3 Books That Made Me a Better Investor
Buffett, Munger, Musk, Wood, Gates, et al. Aside from being billionaire titans of industry, each one of these investing idols has one thing in common:
They read; a LOT…
Reading is the best way to acquire a vast wealth of knowledge and will make you a better investor. All of the analysts here at MyWallSt are avid readers — we even have an in-house mini-library in our Dublin HQ. If you read, what you read, and your taste in reading materials are frequent interview questions in our hiring process — the latter point being a key deciding factor.
(That last part was sort of a joke, btw)
Anyway, if you want to be a better investor, whether or not it’s during your 9-5 or when you go to bed, reading should be the number one tool in your arsenal. So, here’s a quick look at three books that I personally read in the past year that made me a better investor:
1. ‘One Up On Wall Street’ by Peter Lynch
“Know what you own, and know why you own it”
This book is the cornerstone of our investment strategy here at MyWallSt, and one that our staff practices in their personal portfolios as well. The three main tenets of the book are:
Investing opportunities are everywhere
Buy what you know
Hold for the long term.
Lynch writes from his own personal experience, having gone from an intern at Fidelity Investments to growing a small mutual fund called the Magellan Fund from $18 million to $14 billion over the course of 23 years. Averaging almost 30% annual return, the Magellan Fund was the most successful mutual fund in the world.
‘One Up On Wall Street’ is a must for anyone thinking of getting started in buying stocks. Lynch’s narrative gives a perspective that is devoid of intimidation and trepidation. His demystification of the stock market for the small retail investor is something we try to emulate here at MyWallSt. We truly feel it is the best investing book to begin your journey.
2. ‘The Psychology of Money’ by Morgan Housel
“Good investing is not necessarily about making good decisions. It’s about consistently not screwing up.”
If you’ve read any of Morgan Housel’s work on The Collaborative Fund, then you know that he is one of the most-knowledgable money handlers in the business.
While many financial books can feel tome-like and bogged down in figures and charts, Morgan Housel’s inaugural book is one of the easiest and most-relatable books about managing your wealth that you could find. Condensed into a compact 20 lessons, Housel draws from relevant real-life experiences and gives them an insightful spin, while also drawing distinctions between terms that might not seem so different on the surface — riches vs. wealth, rational vs. reasonable, fee vs. fine.
If you were to read just one book about money management for the rest of your life, this would be the one. Easy to read, enjoyable, and insightful, there is nobody who does financial management better than Housel.
3. ‘Bad Blood’ by John Carreyrou
“The way Theranos is operating is like trying to build a bus while you’re driving the bus. Someone is going to get killed.”
As investing books go, ‘Bad Blood’ does not conform to the norm. It reads more like a detective thriller than a book about investing. However, that doesn’t make it any less educational than the other books on this list. And, with founder Elizabeth Holmes undergoing a very public trial as of the time of writing, it’s pretty good timing to dig in.
Anyone interested in the stock market will know the ill-fated Theranos story. It’s a tale of fraud and deceit surrounding the inexhaustible search for the next unicorn that will cause the reader to constantly return to the question:
“How do they keep getting away with this?”
Giving a detailed examination of the Silicon Valley startup scene and its ability to be manipulated, John Carreyrou’s bestseller is tough to put down.
I highly recommend ‘Bad Blood’ to anyone with the slightest interest in investing, tech companies, Silicon Valley, or investigative journalism. The Wall Street Journal alum paints a fascinating portrayal of greed which will make any investor introspective about their own investing strategy. The main takeaways we can take from this book are to invest in what you know and don’t believe the hype.