Nearly every list of the best books on money and investing include the same stalwarts: The Intelligent Investor, A Random Walk Down Wall Street and One Up On Wall Street, to name just a few. Of course, every educated investor should read these titles if they haven’t done so already.
My aim here is to introduce you to some lesser-known works that will also provide valuable lessons and insights and will expand your investing knowledge. After all, while no one can accurately predict the market, the more knowledgeable you are as an investor, the better prepared you will be to handle anything that comes your way. These books have all been published within the last 15 years so they’re relatively current.
The Single Best Investment: Creating Wealth With Dividend Growth by Lowell Miller
I’m especially fond of using dividends to enhance my total returns while collecting passive income. Miller, a portfolio manager with his own firm, poetically sings about the glories of the dividend in this book, quoting William Blake and Mick Jagger along the way.
Miller supplies his basic formula for selecting a good dividend stock: High quality + High yield + Growth of yield = High total returns. Easy in theory, harder in practice — chasing yield can lead you into hot water if a company has to suddenly cut their dividend.
The depth and clarity of Miller’s writing and his ability to simplify chart reading make The Single Best Investment highly recommended for all investors.
Who Needs The Fed?: What Taylor Swift, Uber, And Robots Tell Us About Money, Credit, And Why We Should Abolish America’s Central Bank by John Tamny
Every investor needs to be aware of what’s going on at the Fed, as their policies directly impact the stocks and bonds in your portfolio. Donald Trump is not the only person complaining that the Fed does more harm than good. Tamny, the Political Economy editor for Forbes, succinctly argues that the less government involvement in the economy, the better. He includes effective examples of the free-market efficiencies of Uber surge pricing and how the hiring and firing of college football coaches ensures that only the top performers keep their jobs.
What would normally be a dry topic in less capable hands turns into a quick and thought-provoking read. Tamny writes that government regulation and the Fed’s meddling limits our economic production and slows overall economic growth. He excoriates politicians and big government and makes a compelling argument for the Fed to be abolished.
Even Buffett Isn’t Perfect: What You Can — And Can’t Learn From The World’s Greatest Investor by Vahan Janjigian
Janjigian, another Forbes writer, dives deep into Warren Buffett’sphilosophy and handpicks key lessons that every investor would stand to gain from analyzing Buffett’s investing style and how he runs Berkshire Hathaway BRK.B +0%.
Though most of the book examines Buffett’s successes, Janjigian spends a good amount of time covering Buffett missteps, especially his investment in Pier 1 Imports. Investors would be well served to read carefully about how Buffett unloaded Pier 1 for a loss after realizing he was wrong and used the cash for greater successes. The author also takes Buffett to task for his desire to abolish corporate guidance and his stance on higher taxes for the wealthy.
The Most Important Thing Illuminated by Howard Marks
Marks is the chairman and co-founder of Oaktree Capital Management and is frequently a guest on CNBC. The original version of The Most Important Thing collected Marks’ memos sent to investors of his hedge fund. They’re highly readable and contain a wealth of information useful for any investor.
The “Illuminated” version expands on the original edition by including running commentary on the text from notable investors such as Joel Greenblatt, Seth Klarman and even Marks himself. Essential reading.
Heads I Win, Tails I Win: Why Smart Investors Fail And How To Tilt The Odds In Your Favor by Spencer Jakab
This is one of the more humorous books on investing you will come across. Though Jakab, a former analyst for Credit Suisse and currently a columnist for the Wall Street Journal, paints a frightening picture of how inept most investors are, his jocular style will leave you laughing while teaching you valuable lessons.
Just like with driving a car, many investors have an inflated sense of their own abilities. Jakab uses plenty of behavioral finance studies to prove his point that most investors would be better served with a hands-off approach to investing.
Given Jakab’s background, his chapter on market prognosticators and analyst forecasts is especially illuminating, plus the character of Biff from Back To Future Part II even gets a lengthy shout-out. He also adds a personal touch with a chapter called “The Hungarian Grandma Indicator” about how his mother and her friends got caught up in the tech stock madness in the late 1990s.
Ben Franklin once said, “An investment in knowledge pays the best interest.” These books will undoubtedly help make you a better investor, and your investment in reading them will surely pay off with interest.
Disclosure: The author owns shares in Berkshire Hathaway.
Karl Kaufman is the founder of American Dream Investing, a financial membership service. If you want to get text alerts each time we make a trade, sign up for a trial membership.