my personal favorite. It doesn’t teach you much about investing, but it does teach you the power of "capital allocation”. It’s a powerful concept not only applicable in investment world but also in the business world. Great capital allocators are rare. 
    • Click "here" for William Thorndyke’s Google Talk

 


4. Sources

Some great learning sources

  1. Valuewalk.com
    • This site shares information on the fund industry, but I feel like they have been less selective about the information they publish now. Be your own filter.
  2. Valueinvestorsclub.com
    • You can sign up to be a free member. People submit ideas here, and the quality of ideas is better than SeekingAlpha.
  3. Corner of Berkshire and Fairfax
    • A forum where lots of experts discuss and share ideas.
  4. Seeking Alpha.com
    • Go to the “transcript" section for management’s conference call in text. It’s an invaluable learning source and you get to listen/read directly from some of the great/lousy managements.
    • Note some of the analysis published by the authors are sub-par, so never rely on the analysis for your investment.
  5. Grants Interest Rate Observer - Jim Grants
    • Great bi-weekly publication on investment idea and the market. If you are a LSE you get to subscribe for $50/year, lucky you!
  6. Tilson Fund article archive - Whitney Tilson
    • An archive with lots of articles on Buffett. Good source.
    • Click "here" for link


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