Books that teach the art of Finance offer a great way of learning the inside and outside of Finance. By reading a book, you consume a huge amount of research in a relatively short amount of time, and it is one of the best ways to improve your skills. For the financial analyst who wants to better understand the history of their industry and potentially improve their practice, here are 16 suggestions.
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1. The Intelligent Investor
First book I suggest for a financial analyst is the intelligent investor written by Benjamin Graham (born Benjamin Grossbaum; May 8, 1894 – September 21, 1976). He was a British-born American economist and professional investor. Graham is considered the father of value investing, an investment approach he began teaching at Columbia Business School in 1928.
Jason Zweig is an investing and personal finance columnist for The Wall Street Journal. Previously, he was a senior writer at Money magazine, mutual-funds editor at Forbes magazine, and a guest columnist for Time and cnn.com.
2. Barbarians at the Gate
Interested in leveraged buyouts and junk bonds? In 1989, Bryan Burrough and John Helyar wrote the definitive history of these financing types when they recounted the struggle involving the leveraged buyout of RJR Nabisco, a now-defunct food and tobacco conglomerate. The writers originally covered the story as reporters for The Wall Street Journal.
3. Security Analysis
This is the most read book if you are a financial analyst written by Benjamin Graham (May 8, 1894 – September 21, 1976). He was an American economist and professional investor. Graham is considered the first proponent of value investing, an investment approach he began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd through various editions of their famous book Security Analysis. Disciples of value investing include Jean-Marie Eveillard, Warren Buffett, William J. Ruane, Irving Kahn, Hani M. Anklis, and Walter J. Schloss. Buffett, who credits Graham as grounding him with a sound intellectual investment framework.
4. Common Sense on Mutual Funds
John Bogle, the founder of the Vanguard Group mutual fund company, came out with his guide for mutual fund investors in 1999. Bogle makes the case for the value of index-based investing. His book is full of common-sense financial advice, such as noting that the less you pay someone to manage your investments, the more money you’ll keep.
5. Think and Grow Rich
The ambitious mind, Napoleon Hill’s writing career started at 13, when he gave himself the job of “mountain reporter” to small-town newspapers in West County, Virginia. As an adult, Hill became an author of personal growth books, including the multi-volume The Law of Success and one of the 10 best-selling self-help books of all time, Think and Grow Rich. Hill pioneered the modern genre of personal success literature. Highly recommended book for financial analyst.
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6. The Theory of Investment Value
John Burr Williams (November 27, 1900 – September 15, 1989) was an American economist, recognized as an important figure in the field of fundamental analysis, and for his analysis of stock prices as reflecting their “intrinsic value.” He is best known for his 1938 text The Theory of Investment Value, based on his PhD thesis, in which he articulated the theory of Discounted Cash Flow (DCF) based valuation, and in particular, dividend-based valuation.
7. The Alchemy of Finance
Famed hedge fund legend, George Soros, is renowned for his theoretical and practical insight on financial trends dating back to 1992 when he accumulated a fortune and subsequently brought the Bank of England to its knees. Crippling Great Britain’s monetary system in a single day made him one of the most powerful and profitable money managers in the financial world. In this book, Soros explains his theory of comprehensive reflexivity and innovative investment practices to make the market work for you.
8. The Investment Answer
Daniel C. Goldie is president of Dan Goldie Financial Services, LLC, a registered investment advisory firm. A former professional tennis player and Wimbledon quarterfinalist, he has been recognized by Barron’s as one of the top 100 independent financial advisors in the United States. He graduated from Stanford University and has an MBA degree from the Haas School of Business, University of California at Berkeley.
Gordon S. Murray spent more than twenty-five years working on Wall Street, primarily at Goldman Sachs, Lehman Brothers, and Credit Suisse First Boston in a variety of institutional sales and management roles. After his Wall Street career, Murray worked as a consultant with Dimensional Fund Advisors.
9. Liar’s Poker
Michael Lewis used his experience as a bond salesman in the heyday of Salomon Brothers for this legendary 1989 book. He chronicles his own work experiences and also offers a big-picture take on Wall Street during a boom time when the mortgage-backed security market caught fire. A loose sequel of sorts was Lewis’s The Big Short, in which he described the role Wall Street played in the 2000s housing market downturn.
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10. The Millionaire Next Door
Thomas J. Stanley was an author, lecturer, and researcher who started studying the affluent in 1973. He died in 2015. William D. Danko is a professor emeritus at the School of Business, the State University of New York at Albany.
11. A Random Walk Down Wall Street
Burton G. Malkiel is the Chemical Bank Chairman’s Professor of Economics Emeritus at Princeton University. He is a former member of the Council of Economic Advisers, dean of the Yale School of Management, and has served on the boards of several major corporations, including Vanguard and Prudential Financial. He is the chief investment officer of Wealthfront.
12. Competitive Strategy
In this 1980 book, Harvard Business School professor Michael Porter looks at what creates a competitive advantage in a particular industry. Since many financial professionals spend their days analyzing companies, industries, and strategies, Porter’s book provides an ideal starting point.
13. Against the Gods: The Remarkable Story of Risk
Peter L. Bernstein is President of Peter L. Bernstein, Inc., economic consultants to institutional advisors and corporations. His semimonthly analysis of the capital markets and the real economy, Economics and Portfolio Strategy, is read by managers and owners of investments totalling over one trillion dollars. Mr Bernstein is the author of many articles in the professional and popular press, as well as six books in economics and finance, including the bestselling Capital Ideas: The Improbable Origins of Modern Wall Street.
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Traction starts with the premise that all entrepreneurs and business people face similar issues, such as slow growth, profit concerns, and personnel conflict. These issues can cause decisions to be put on hold or fail to be properly implemented. In his book, Gino Wickman suggests there is a solution. “The Entrepreneurial Operating System is a practical method for achieving the business success you have always envisioned. More than 2,000 companies have discovered what EOS can do,” he writes.
15. Reducing the Risk of Black Swans
If you are a financial analyst you probably have read this book. Larry Swedroe and Kevin Grogan, authors of The Only Guide series of investment books and The Only Guide You’ll Ever Need for the Right Financial Plan, have joined forces to write Reducing the Risk of Black Swans. The book is geared toward financial advisors and investors looking to expand their technical knowledge of the evidence-based investing world. In it, they look at portfolio construction and offer a roadmap for investors who want to refine their portfolio.
16. Common Stocks and Uncommon Profits and Other Writings
Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies, introduced almost forty years ago, are not only studied and applied by today’s finance professionals but are also regarded by many as gospel. He recorded these philosophies in Common Stocks and Uncommon Profits, a book considered invaluable reading when it was first published in 1958, and a must-read today.