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The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires
Author: Michael W. Covel
I fell in love with this book instantly. Not just because of the trade secrets, it shares about rags to riches traders, but because it shares these secrets in the form of life lessons.
Wall Street big timers, Richard Dennis and Bill Eckardt, tell the tales of 23 people they helped cultivate into world-class traders in a short period of time. Everyone doesn't have the same background and ending but they do share one thing in coming and that's how to trade effectively and efficiently.
If you're looking to get into trading then this one is a must read.
Standard & Poor's Guide to Money and Investing
Authors: Virginia & Kenneth Morris.
This book is a great starting point for learning stock market and investing fundamentals.Standard & Poor has created a great guide to the basic of investing. We like this book because it covers investment topics like stocks, bonds, and the foundation of the stock market in layman's terms.
There are plenty of pictures throughout the book to compliment the understanding of its concepts and principles. It also is a fairly short read as the book is less than 200 pages and the illustrations take up their fair share fo the content space. You can find this book at your local bookstore or online.
If you're new to investing and want a great reference book as opposed to a narrative style writing, than this is the book for you.
The Intelligent Investor
Author: Bejamin Graham
This is considered a timeless classic for investors and Buffett seems to agree. Deemed one of the greatest investment books of all-time; one of the major concepts it tries to convey is making investments versus making speculations.
Investments are sound financial movements while speculation is simply that, guess work. Graham breaks investors down to two types: defensive and enterprising. Defensive investors are safe with their moves. Securities like bonds and stocks that have increasing dividends would be a defensive move. They look for high grade stocks and bonds at good prices and dismiss riskier investments like foreign bonds and initial public offerings (IPOs). These investors tends to have no more than 75% stocks in their portoflio and no less than 25% bonds. Defensive investors tend to limit their portfolio to 10-30 stocks that have all paid dividends for at least a few decades. On the flip side, enterprising investors are out for growth. They are riskier investors seeking diamonds in the rough that could catapult their portfolio and pockets. They tend to have portfolios with at least 75% stocks and no more than 25% bonds.
Graham also speaks on advisers and their roles as compared to the every day investor who takes his or her portfolio upon himself or herself. Fundamental analysis is touched upon and the processes for choosing stocks for the two types of investors.
One Up on Wall Street: How to Use What You Already Know to Make Money in the Market
Author: Peter Lynch
An investor's classic by former Fidelity Magellan fund manager Peter Lynch. In thie piece, Mr. Lych covers a vast array of investing basics and splits his topics up into three (3) different groups: Preparing to Invest, Picking Winners, and The Long-Term View. He gives insight as to why just because one stock's price is increasing or has a higher value, doesn't necessarily mean it's a better stock.
Mr Lynch even goes into more detail about stocks and classifies them into six (6) categories: Slow Movers, Fast Movers, Turnarounds, Cyclicals, Stalwarts, and Asset Plays. He harps on earnings and how using a stocks' P/E (price-to-earnings) ratios can aid in your investment tactics. Learn what a P/E ratio is, how it can be manipulated, as well as the five (5) ways companies can increases their earnings and it's effects on their P/E values.
One thing we weren't too keen on is his viewpoint on Options. Yes, they are riskier than stocks, but are a great tool for investors with smaller capital that are looking for quicker returns. One must make sure his/her strategy is sound though. "Only invest what you can afford to lose." - Peter Lynch. The book can be picked up at your local bookstore or online.
The Trader’s Guide to Key Economic Indicators
Author: Richard Yamarone
This is a great book whether you are a novice investor or have been trading for some time. Understanding what information drives markets can help you make better trading decisions. This book introduces and explains important topics that provide signals about the condition of the market.
Key indicators, such as gross domestic product (GDP) which measures a nation’s economic output and performance, and consumer price index (CPI) which tracks the changes in price of typical household items, can point to changes in business cycles, inflation, or the overall economic health of a country. When this data is released investors make decisions according to how their expectations for the market were met or missed. Therefore, understanding what indicators to watch for and how they impact the market is a basic foundation that every investor needs. This book is a great way to build that knowledge.
The book can be picked up at your local bookstore or online.
Rich Woman: A Book on Investing for Women
Author: Kim Kiyosaki (wife of Robert Kiyosaki, author of Rich Dad, Poor Dad)
This one is for the ladies. Kim Kiyosaki uses Rich Woman as a way to introduce women to financial freedom (wealth) by investing.Kim Kiyosaki got straight to the point with Rich Woman: A Book of Investing for Women.
She got started because her mantra is, "Because I hate being told what to do!" The book is written moreso in a story telling form as many of hte dialogue is between her and her girlfriends. But, she uses their lives, as well as her own, for teaching points for all women. She makes it known that the investing rules are the same for men and women. Money isn't gender specific. Since, 50% of marriages end in divorce, she is simply stating that women need to have something of their own. Even if your relationship is flourishing, a woman shouldn't depend on a man for financial support, but he can provide emotional support. Each party should compliment the other and both should be able to flourish together.
You'll have to read this piece to see what her 6 reasons why women should invest are as well as the difference between cash flow and capital gains. The biggest step to overcome to achieve either is getting over the fear of investing.
The book can be found as an audio CD or as a hardcopy.
Consider Your Options: Get the Most From Your Equity Compensation
Author: Kaye A. Thomas
Kaye A. Thomas uses this piece to discuss stocks and stock options dynamics within employer related programs. Many companies that are publicly traded, offer stock or stock option programs. This is a supplement to any retirement programs they may offer such as a 401k. In essence, the company tells the empoyee they have a stock on an exchange and he or she is able to purchase some of that stock through the company at a discounted price.
For example, if Black Market Exchange were listed on the New York Stock Exchange at a current price of $100 per share, we could offer those shares of stock at a discount of let's say 15%. That means the employee is able to purchase shares of a $100 stock for only $85, automatically resulting in a $15 profit per share. The stock option process works the same way, but in regards to options.
Options simply mean you buy rights to buy a stock, but don't actually buy the stock. So if the stock is worth $100 per share, you can own a stock options with a price of $75 per share which means you have the right to buy the stock at $75 and may sell at current market value ($100).
Usually, options come with a premium since they are so favorable. So let's say you want to buy the stock at $75 per share, well your stock options premium may be $1 per share which means you would actually pay $76 per share for a stock that is worth $100.
This piece covers all the above plus more as it pertains to specific stock options and how to claim capital gains on your taxes. This book may be found online or at your local bookstore.
Stock Options: Work 1/2 Hour A Day
Author: Dr. Harsimran Singh, Ph.D.
Stock Options by Dr. Singh is a great book for those looking to dabble in options. Options give investors the right, but not obligation to buy stock if they so choose.
Dr. Singh covers options basics, how they get their premiums and other factors that can help you undertand options as an investment strategy. Concepts such as discipline, the greeks, time and instrinsic values, as well as how stocks compare to options in the market. Learn why options are a great investment tool because they require little money to start and have tremendous upside in comparison to tradition stocks, particularly when it comes to turn around time for profits.
Read this piece today if options have struck your interest and learn the several different strategies to make you money. The book is also available online or at your local bookstore in hardcopy format.
Social Media Strategies for Investing
Author: Brian D. Egger
This is a great read, especially for new investors who feel intimidated by all the investment research outlets out there in the world. Egger not only writes on all social platforms from social networking to financial blogs to financial websites. Platforms covered in depth include Twitter, StockTwits, Yahoo Finance, Google Finance, Seeking Alpha, and much more.
This book serves as a manual for mastering the social aspect of investing, but also leveraging that that same information to recognize trends and develop into a sound investor. You don't have to use every outlet mentioned, but there are definitely plenty to choose from with detail instructions on their pros and cons. Effers even gives a couple case scenarios at the end showing how he uses multiple outlets at one.
At the end there's an appendix which includes a table broken down into the following categories: platform, web address, type of platform, and what chapter(s) the platform is referenced in. The book is also available online or at your local bookstore in hardcopy format.
Investing 101: A Crash Course for Building Personal Wealth
Author: Michele Cagan, CPA
This is one of the best guide and reference books out there, period. Every topic you can think is covered from stocks and bonds to real estate and retirement planning. Although some topics are covered more than others, every investment topic under the sun is pretty much covered for the beginning investor. If you want to simply know the who, what, where, when, why, and how type answers, then this book has got you covered.
There are 10 chapters which have different themes:
1. Basic Economics - Covers the principle of supply and demand as well as common economic indicators like Gross Domestic Product (GDP) and Consumer Price Index (CPI).
2. What are Stocks? - Everything from stocks themselve and exchanges to dividends to penny stocks.
3. Bonds, Mutual Funds, & ETFs - What interest rates are and what are the differences between mutual funds and ETFs.
4. Styles of Investing - How does value investing compared to growth investing in regards to fundamental analysis. Trading and technical analysis is also covered.
5. Investing in Real Estate - The pros and cons as well as how to leverage real estate with REITs.
6. Currency & Commodity Trading - Explains forex and precious metals as investments.
7. Education & Retirement Planning - Explains the differences between 529 Plans, a 401(k), and an IRA.
8. Socially Responsible Investing - Talks about what it means to Invest with moral responsibility.
9. Your Investment Portfolio - Elaborates on risk and finding your investor profile. Also touches on diversification.
10. Advice from the Pros - Tips from some of the greatest investors of all-time like Warrent Buffett and the above mention Benjamin Graham (see The Intelligent Investor review above).
All of the above is covered and more in under 250 pages and broken up into divisions with subdivisions within them.
Warren Buffett and the Interpretation of Financial Statements
Authors: Mary Buffett & David Clark
This book is essential to understanding the three main financial sheets in business. It's actually more of an accounting book than an investment book. The three main financial documents are:
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
This book literally breaks down every line item in each document in its own 2-4 page chapter. Digestible info in under 200 pages PLUS examples that Buffett lives by. Not only does it go through each aspect of each document, but also gives tips and values as to what Buffett looks for with each line item.
The main takeaway from the book is investing in companies with a durable competitive advantage over its competitors. This applies to private and public companies. Another interesting trick is that Buffett calls his stocks "equity bonds" and that he treats his stocks like bonds by investing using interest rate principles in conjunction with the financial documents. It's crazy yet genius how he buys something one year with expectations for it to be at a certain price in the next 10 to 20 years and once that time is up, his price point is in line with Wall Street analysts.
Great book not just for investors, but also business folks and entrepreneurs.
Growing Money: A Complete Investing Guide for Kids
Authors: Gail Karlitz and Debbie Honig
A great read on investing for children. It doesn't designate the age range to start, but I would recommend any child in the 5th grade and up can benefit from this book. The authors wrote it with direction towards children, not towards adults reading to thier children.
It covers everything from how the term "piggy bank" came about to stocks, bonds, and IPOs.
It has large font making the read go by extremely fast and even has a risk profile survey in there for your child to know what type of investor he or she wants to be.
Lastly, there are quizzes throughout to test your child's knowledge from the reading and other fun facts.
Trading for a Living: Psychology, Trading Tactics, Money Management
Author: Dr. Alexander Elder
Another book on trading and it does not disappoint. Dr. Elder is as straight an arrow as they come when to comes to talking about how psychology plays a role in trading, the simple tactics that you must never waver, and how to manage money like the professionals do when it comes to trading the markets.
Similar to The Complete TurtleTrader, trading trends can be an extremely important piece when getting into the fast-paced world of trading.