Books to Sharpen Your Investing Skills

 | May 14, 2013 | 2:00 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:






Just because the market is offering fewer and fewer attractive investment opportunities, that doesn't mean it's time for your brain to take a vacation. On the contrary, now is the time to keep the mind active in preparation for tomorrow's opportunities. And I don't mean by surfing the net, staring at headlines or the next stock tip.

Sometimes the best way is to let your mind relax and absorb the information without the minute-by-minute distractions of the ticker tape. So grab a chair and a cup of coffee or tea, and give these books a try.

An absolute must read is The Outsiders by William Thorndike. The book is powerful and won't bore you in the least if you are interested in learning about the greatest shareholder returns and how they were achieved. The answer, Thorndike suggests, is capital allocation. Thorndike opines that two companies that have the same operations yet different capital-allocation processes will have two vastly different returns.

The best part is that the book devotes each chapter to a company and the CEO behind it, so this is not an academic book but a real-life history of why names such as Teledyne (TDY), General Dynamics (GD), Capital Cities and others have been gangbuster investments.

Inside Apple by Adam Lashinsky is another great read, especially now, when everyone wants to know if Apple (AAPL) is a good investment. When you consider great companies such as Apple, it's important to know more than what you get in an annual report. Understanding the company's DNA, its culture and how it thinks about itself and the competition is vital information. This book is a great resource for that.

Clash of Cultures: Investment vs. Speculation by John Bogle is one I'm about to start. The single biggest error that I believe market participants make today is confusing an investment activity with a speculation. There are investors who make money, and there are speculators who make money. Conversely, both investors and speculators can lose money. I'm not defending one over other. What matters most is understanding the difference between the two. Making a speculative bet under the premise that it's an investment can be very expensive, and if you don't know you are doing that, you will repeat the mistake over and over.

Happy reading!

Columnist Conversations

Now that AAPL has violated the shorter term support, these are the two areas I have to consider for new buy en...
The symmetry is holding up in MCD.  Target 1 is 163.34 if we continue to hold above here!  ...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.