Investment Books
“All I’m looking for is one good idea.”
—Carlton Lutts, founder of Cabot Heritage Corporation, on reading books.
These books are recommended by Cabot editors to help you become a better investorWe have a wonderful library of investment books here in the Cabot offices and refer to them very often in our publications. This list will continue to grow throughout the year... here are some of our favorites.
Hedgehogging by Barton Biggs
Recommended by
Michael Cintolo, Vice President of Investments and Editor of
Cabot Market Letter and
Cabot Top Ten ReportHedgehogging is a book by Barton Biggs, a Morgan Stanley veteran who teamed up with a couple others to start his own hedge fund back in 2003. Much of the book is indeed about his journey to starting a hedge fund, but really, to me, the first 100 pages or more were a bunch of two to four page short investment stories that related to people he knew in the business. To me, this is the best kind of investment book because you can often glean many lessons and insights from reading about others' investment troubles (and successes).
How to Trade in Stocks by Jesse L. Livermore
Recommended by
Michael Cintolo, Vice President of Investments and Editor of
Cabot Market Letter and
Cabot Top Ten ReportIn his 1940 book,
How to Trade in Stocks, Jesse L. Livermore gives step-by-step guidance on reading market and stock behaviors, analyzing market sectors, market timing, money management and emotional control. Livermore, an investing legend, said there are just a handful of times each year when he would be active—near the intermediate-term turning points in the market. Other than that, he let his account his idle, making sure he didn’t lose money, and preparing for the big swing when the market changed course.
Technical Analysis and Stock Market Profits by Richard Schabacker
Recommended by
Michael Cintolo, Vice President of Investments and Editor of
Cabot Market Letter and
Cabot Top Ten ReportIf you're just beginning in the world of chart reading, this is a good guide. We don't subscribe to all of the patterns he talks about, but it's still a great place to start.
You Too Can Be a Stock Market Genius by Joel Greenblatt
Recommended by
Brendan Coffey, Analyst and Editor of
Cabot Green InvestorGotham Capital founder Joel Greenblatt is a legend among hedge fund managers for his fund’s two-decade run of 30% annualized returns. His 1999 book meant for the individual investor,
You Too Can Be A Stock Market Genius, never caught on with the man on the street as he wished, but instead became the must-read tome among young hedge fund hotshots. Much of Greenblatt’s techniques are too complex to be of use to the individual investor, but his overall philosophy lends us a valuable nugget—there are stocks that are overlooked by the market for reasons not related to fundamentals—odd ducks that don’t attract analyst coverage and are unloved by the masses, at least for a time. These stocks provide a much higher chance of making money once the market recognizes their value.
Security Analysis by Benjamin Graham
Recommended by
J. Royden Ward, Analyst and Editor of
Cabot Benjamin Graham Value Letter
Benjamin Graham’s classic book,
Security Analysis, laid the framework for the value investing system. Individuals and Wall Street professionals consider the timeless book, published in 1934, an investing bible.
Security Analysis thoroughly explains Graham’s value investing methods, including how to value stocks, the margin of safety and guidelines for successful investing.
The Intelligent Investor by Benjamin Graham
Recommended by
J. Royden Ward, Editor of
Cabot Benjamin Graham Value LetterBenjamin Graham penned
The Intelligent Investor in 1949, and the book has since been called “by far the best book on investing ever written,” by Warren Buffet, one of Graham’s students and followers. Editor and analyst J. Royden Ward uses the criteria outlined in the book to select the stocks for the Classic Benjamin Graham Model found in the Cabot Benjamin Graham Value Letter.
How I Made $2,000,000 in the Stock Market by Nicolas Darvas
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month ReportIn the book,
How I Made $2,000,000 in the Stock Market, by Nicolas Darvas, the author details how he made $2 million in the stock market during the 1970s. Frequently on the road, Darvas would have Barron’s shipped to him to see how various stocks had acted the previous week. Instead of reading through all the articles and opinions, he would simply throw everything away except for the quotes section. This way he could see what was happening in the market and make judgments without being influenced by news of the week. And it worked wonders! Our advice: Take a step back from the day-to-day news and gyrations. Instead, keep focused on the big picture. Yes, it's fun and exciting to watch things unfold minute by minute. But we contend you'll make more money by ignoring the loudmouths on TV and just staying focused on the major trends.
Tape Reading and Market Tactics—The Three Steps to Successful Stock Trading by Humphrey Neill
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month ReportHumphrey Neill, who later became famous as the Vermont Ruminator, wrote this book in 1931 when he was vice president of Westel Market Bureau, Inc. Neill’s three steps to successful trading are: (1) Familiarize yourself with the methods of the institutions that move the market. (2) Learn how to interpret the actions of both these groups and the investing public. (3) Achieve mastery of yourself; of the “temperament, emotions, and the other variables that go to make up human nature.” The biggest obstacle to successful trading is the inability to cut losses short, as Neill said, “The one thing which retards success in trading, more than any other, is the unwillingness of many of us to accept losses, cheerfully and quickly, when we realize that we have misjudged the action of the market.”
New Market Wizards by Jack Schwager Recommended by
Michael Cintolo, Cabot Vice President of Investments and Editor of
Cabot Market Letter and
Cabot Top Ten ReportThe second in a three-book series in which Jack Schwager interviews top traders and investors, looking for insights. All of the books are highly recommended, and each is available cheaply in paperback. This book, originally published in the early 1990s, contains an interview with William Eckhardt, who was actually a mathematician. The interview touches on the personal side of investing and getting in tune with your own tendencies, which will help you make more money. The book contains many more helpful interviews and points.
Market Wizards and
Stock Market Wizards by Jack Schwager
Recommended by
Michael Cintolo, Cabot Vice President of Investments and Editor of
Cabot Market Letter and
Cabot Top Ten ReportThese books contain great interviews with a few dozen of the best investors in the world. You are guaranteed to learn some things, about the market and yourself.
Invest Like a Shark by James DePorre
Recommended by
Paul Goodwin, Analyst and Editor of
Cabot China & Emerging Markets ReportJames DePorre lost his hearing, career and marriage in the early 1990s, and turned to online investing. His book details his investment strategy for average, individual investors. DePorre explains his theory that small investors can beat the Whales of Wall Street by using speed and flexibility to their advantage. DePorre encourages investors to use their small size, quickness and aggressiveness to beat to outmaneuver investing giants.
Inside the Investor’s Brain by Richard L. Peterson
Recommended by
Paul Goodwin, Analyst and Editor of
Cabot China & Emerging Markets ReportInside the Investor’s Brain provides investors with the tools they need to understand how emotions and mental biases affect the way they react to market movements and manage money. Richard Peterson provides readers with techniques for understanding their financial psychology, so that they can improve their performance. Inside the Investor’s Brain discusses many mental traps and how they play a role in investing. This book contains descriptions of the work of neuroscientists, financial practitioners and psychologists, offering an expert's view into the mind of the market.
One Up on Wall Street by Peter Lynch
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month ReportIn
One Up on Wall Street, Peter Lynch writes about his theory that average investors can become experts in their field and pick winning stocks as well as Wall Street professionals just by doing some research. The author writes that there are many investment opportunities for the average investor that can be found by observing business developments and taking notice of what’s going on in the world. Lynch writes that investors will be rewarded in the long run if they ignore the fluctuations of the market and speculation about interest rates.
The Battle for Investment Survival by Gerald Loeb
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month Report
In
The Battle for Investment Survival, the turf is Wall Street, the goal is to preserve your capital at all costs, and to win is to “make a killing without being killed.” This memorable classic, originally written in 1935, offers a fresh perspective on investing from times past. The Battle for Investment Survival treats investors to a straightforward account of how to profit—and how to avoid profit loss—in what Loeb would describe as the constant tug-of-war between rising and falling markets. Gerald M. Loeb worked on Wall Street as a stockbroker for 40 years, beginning in the late 1920s. He was also a financial writer whose articles were published in Barron’s, Wall Street Today and Investor Magazine.
How to Make Money in Stocks by William O’Neil
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month ReportThis bestselling guide to buying stocks provides readers with the first in-depth explanation of William O'Neil's innovative CAN SLIM investing method. O'Neil, the founder of Investor's Business Daily, later revised his classic text and provided readers with a newer glimpse on how the average investor can make money in the equities market. How to Make Money in Stocks is a great reference for the individual investor on how to stay afloat, and ahead, in the fluctuating equities markets of the 21st century.
Being Right or Making Money by Ned Davis
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month Report
One of the most highly regarded independent investment research firms, Ned Davis Research, shares not only its views on grave near-term economic risks and how the investment world works, but more importantly, it provides the tools, tactics and strategies necessary for managing risks and making money. A Phi Beta Kappa graduate of the University of North Carolina at Chapel Hill, who attended the Harvard Graduate School of Business, Ned Davis has been professionally involved in the stock market since 1966.
Winning on Wall Street by Martin Zweig
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month ReportFinancial adviser Martin Zweig has been fascinated by the stock market since childhood, especially the buying and selling of stocks to make money. The book contains a clear and detailed analysis of market trends, interest rates, Federal Reserve policy, debt volume and market momentum, among other things, that carries the technical side of stock market theory about as far as it can go. In the book, Zweig calls Jesse L. Livermore on of his heroes and recommends the 1923 book,
Reminiscences of a Stock Operator by Edwin Lefevre.
Way of the Turtle by Curtis Faith
Recommended by
Michael Cintolo, Cabot Vice President of Investments and Editor of
Cabot Market Letter and
Cabot Top Ten Report“We're going to raise traders just like they raise turtles in Singapore,” trading guru Richard Dennis reportedly said to his longtime friend William Eckhardt nearly 25 years ago. What started as a bet about whether great traders were born or made became a legendary trading experiment that, until now, has never been told in its entirety. Way of the Turtle reveals, for the first time, the reasons for the success of the secretive trading system used by the group known as the “Turtles.” Top-earning Turtle Curtis Faith lays bare the entire experiment, explaining how it was possible for Dennis and Eckhardt to recruit 23 ordinary people from all walks of life and train them to be extraordinary traders in just two weeks.
Only 19 years old at the time—the youngest Turtle by far—Faith traded the largest account, making more than $30 million in just more than four years. He takes you behind the scenes of the Turtle selection process and behind closed doors where the Turtles learned the lucrative trading strategies that enabled them to earn an average return of more than 80 percent per year and profits of more than $100 million. Offering his unique perspective on the experience, Faith explains why the
Turtle Way works in modern markets, and shares hard-earned wisdom on taking risks, choosing your own path and learning from your mistakes.
The Roaring 2000s Investor by Harry S. Dent
Recommended by
Timothy Lutts, Cabot Chief Investment Strategist and Editor of
Cabot Stock of the Month ReportIn the New York Times bestseller,
The Roaring 2000s Investor, Harry S. Dent, forecast a booming market that will continue to rise through the first eight years of the 21st century. Dent turns his uncanny ability to see our economic future to the specific strategies you can use to get the life you want. Whether you are planning to retire in 10 years or 40, looking for a larger home or a smaller one, planning to put several children through college or planning for life after they have graduated, you will find what you are looking for in The Roaring 2000s Investor. The ultimate goal of the book is to give investors personalized and effective financial planning advice that fits their specific needs and allows them to achieve their highest life goals through the great boom of the next decade—and the hard times that Dent predicts will follow.
Reminiscences of a Stock Operator by Edwin Lefevre
Recommended by the entire Cabot stafft
Reminiscences of a Stock Operator, published in 1923, is the classic tale of the fictionalized life of one of the most flamboyant and successful investors ever, Jesse L. Livermore. The book tells the story of Livermore's progression from day trading in the so-called New England “bucket shops,” to market speculator, market maker, market manipulator and finally to Wall Street where he made and lost his fortune several times over. Along the way, Livermore learns many lessons. Despite the book’s age, it continues to offer insights into the art of trading and speculation. In Jack Schwager’s Market Wizards, Reminiscences of a Stock Operator was quoted as a major source of stock trading learning material for traders by many of the people who Schwager interviewed.
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