The Most Important Finance Books Ever Written
Benjamin Graham, 'The Intelligent Investor'
Benjamin Graham was a mentor to Warren Buffett, and is considered to be the father of value investing, which Graham became famous for in both his teachings at Columbia Business School and in his book, Security Analysis.
'Security Analysis' is the longest running investment text ever published, and 'The Intelligent Investor' was called "the best book about investing ever written" by Warren Buffett.
John Burr Williams, 'The Theory of Investment Value'
John Burr Williams was one of the first financiers to utilize the discounted cash flow theory, which is still an extremely popular method for company evaluation.
Williams is a founder of fundamental analysis and his 1938 book, 'The Theory of Investment Value', is one of the most popular investing books in history. In this book, he articulates the DCF theory and focuses heavily on dividend based valuation.
Williams held four Harvard degrees and taught economics at the University of Wisconsin. Along with 'The Theory of Investment Value', Williams published 'International Trade Under Flexible Exchange Rates' in 1954 as well as many articles for economic journals.
Philip Fisher, 'Common Stocks and Uncommon Profits'
Philip Fisher's book, which was published in 1958 and titled 'Common Stocks and Uncommon Profits' contains many studies that are still applied heavily by investors nearly 50 years later. It was the first ever investment book to make the New York Times bestseller list.
Fisher's claim to fame was his focus on growth investing. Along with his writing, Fisher founded Fisher and Company, a money management firm, in 1931. He is famous for buying shares in Motorola in 1955 and holding those shares until his death in 2004. In Fisher's opinion, the best time to sell a stock is "almost never."
Eugene Fama, 'The Foundations of Finance'
Eugene Fama received his undergraduate degree from Tufts University and his MBA from the Booth School of Business at the University of Chicago. He continued to teach at the University of Chicago after receiving his Ph.D. He's known as the father of the efficient market hypothesis.
'The Foundations of Finance: Portfolio Decisions and Securities Prices' is one of many pieces of work by Fama, and covers many of the ground works of finance and investment practices. Fama has published many works for journals and other publications, but 'Foundations of Finance' is a highly recommended text.
Peter Lynch, 'One Up On Wall Street'
Peter Lynch is a research consultant at Fidelity Investments. He received his undergraduate degree from Boston College and his MBA from the Wharton School of the University of Pennsylvania. As a portfolio manager, Lynch drove Fidelity's Magellan Fund from holding just $18 million in assets to $14 billion when he retired.
Lynch has two very popular books, 'One Up On Wall Street' and 'Beating the Street.' The first book details Lynch's investment technique and provides many of his theories on investing. The second provides the application of said techniques and theories, and elaborates on many specific stocks and investments that Lynch made.
Aswath Damoradan, 'Damodaran on Valuation'
Aswath Damodaran is the legendary finance professor at the Stern School of Business at New York University. He teaches both corporate finance and equity finance, and graduated from UCLA, The Indian Institute of Management Bangalore, and Madras University.
One of Damodaran's many books, 'Damodaran on Valuation' is his most popular book, in which he elaborates on which models to utilize in any valuation scenario.
Jeremy Siegel, 'Stocks for the Long Run'
Jeremy Siegel is a finance professor at the Wharton School of the University of Pennsylvania, and contributes regularly to nearly every financial television network and also Yahoo! Finance. Siegel completed his undergraduate studies from Columbia University and received his Ph.D. from MIT.
Siegel's most popular book is 'Stocks for the Long Run.' In this book, he argues that the stock market is actually very safe as he details the history of the stock market and why investing in stocks long-term is a wise decision. Siegel states that he would much rather see investors push for long-term, diversified investments rather than pursuing hot stocks or trying to time the market.
Robert Shiller, 'Irrational Exuberance'
Robert Shiller is an economics professor at Yale University and is one of the developers of the Case-Shiller index. Shiller graduated from the University of Michigan and received his masters and Ph.D. from MIT.
Shiller authored 'Irrational Exuberance' looks at the market crash of 2000, when the first edition of the book was published. He had predicted the peak and crash, but was not attempting to educate potential investors on market timing, but rather on understanding long-term investments. The second edition of the book predicted the housing market crash.
John Murphy, 'Technical Analysis of the Futures Market'
John Murphy is widely considered to be the father of inter-market technical analysis. He graduated from the University of Rhode Island with a degree in Economics and also received his MBA from URI.
Murphy's book, 'Technical Analysis of the Futures Market' has a rather straight forward title. Murphy provides a history of the futures market and conversationally discusses how to attack a very complex market. While this is a niche book, there is likely no better book in regards to analyzing the future market than Murphy's book.
Robert C. Merton, 'Continuous-Time Finance'
Robert C. Merton is a professor at the MIT Sloan School of Management and Nobel laureate in Economics. He received his undergraduate degree from Columbia University and received his masters from the California Institute of Technology, as well as a doctorate in economics from MIT. Merton also co-founded Long-Term Capital Management.
Merton's book 'Continuous-Time Finance (Macroeconomics and Finance)' dives into modern finance and as the title states, continuous-time finance. The book is a collection of papers written by Merton over 25 years, and the combination of the papers makes for one of the most intellectually stimulating investment books ever created.
John Bogle, 'Common Sense on Mutual Funds'
John Bogle founded and was the CEO of The Vanguard Group before his retirement. He earned his undergraduate degree from Princeton University.
'Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor' is nearly universally known as a must read among anyone who wants to learn about investing. Bogle elaborates on investment strategies, mutual fund values, and uses quantifiable reasoning to come to his conclusions. Three main keys that Bogle notes are to stay the course, that impulse is your enemy, and that time is your friend.
Warren Buffett, 'The Essays of Warren Buffett'
Warren Buffett is one of, if not the, most popular investors in the history of the world. Buffett graduated from the University of Nebraska at the age of nineteen and earned his masters in economics from Columbia, under the teachings of Benjamin Graham and David Dodd.
'The Essays of Warren Buffett: Lessons for Corporate America' is a series of letters that Buffett sent to shareholders of his company, Berkshire Hathaway. The letters serve as an education of business principles and concepts that he has utilized throughout the existence of his tremendously successful company, and provide a first hand look at how he has made his business so successful.
Anthony Crescenzi, 'The Strategic Bond Investor'
Anthony Crescenzi is a graduate of the City University of New York and also received his MBA from St. John's University. Currently, Crescenzi is an executive vice president, market strategist, and portfolio manager for PIMCO.
Crescenzi has published five books, the most notable of which is 'The Strategic Bond Investor: Strategies and Tools to Unlock the Power of the Bond Market.' There are many stock and investing books, but very few focus heavily on bonds as Crescenzi does in this book. He helps explain every detail of the market. Bill Gross has a very kind review of his book on Amazon.com.
Geoffrey Moore, 'The Gorilla Game'
Geoffrey Moore is a venture partner at Mohr Davidow Ventures, and formerly worked at The McKenna Group and a company in which he founded, The Chasm Group.
'The Gorilla Game' details Moore's opinion on how to invest in high tech companies. Moore uses a more conversational approach, rather than mathematically heavy, to determine which technology companies are bound to grow and which ones are bound to tumble. He breaks companies down to three categories, The Gorilla (the leader), the Chimp (the challenger), and the Money (the follower).
Burton Malkiel, 'A Random Walk Down Wall Street'
Burton Malkiel was twice the chairman of the economics department at Princeton University. He graduated from Boston Latin School and received his MBA from Harvard University.
Malkiel's most famous work, and one of the most popular finance related books of all time, is 'A Random Walk Down Wall Street.' The book examines many popular investing techniques, specifically both technical and fundamental analysis. Malkiel breaks down both strategies and notes the flaws in each, suggesting that passive strategies will provide better results than either of these methods.
Adam Smith, 'The Money Game'
Adam Smith is a pen name for the Harvard-and-Oxford trained George W. Goodman. Smith is the author of three books, most notably 'The Money Game.' Goodman was once the editor of The Harvard Crimson.
In 'The Money Game' breaks down the stock market and was his first non fiction title. Smith discusses skepticism revolving around reported numbers and uses a humorous and conversational tone to discuss the inner workings of Wall Street.
Nassim Taleb, 'The Black Swan'
Nassim Taleb is a professor at Oxford University, after having formerly been a hedge fund manager and Wall Street trader. He completed his undergraduate studies at the University of Paris, where he also received a Ph.D., and received his MBA from the Wharton School at the University of Pennsylvania.
Taleb's book, 'The Black Swan' focuses on how large, improbable events can completely disrupt any forecasts or expectations of the future. The unpredictable nature of such large events that alter markets adds an additional layer of risk that is often not considered by investors.
George Soros, 'The Alchemy of Finance'
George Soros is the chairman of Soros Fund Management, and he is a graduate of the London School of Economics.
His book, 'The Alchemy of Finance' acts as an instructional guide of the marketplace. He interprets how instrumental investors' perception of market values are, and states that this is what really moves prices up and down.
Edwin Lefevre, 'Reminiscence of a Stock Operator'
Edwin Lefevre was an American journalist and stockbroker who graduated from Lehigh University.
Lefevre's book, 'Reminiscences of a Stock Operator' is a the only fiction book on this list, but his detail of the happenings of Wall Street during the early 20th century make this one of the most classic finance books in history. The book was a 12 article series published in a newspaper, but was eventually put together and published.
Kathryn Staley, 'The Art of Short Selling'
Kate Staley is an expert short seller, and her book 'The Art of Short Selling' breaks down the market of overpriced stocks and how to sell short to make substantial profits. This is an extremely specialized niche, and there are not many publications that break down short selling in the same manner that Staley does in her book.
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
Charles Mackay is a journalist who was educated at the Caledonian Asylum.
Mackay's book, 'Extraordinary Popular Delusions and the Madness of Crowds' attempts to explain why relatively intelligent individuals decide to follow crowds rather than sticking to their own opinions on matters. This is vital in finance due to the nature of the market and its swings.