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How to profit from shares
The best books on investing
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A great way of improving your investment skills is to read the thoughts of others. The investment scene is littered with books that outline the stock picking principles behind many legendary stock pickers. While by no means covering every single publication, this feature will help narrow down the field for the Foolish stock picker.
However, a word of warning. Any book, regardless of who wrote it, should not be viewed as gospel. Unfortunately, there's never been an author yet who has distilled a winning stock picking strategy into an easy-to-replicate formula. Books ought to help form a foundation for personal investing guidelines, but nothing more. One other point to note is that the best books are often directed at a US audience. While the important philosophy parts should be readily understandable, UK readers will have to put up with dollar signs and the odd unfamiliar company name.
Beginners
For beginners, there's no better book to get started with than Peter Lynch's One Up On Wall Street. The real beauty of Lynch's book is the easy-going review of the simplistic stock picking style that brought him so much success at US fund managers Fidelity. Low on number crunching but high on anecdotal stories, readers are given a clear picture on how to get off to a good start in the markets.
Buffett
You're spoilt for choice for books about investor Warren Buffett. Unfortunately, the man himself has never summarised his investment secrets in a step-by-step guide. But that's not stopped many others from looking at his investment record and trying to formulate his approach.
But while books such as The Warren Buffett Way and Buffettology give excellent primers on Buffett and his investment philosophy, they mostly lose out on the "how to" part. It's also worth pointing out that most books about Buffett focus on his most famous long-term investments, Coca-Cola, Gillette, and so on. And although it's true to say that those "business franchises" have generated most of Buffett's common stock success, this analysis discovered that Buffett's most frequent type of investment was in more ordinary of companies.
However, one useful Buffett book is the Warren Buffet Portfolio. The book concentrates on Buffett's investment style rather than attempting to dig into his stock picking secrets. But of course, the best way to learn from Buffett is direct from the man himself. It's worth visiting his Berkshire Hathaway website to read his Shareholders' Letters, which are all available for free. Alternatively, consider the Essays of Warren Buffett. This is a user-friendly version of Buffett's Letters, it being a book that has rearranged his thoughts into subject order.
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