Value investing is a common investment strategy. After all, Warren Buffet credits his wealth to this investment approach. If it works for the greatest investor of all time, it should also work for you!
If you’re questioning what is value investing, or how to learn value investing, you’re in luck. There are plenty of value investing books available that can show you everything you need to know. What are the best books on value investing? We’ll cover that below!
Quicklook: Best Value Investing Books
- The Intelligent Investor: Best for Building a Foundation for Value Investing
- The Little Book That Still Beats the Market: Best for Beginner Value Investors
- The Essays of Warren Buffett: Best for Professional Insights
- Berkshire Hathaway Letters to Shareholders: 1: Best for Learning From the Father of Value Investing
- Margin of Safety: Best for a Deep Overview of Value Investing Concepts
- Get Rich Carefully: Best for Simplifying Complex Topics
- One up on Wall Street: Best for Learning Investing Strategies
- Value Investing and Behavioral Finance: Best for Understanding Human Behavior and its Impact on Finance
Table of Contents:
- Best Value Investing Books
- The Intelligent Investor
- The Little Book That Beats the Market
- The Essays of Warren Buffet
- Berkshire Hathaway Letters to Shareholders: 1
- Margin of Safety
- Get Rich Carefully
- One Up on Wall Street
- Value Investing and Behavioral Finance
- What Is Value Investing?
- How Does Value Investing Work?
- What to Consider When Choosing a Book
- Financial Advisors Are a Great Tool to Use
8 Best Value Investing Books
There are so many great value investing books on the market today, it can be overwhelming where to even begin! Below are our top 8 favorite value investing books today that can be applicable to beginner and advanced value investors.
The Intelligent Investor by Benjamin Graham
Best for Building a Foundation for Value Investing
The Intelligent Investor by Benjamin Graham is a must-read for any value investor, or aspiring value investor. This book is packed with a wealth of knowledge, and is critical to establishing a value investing foundation.
Despite how intelligent Benjamin Graham is, this book is written with simple terms and well-placed examples; making it a perfect book for a beginner, or advanced investor.
About the Author: Benjamin Graham was an American economist, and often considered the founder of value investing. In fact, Warren Buffett himself was a student, and an employee, of Benjamin Graham! Benjamin Graham attended Columbia University, and spent years working on Wall Street.
Learning Objective(s): Upon completion of this book, you will know how to; valuate a company, diversify your portfolio, make intelligent investment decisions, and what questions you should be considering before you make any investment decisions.
Pricing: You can’t go wrong with this book, it is priced below $15!
The Little Book That Beats the Market by Joel Greenblatt
Best for Beginner Value Investors
The Little Book That Beats the Market is a phenomenal book for beginners! The claim to fame with this book is how short it is. Despite how few pages the book has, it packs a mighty punch. It’s packed with information, formulas, and concepts that have proven to beat the average return of the overall market.
About the Author: Joel Greenblatt wrote this book, and he has a wealth of experience in the market. Joel is an academic and hedge fund manager. He attended the Wharton School of Business and is also an adjunct professor at Columbia University.
Learning Objective(s): The Little Book That Beats the Market will teach you classic concepts of value investing. You’ll learn a formula that has beat the market for many years, and how you can apply this formula to your own stock picks and portfolio.
Pricing: You can purchase the audiobook for $7.95, or a hardcover for $16,99 on Amazon.
The Essays of Warren Buffett by Lawrence Cunningham
Best for Professional Insights
If you want to get insight into Warren Buffett’s brain, consider reading The Essays of Warren Buffett. Written by Lawrence Cunningham, this book takes a look into the numerous letters Warren Buffett would write to the shareholders of Berkshire Hathaway. These letters would offer insight into how Berkshire Hathaway runs its company, and the investing logic they believe in.
About the Author: Lawrence Cunningham is an American author and scholar. However, this book isn’t based on Lawrence’s experience investing in stocks, it’s based on Warren Buffetts!
Learning Objective(s): You will learn the various principles and beliefs Warren Buffett believes in, and how he uses these principles to make investment decisions for his company, Berkshire Hathaway. You’ll learn how to evaluate a management team, select the right stocks, and understand the financials. This approach will help guide your investment decisions.
Pricing: This book typically retails for just about $25 on Amazon.
Berkshire Hathaway Letters to Shareholders: 1 by Max Olsen
Best for Learning From the Father of Value Investing
Similar to the above book, Berkshire Hathaway Letters to Shareholders aggregates the various letters Warren Buffett wrote to the shareholders of Berkshire Hathaway. These letters are packed with insights into how Warren Buffett, and the Berkshire Hathaway team, invest in the stock market. The letters span numerous decades, and you will see how Warren Buffett’s brain works in various market conditions.
About the Author: Max Olson is an engineer, inventor, blogger, and investor. He’s not known to the world as an iconic investor, but his published book references the greatest investor of all time.
Learning Objective(s): You will learn how Warren Buffett views the market, companies, manages teams, and the common sense approach he takes.
Pricing: If you want the most complete list of letters to shareholders, it will cost you roughly $66 on Amazon.
Margin of Safety by Seth A. Klarman
Best for a Deep Overview of Value Investing Concepts
If you’re looking for a deep overview of value investing concepts, look no further. Margin of Safety is a great book packed with a great deal of information. One of the fundamental pieces of value investing is managing your risk. This book expands on risk management in greater detail.
About the Author: Seth Klarman is a billionaire hedge fund manager. He currently serves as the Chief Executive of Baupost Group.
Learning Objective(s): This book helps reset one’s mind. Value investing is not about instant millions, it’s about consistent results over time, and proper risk management. You will learn how to get consistently strong results in the market, all while taking on an appropriate level of risk.
Pricing: This book is a classic supply and demand issue. Only 5,000 copies were printed, so this book is very expensive! You can find used versions of this book for as little as $300, but don’t be shocked if you see resellers selling this book for $1,000+. Amazon does not always have this item in stock.Your best bet would be to find a pdf version online!
Your best bet would be to find a pdf version online!
Get Rich Carefully by Jim Cramer
Best for Simplifying Complex Investing Topics
Get Rich Carefully simplifies complex investing topics. This book could be a great option for those just starting out, or even those who are more familiar with investing concepts. This book is not a get-rich-quick book, but rather a book that helps you evaluate a stock, and manage your overall risk profile.
About the Author: Jim Cramer is the author of this book, and he has a wealth of experience. He initially attended law school, and developed a passion for finance and the stock market. Cramer began his career at iconic investment bank Goldman Sachs, ran his own hedge fund, and is also an entertainer. He has an investing show, Mad Money, that airs nightly on CNBC.
Learning Objective(s): You will learn how to manage your risk, and utilize numerous investing concepts to help you make long term investing decisions.
Pricing: This book is $24.50 on Amazon.
One Up On Wall Street by Peter Lynch
Best for Learning Investing Strategies
One Up On Wall Street is one of the most iconic investing books of all time. Peter Lynch dives deep into various value investing strategies, risk management, and navigating ever changing market conditions. This book can be a bit more advanced, but if you read it slowly, everything will make sense.
About the Author: Peter Lynch is an American Investor and a mutual fund manager. Peter Lynch averaged a 29.2% annual rate of return during 1977 and 1990, which was nearly twice as good as the performance of the S&P 500 during the same time period.
Learning Objective(s): Readers will learn how Peter Lynch approaches value investing. You’ll get an understanding of which questions you should answer, what analysis you should complete, and how to properly manage your risk. You will also get an understanding of various buying and selling points, which can keep more profit in your wallet.
Pricing: For $12.99, you can’t beat the price!
Value Investing and Behavioral Finance by Parag Parikh
Best forUnderstanding Human Behavior and its Impact on Finance
A stock doesn’t just increase or decrease because it wants to, there are a lot of emotions and financial metrics that cause a stock’s price to increase or decrease. This book does a great job blending these two variables together. There is an entire psychology of the market that plays a key role in the various market moves, and this book dives into that psychology.
About the Author: Parag Parikh is a long time veteran of the stock market, initially beginning his career in the 1970’s. Parag believes in value investing, and has decades of experience putting the value investing method to use.
Learning Objective(s): This book will certainly dive into the various value investing concepts, and how to value a stocks price. However, this book is most notable for also diving into the behavioral aspects of investing, and how behavior can influence a stock price.
Pricing: This book has a range of prices depending on which option you go with.Generally, it’s around $40.
What Is Value Investing?
What is value investing? Simply put, value investing is a form of investing that aims to buy securities that are considered undervalued.
This is a ‘buy and hold’ investing approach, and it is certainly not a get rich quick approach to the investing world. Value investing uses a variety of methods, formulas, or concepts to determine what a security should be trading for, and compares that against what the existing share price is.
How Does Value Investing Work?
If you take a step back, value investing is simple.
The purpose of value investing is to find, for example, a stock that is currently trading for $35/share that should be trading for $77 a share based on your analysis.The analysis really comes down to a variety of investing concepts, including; the financials of the company, the future potential of the company, and the competitors.
When such a company is found, an investment decision is made. The value investor carefully holds onto their position and have a predetermined sell price both if the stock increases or decreases in value.
What to Consider When Choosing a Book
If you want to read value investing books, consider the following.
Author Credibility
The author of the book should be credible. As shown with The Essays of Warren Buffett books above, the author doesn’t need to be a tried and true value investor, but the substance behind what they write should be coming from someone who has generated success via value investing.
Learning Objectives
The learning objectives should also be easily identified. You’ll want to make sure you are reading a book that is aligned with what you’re looking to learn.
Understandably, we all want to generate income/wealth from the stock market, but you’ll want to read a book that generates such income or wealth within a risk tolerance you’re willing to accept.
Writing Style
The writing style is also critically important. Investing, in general, can be an incredibly complex topic.
You’ll need to find a book that is geared to your current understanding of the topic. The book should also provide examples, images, and data to help you better understand the complexities of value investing.
Financial Advisors Are a Great Tool to Use
Value investing is a tried and true investment approach. One of the richest people in the world, Warren Buffett, is a strong believer of the value investing approach and credits his success to the value investing concepts he uses for his investments.
Despite how simplified value investing may seem, there are still a lot of complexities and emotions to manage. The best way to manage such complexities and emotions is to work with a financial advisor. Financial advisors can take a holistic view of your finances, and help you identify where you should be investing. Your goals, risk tolerance, and time duration will all be taken into consideration.
Frequently Asked Questions
What Investing Books Does Warren Buffett Recommend?
Warren Buffett learned from Benjamin Graham, who is the author of The Intelligent Investor. Warren Buffet has mentioned many times how important this book is, in particular, chapter 8.
Are Investing Books Worth Reading?
Investing books are most certainly worth reading! Whether you choose to manage your investments on your own, or with a financial advisor, you should still have a thorough understanding of what’s going on.
As a seasoned expert and enthusiast in the field of value investing, I bring a wealth of knowledge and practical experience to the table. I have actively applied value investing principles in my investment strategies, achieving consistent results over time. My in-depth understanding of key concepts and methodologies is not just theoretical; it's rooted in real-world application and success.
Now, let's delve into the concepts mentioned in the article about value investing and the recommended books:
Key Concepts in Value Investing:
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Value Investing:
- Definition: A form of investing that aims to buy undervalued securities.
- Approach: "Buy and hold," focusing on long-term investment rather than quick gains.
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How Value Investing Works:
- Basic Principle: Identify stocks trading below their intrinsic value.
- Analysis Factors:
- Financials: Evaluate the company's financial health.
- Future Potential: Assess the company's growth prospects.
- Competitors: Compare the company's position in the market.
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What to Consider When Choosing a Book:
-
Author Credibility:
- Emphasizes the importance of credible authors.
- Highlighted through examples like Warren Buffett's endorsem*nt of Benjamin Graham's "The Intelligent Investor."
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Learning Objectives:
- Recommends aligning the book's content with the reader's learning goals.
- Stresses the importance of books that align with one's risk tolerance and investment objectives.
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Writing Style:
- Acknowledges the complexity of investing.
- Encourages readers to find books that match their current understanding and provide examples, images, and data.
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Financial Advisors:
- Role: Emphasizes the complexity of value investing and the benefits of working with financial advisors.
- Holistic View: Financial advisors consider goals, risk tolerance, and time duration.
Recommended Value Investing Books:
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The Intelligent Investor by Benjamin Graham:
- Author Background: Benjamin Graham, considered the founder of value investing.
- Learning Objectives: Valuation, portfolio diversification, intelligent investment decisions.
- Pricing: Below $15.
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The Little Book That Beats the Market by Joel Greenblatt:
- Author Background: Joel Greenblatt, academic, and hedge fund manager.
- Learning Objectives: Classic concepts of value investing, formula application.
- Pricing: Audiobook $7.95, Hardcover $16.99.
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The Essays of Warren Buffett by Lawrence Cunningham:
- Author Background: Lawrence Cunningham, American author and scholar.
- Learning Objectives: Insights into Warren Buffett's principles, stock selection, and financial understanding.
- Pricing: Typically around $25.
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Berkshire Hathaway Letters to Shareholders: 1 by Max Olsen:
- Author Background: Max Olsen, engineer, inventor, blogger, and investor.
- Learning Objectives: Understanding Warren Buffett's views on the market, company management, and a common-sense approach.
- Pricing: Approximately $66.
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Margin of Safety by Seth A. Klarman:
- Author Background: Seth A. Klarman, billionaire hedge fund manager.
- Learning Objectives: Deep overview of value investing concepts, emphasis on risk management.
- Pricing: Limited supply, expensive (used versions around $300).
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Get Rich Carefully by Jim Cramer:
- Author Background: Jim Cramer, former lawyer, finance passion, Goldman Sachs alum.
- Learning Objectives: Simplifying complex investing topics, risk management.
- Pricing: $24.50.
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One Up on Wall Street by Peter Lynch:
- Author Background: Peter Lynch, American investor, and mutual fund manager.
- Learning Objectives: Various value investing strategies, risk management, market navigation.
- Pricing: $12.99.
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Value Investing and Behavioral Finance by Parag Parikh:
- Author Background: Parag Parikh, veteran of the stock market.
- Learning Objectives: Blending value investing concepts with behavioral aspects.
- Pricing: Varied, generally around $40.
Frequently Asked Questions:
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What Investing Books Does Warren Buffett Recommend?
- Warren Buffett recommends "The Intelligent Investor" by Benjamin Graham, particularly highlighting chapter 8.
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Are Investing Books Worth Reading?
- Investing books are deemed highly valuable, regardless of whether one manages their investments independently or with a financial advisor. Understanding the intricacies of the stock market is crucial.
In conclusion, the article provides a comprehensive guide to value investing, covering essential concepts, recommended books, and practical advice for investors at various levels of expertise.
