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Making sense of the stock market (.hindu)

Books that teach about investing in stocks

Got some money to invest in the stock market? Not sure if you should do it yourself or part your hard-earned money with a money manager whose performance is very likely to be mediocre? Or just want to know if investing is your cup of tea? Whatever be the case, here are a some good books that can help you understand the fundamentals of investing, if not make you incredibly rich over time.

F Wall Street, written by Joe Ponzio, a relatively unknown hedge fund manager, provides everything a beginner needs to know about investing. Unfortunately, it remains a hidden gem.

The book provides a strong but accessible introduction to everything — from the philosophy of investing to how to value a business to keeping your patience. An equally good book is One Up on Wall Street, a bestseller by legendary American money manager Peter Lynch. It describes the tale of how Mr. Lynch found stocks whose price multiplied manifold over the years. The book has been criticised for making investment look too simple, but it is likely to open your eyes to the incredible opportunities hidden in the stock market.

Lastly, you’re never going to be a good investor until you understand the nuts and bolts of accounting. Sensible investing requires reading and making sense of annual reports, which is impossible until you understand the language of business. It takes a little persistence, but in case you want to test the waters, Crash Course in Accounting and Financial Statement Analysis, written by Matan Feldman and Arkady Libman, provides a very accessible introduction to accounting for beginners. You’re likely to find a plunge into any introductory or intermediate accounting book a lot less daunting after this one.

As a further mention, once you feel you can handle them, all four books written by accounting professors Charles W. Mulford and Eugene E. Comiskey should set you on course to learning everything you need to know about issues on advanced accounting and due diligence. After you’re done reading these books, you’re equipped with all that you need to analyse stocks in an expert manner. Happy investing!

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