Reading is one of the most important "tasks" for any investor.
I almost never remember the entire content of a book, but there's always a lesson that sticks with me for a long time.
Here's a list of 10 of my favorite books and the lesson I learned from them.
(1) Capital Returns by Edward Chancellor
- Lesson: Cyclical industries can be great to invest in when coupled with great management that understands their cycles.
(It's a bit expensive but worth it imho)
(2) Quality of Earnings by Thornton O'glove
- Lesson: Accounting can be pretty misleading. There's always a lot of noise in the financial statements, so we must adapt them to really understand how the business is doing.
(3) Capital Allocation by David Giroux
- Lesson: Good capital allocation can significantly augment investment returns, the same way that bad capital allocation can destroy them. It's all about opportunity cost.
(4) Expectations Investing by Michael Mauboussin
- Lesson: Investing is a game of expectations vs. reality. Find out what's baked into a stock and judge wether a company can beat it or not.
Led me to start looking at valuation through an inverse DCF.
(5) Flash Crash by Liam Vaughan
- Lesson: Fundamentals don't move stock prices over the short term. People who create these short term moves might not even know the industry where the company operates in.
Helped me to not care a thing about short term moves.
(6) When Genius Failed by Roger Lowenstein
- Lesson: Leverage and ego can kill your returns. EQ and humility matters more than IQ. As simple as this.
(7) Antifragile by Taleb
- Lesson: there are always unknown risks that are impossible to foresee (Black Swans), but antifragile companies can come out stronger from these.
(8) Built to Last by Jim Collins and Jerry Porras
- Lesson: Getting to be a great company is tough, but staying a great company is even tougher. When you have a lot to lose you can't become complacent.
Complacency is the #1 risk for any great company.
(9) Common Stocks and Uncommon Profits by Phil Fisher
- Lesson: There are few variables that really matter and one must remain contrarian if the thesis is intact.
(10) There's Always Something To Do by Christopher Risso-Gill
- Lesson: Opportunities are always present in the market, but only for the prepared mind that has done the homework in advance.