My last post (photos of recommended finance books)

Due to unforeseen circumstances beyond my control, which includes my new very busy business schedules, I regret to inform my readers that this might well be my last finance blog post.

For this last post, I will be posting the photos of my unblogged books that I have already read, as well as some comments about each of them. So here it goes:

1) Building financial models

This is quite an expensive book but well worth the price. This book is a comprehensive instructional manual on creating accurate financial projection models for financial statements.  I was actually able to use this for one of my MBA classes. Ublike textbooks, this book is much easier to read, but not that easy.

2) Benjamin Graham on Investing is another fine book about the father of investing. This book reminds us of the enduring and timeless lessons taught by Warren Buffett's mentor.

3) Philip Fisher is also one of the mentors of Warren Buffett who taught him more to look on the qualitative side of companies and not just the quantitative. Paths to Wealth through Common Stocks is Philip Fisher's classic book.

4) This is the latest book I have read and this is about the inside story of the collapse of Lehman Brothers, one of the most established and wealthiest financial firms in world history. In this book you will find answers as to what mistakes led to even the financial giant's downfall.



This are all the books I can recommend to you. I urge my readers to continue exploring the world of finance through books. Thank you all for taking time to read my blog.

Benjamin Graham: Building a Profession

About the book and its Contents:

This hardbound covered book is a compilation of Benjamin Graham's writings as a newspaper editor. It serves as a companion reader to his most popular work, Security Analysis.

The topics of his articles, as you may have guessed it, is about securities in general. It does not just talk about how to understand stocks and bonds but it also shows the reader how one must view them. One such example is he urges readers to view the stock not in terms of its balance sheet, but as an owner of the business.

Review

As a beginner, you won't get anything from this book. As an advanced learner of the teachings of Benjamin Graham though, you will learn a lot about his mindset by reading this book.

Difficulty Level = 3/5

To appreciate this book, one should at least be familiar with finance and stock markets.

Personal Rating = 4/5

This is one book that any serious long-term investor should have in his or her library.

 

Personal finance tip for today:

To be a truly successful investor, it is not enough that you know what strategies master investors use. It is more important to understand their own mindset as to what makes them employ such strategies. Adopting exactly the same investment strategies do not always work because personal and external situations vary widely.







36 Stratagems for Investors

About the book and its Contents:

A Wiley Investment Classic authored by HSBC Jintrust Fund Management, this book tries to apply old Chinese wisdom to modern investing strategies. It contains an application of 36 sayings that are translated into rational strategies.

One such example of a saying is " Repair The Walkway Openly But March Secretly to Chencang.". This is translated to 'Sieve Out Obscure Information in Reports.' This advice is very much applicable to investors.

Review

Difficulty Level = 1/5

For those who love strategy and want to combine it with investing, this is a nice book to read.

Personal Rating = 3.5/5

This is a fine book for basic investors and those working in the banking industry.

Personal finance tip for today:

For those who do not have time to invest in personal stock market trading, investing in bank products such as UITF and MF, is a logical choice. After all, you may be earning more by working as an employee instead of spending time monitoring your investments.

The Automatic Millionaire by David Bach

 

About the book and its Contents:

This book is by David Bach is one the simplest and most often overlooked book in stores that offers a stress-free and sure way to increase one's wealth.

The first few chapters talk about reviewing your expenses and cutting down on some of the unnecessary ones. The succeeding chapters talk about automating your investment program, which offers a lot of sense.

Review

Though this book gives a lot of banking options that apply only to the United States, the lessons being taught here, such as, finding and controlling your 'latte factor' are universal in nature, and can be applied by anyone.

Difficulty Level = 1/5

This is a very good book for beginners who do not have the time and mindset for studying finance.

Personal Rating = 5/5

This is an excellent book for busy employees and working professionals and those who are simply confounded by the very idea of high finance.

Personal finance tip for today:

You do not need to be a finance graduate in order to invest and save for your future successfully.  Instead, you can opt for an automatic program wherein a portion of your net income is automatically deducted from your payslip and placed either in savings or investments. That way, you can only maximize or make use of the money you can spend. It's easier than trying to curb your expenses first then save after. 

Even Buffett Isn't Perfect

About the book and its Contents:

This book certainly raises a lot of eyebrows since a lot of people, myself included, admire Warren Buffett, arguably the greatest investor of our time.



The book itself contains only 10 chapters, which explain an investment strategy or characteristic unique to Buffett.

Review

After reading this book, you will appreciate that some of Buffett's strategies for investing won't work for the small investor. For instance, Buffett prefers to focus instead of diversify. For him, this works fine, but the same strategy may not work at all for another investor. 

Difficulty Level = 3/5

This is good for readers who already understand how Warren Buffett thinks and acts. 

Personal Rating = 3.5/5

This is a short book that focuses more on clarifying Buffett's strategies and relating it to the ordinary investor. If you want to learn more about investing in general, one should instead browse from my other recommended books.

Personal finance tip for today:


An investment is an investment when you bought it at a value and not when you bought it expensively and sold it even more expensively. The latter is deemed as speculation.

A Random Walk Down Wall Street

About the book and its Contents:

This is another informative book about finance that states that the best way is to invest in equity index funds instead of actively managed mutual or investment trust funds.

The first chapters explain what is the meaning of Random Walk, as well as the financial manias and bubbles that transpired long ago. The second part discusses in detail the strengths and weaknesses of both technical and fundamental analysis. The Third part discusses the more modern academic theories on investing, which include the Modern Portfolio Theory and the Efficient Market Theory. The last part provides guidance for those who will take the path of 'random walkers,' and includes a chapter about the life cycle guide to investing.

Review

This book provides an excellent argument on why index funds are a better choice than the actively managed funds which may employ technical analysis, fundamental analysis, efficient markets theory, and others.

Difficulty Level = 2.5/5

This book is best read by those who have a more advanced understanding and appreciation of finance and investing knowledge.

Personal Rating = 4.5/5

Personal finance tip for today:
There are pros and cons between choosing an actively managed mutual fund or UITF, and an index fund. There are endless debates over which is better than the other. But before you join in on the argument, it is best to ask first, does investing in equities fit my investment objectives in life?

Money Masters of Our Time

About the book and its Contents:

There are currently a lot of financial planners, advisers, and fund managers in the market nowadays. However, there are only a few who are truly deserving of being considered a Money Master.

This book by John Train, devotes a chapter to each renowned investor or fund manager out there. I will mention only some of them: Georgoe Soros, Richard Rainwater, and Ralph Wanger.

Review

This is an excellent book because it discusses the investment strategy and philosophy of every money master in a fair amount of detail.Unlike other books that  are devoted to only one investor, this book is more diversified.  

Difficulty Level = 3/5

This book is more of a short biography of each master investor or money master. However, to best appreciate this book, it is best to have a fair knowledge of financial terms, like bonds, stocks, credit rating, etc.

Personal Rating = 4/5

This is a good  book to read if you're looking for the investment strategy that best suits your style.

Personal finance tip for today:

Master Investors do not become successful because they copied and pasted someone else's successful investment strategy. Instead, they studied from others and from there, created their own unique investment style.

 

Irrational Exuberance

About the book and its Contents:

Each of us tends to be irrationally exuberant whenever we get to ride the stock market or any asset market all the way to their new all-time-highs.  This book by Robert Shiller, explores the various factors (psychological, cultural, social, political, theoretical) that affect the stock market and the real estate market, throughout history.

Review

In this book, you will learn a lot about the past and prevailing theories about how stock market booms form, and go bust.

Difficulty Level = 2.5/5

It is a moderately challenging read, not because of the financial jargon, but because of its specialized nature and writing style of the author.

Personal Rating = 4/5

It is a good book to read for learning more about the factors affecting the stock market and real estate market.

Personal finance tip for today:

Warren Buffett's words of wisdom " Be fearful when others are greedy; Be greedy when others are fearful."

Devil Take The Hindmost

About the book and its Contents:

If you've watched Wall Street: Money Never Sleeps, then you should recall Michael Douglas mentioning something about the Tulip Mania, a financial bubble that occurred around the year 1637.
This book, Devil Take The Hindmost, talks about the history of financial speculation, starting from the 1600s all the way to the present. He provides a detailed story and analysis of each mania or bubble that occurred in the past.

Review

This is a very interesting book that is quite fun to read too because it talks about events that really happened in the past, and shows mistakes that tend to repeat themselves over and over. Even business schools rarely talk about this subject matter, when in fact this should be given a lot of attention as well.

Difficulty Level = 2/5

This is just like reading a history book, the only difference is that there are no exams that require you to memorize facts and details. The only exam you will have is when you start to apply your learning in real-life.

Personal Rating = 5/5

This is one book that every investor must have and read.

Personal finance tip for today:


History does repeat itself, not exactly, but similarly. Hence, it's best to learn from others who have made their financial mistakes so that you can avoid repeating them.

Damn Right! Behind the Scenes..

About the book and its Contents:

Many books are written about Warren Buffett, but there are very few, perhaps only one book, that talks about his sidekick, Charlie Munger. If there are a lot of things you can learn about Warren Buffett, there are certainly things you can also learn from the wisdom of his sidekick. In this book, you will get to understand how Mr.Munger became Warren Buffett's right-hand man and how he has influenced the latter's investment philosophy.

Review

This is a one-of-a kind book that talks about a rarely talked about figure. A must read.

Difficulty Level = 2/5

This is more of a biography but one will certainly glean a lot of finance knowledge from this.

Personal Rating = 5/5

This is one book that you must have and read.

Personal finance tip for today:


Even master investors were students once and learned from other master investors. Spend time and money to learn, not just from seminars, but also from books. Books may not bring you money directly, but they will improve your skills, which in turn will help you earn more.

Snowball: Warren Buffett and The Business of Life

About the book and its Contents:

Snowball is probably the latest and most comprehensive biography made about Warren Buffett, one of the most successful and wealthiest investors in the world.

Almost a thousand pages thick, this extensive biography begins with the history of Warren Buffett's family (his parents and siblings), moves on to his childhood years, school years, married life, investment and business decisions, and ends with his latest business and personal life update.

Review

For those who are truly interested in knowing the factors that helped shape Warren Buffett and his principles to date, this is one book you must have and read thoroughly.

It certainly would give light to any misconception readers and fans may have had with reading some articles about him.

 

 

Difficulty Level = 2/5

Though the book is thick, it is easy to read, provided you're interested in reading biographies.

Personal Rating = 5/5

Personal finance tip for today:
Just as a snowball gets more powerful the longer it rolls down the hill, the same can be said with the power of compounding. Make sure that you make use of compounding in investing and not let compounding work against you.

Stocks For The Long Run

About the book and its Contents:

This wonderful 380 page hardbound book is about the power of stocks in the long-run is written by Jeremy Siegel, a Professor of Finance at The Wharton School of the Univesity of Pennsylvania.
In one chapter, it discusses the long history of the S&P Index and its historical performance. In another chapter, it discusses how other investment vehicles such as gold and treasury bills have performed against stocks. But in essence, this book is about persuading the reader that stocks have, in the long-run, have outperformed other investment options.

Review

This book will let you appreciate the power and value of investing in stocks for the long-term. This book is not meant for short-term traders.

Difficulty Level = 2/5

Although 380 pages long, this is a somewhat easy read.

Personal Rating = 5/5

This is an excellent book that bases its analyses on factual historical data. If you want to learn more about stocks, especially US stocks, then this is it.

Personal finance tip for today:

Although stocks do indeed outperform other investments in the long-run, it is not a good idea to place all your money in stocks, especially if you plan to use part of that money in the short to medium term.
The amount you place will depend on many factors, which include: your appetite for risk, financial situation, expected needs, and many more.

The Financial Times Guide to Investing

About the book and its Contents:

This is a comprehensive book that covers: investment basics; the various investment vehicles/options; company analysis; and portfolio management.





To be more specific, it explains the difference between investment and speculation; how the stock market works; how accounting is used by companies in real life, and taxes.

Review

 

This is indeed a definitive companion. While it is not as definitive as a finance encyclopedia or dictionary, this is much more interesting to read. 

 

Difficulty Level = 1/5

 

This book is meant for novices in finance as well as for those who want to be more professional in their level of knowledge.

 

Personal Rating = 4/5

This is one book that you can keep for a long time.


Personal finance tip for today:

An investment differs from a speculation in that an investment is based on sound judgment, research based on facts, and is normally long-term. A speculation on the other hand, is based on a hunch and is normally short-term in nature.

Why We Want You To Be Rich

About the book and its Contents:

As the title goes, this book should answer why the authors want you to be rich. There are several questions posed to the authors, namely Donald Trump and Robert Kiyosaki. Each of them then provide their own answers to those questions.

Review

For me, this is one book I learned very little from and is quite a disappointment. This is more a question and answer biography instead of a book that provides brilliant advice on how to become financially successful. I suggest you read other books from different authors instead.

Difficulty Level = 1/5

 

This is easy to read but.

 

Personal Rating = 1/5

You will not learn a thing from this book.


Personal finance tip for today:

It is easy to say that one must save at least a big portion of one's monthly income for savings. The difficult thing for most people is how to implement it. There are certainly a lot of things that we want in life or 'need', which our incomes cannot always satisfy. With that in mind, we have to practice sacrifice and budgeting. We need to sacrifice some wants so that we can enjoy life after retirement. Before making any major purchase, check out other customer reviews and alternative products.  

The Dhandho Investor

About the book and its Contents



Dhandho (pronounced as dhun-doe) is said to mean 'endeavors that create wealth.' In this book, Mohnish Pabrai, shares his accumulated investment knowledge and lessons to his readers. He also  believes that it is indeed possible (but difficult) to find high returns using a low-risk value method. This method he developed was patterned after Warren Buffett's early business partnerships and has earned outstanding annual returns for his investors in the Pabrai funds.

Review

This 200 page book provides an explanation of the Dhandho Framework as well as real-life examples of Dhandho investors. Furthermore, the author does a good job of keeping his explanations simple and understandable. In providing examples, he uses basic math and probabilities. In addition, his investing lessons are worded not in generic terms but in more specific jargon. An example of this is: "Dhandho 201: Invest in Distressed Businesses in Distressed Industries" instead of saying 'find businesses that offer good value.'

Difficulty Level = 2/5

Personal Rating = =4.5/5

This is a book worth reading and ordering from Amazon (if you fail to find it in our local bookstores).


Personal finance tip for today:

To succeed in investing, it is not enough that you buy a so called investment. You must purchase that investment at a bargain value. By bargain I mean that you bought a really valuable asset at a good price that benefits you more. In other words, you were able to buy gold at the price of silver. If you bought your gold at the price of diamonds, then it is very difficult for that investment of yours to go up in value. 

Investing The Templeton Way

About the book and its Contents

Sir John Templeton (he was knighted), was one of the most successful and charitable billionaires, until he passed away in 2008. He founded the now famous Templeton Funds and pioneered mutual funds that were globally diversified.


In this book, he shares some practical advice on fundamental investing and adopts a contrarian view. In other words, he does not go with the crowd. One of his most famous quotes are: 'Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.'

Review

This book contains chapters about the legendary bargain hunter's investments in the past that have made him successful as well as provides lessons that apply even today. He also provides some guidelines as to when he considers it a good time to buy and to sell.

Difficulty Level = 3/5

This book is not about technical stuff. However, to appreciate the work, you should know at least a bit about the stock market. 

Personal Rating = 5/5

This is probably the only resource book that is available about the legendary bargain hunter, Sir John Templeton. Readers will certainly benefit a lot from his experience and knowledge.


Personal finance tip for today:

Although it may sound like cliche, don't put all your eggs in one basket. Since no one can predict the future direction of any type of investment accurately and consistently,  it would indeed be wise to place your money in investments that do not have a positive correlation.

Stock Valuation

About the book and its Contents

A 360 page work, Stock Valuation is definitely one of the most essential books you will need to understand how to know how much a company is worth. 

Review

This is one book I've learned a lot from. It teaches you everything you need to come up with a valuation of the company (not a simple task). Firstly, it will give you an orientation of the investment and finance market. Secondly, it will discuss the time value of money. Thirdly, it will teach you how to interpret and analyze systematically a company's financial statements. Fourthly, it will teach you how to compute for a company's cost of capital. Finally, it will teach you several valuation models, one of which is the discounted cash flow model.

Difficulty Level = 4/5

If you aren't interested in how to compute for a company's net worth (a must if you truly want to be a long-term investor), then you might not want to invest in this book, yet. However, if you truly want to learn and gain a new edge, then studying this book, even slowly, will reap rewards.

Personal Rating = 5/5

Although a bit more expensive than the usual investment books, this is worth the knowledge you will uncover.


Personal finance tip for today:

Having the mindset on how to manage money is very important. Even if you have little money but know how to manage it, then you will have a comfortable life. However, if you have a lot of money, but do not know how to properly utilize it, then you will end up losing that wealth and keep looking for more and more.


Recommended link:

Applied Equity Analysis

About the book and its Contents

Spanning 420 pages, Applied Equity Analysis is one of the most expensive finance books I have ever invested in a few years back. It is also a very highly advanced work which requires a fair amount of knowledge in finance. You do not however, need to be a stock trader working in a stock brokerage firm to understand the chapters.

The first chapter gives an introduction to the life of an equity analyst. the fundamentals of stock behavior and some frameworks for understanding the firm's business environment. The second part of the book expounds on the tools you will need such as reading financial statements. The third part discusses financial modeling, The last parts end with the discussion on equity valuation and the writing down of the report.

Review

There is a great amount of knowledge that can be obtained from this work. Furthermore, this book is done with a more practical teaching approach instead of an entirely theoretical one. It contains many real-life examples of companies listed in the U.S. It also contains a lot of charts and formulas. The only thing lacking with this work however is that it does not teach you how to encode the formulas in Microsoft Excel. The reader should be the one to find a way on how to incorporate it for his own use.

Difficulty Level = 4/5

This work is suitable for those with advanced knowledge in investments and finance.

Personal Rating = 4/5

Although quite expensive, this is one of the most authoritative reference books you can find in finance.



Personal finance tip for today:


Do not spend everything you earn as if the world will end tomorrow. What if the world didn't end and life continued to move on? How will you survive then? Regardless of how much you earn, you should allot a sizable percentage of your income to your personal savings. Having a pool of savings to sustain you in times of need reduces a lot of stress.


Recommended link:

Rich Dad's Guide to Investing

About the book and its Contents

This 406 page book is Robert Kiyosaki's guide to investing, which are advice passed on to him by his 'rich dad'. The first chapter is an introduction asking the reader if he or she is prepared to be an investor? The second chapter discusses what are his or her investment options available. Most of the succeeding chapters offer valuable investment lessons. The last remaining chapters focus on the categories of investors (of their various levels).

Review

Many of the lessons being taught in this book make sense. But I feel that this is more of an introduction and mental preparation for other books that offer greater details on the actual investments you can choose from.



In essence however, this book encourages you to invest in your own business and have it publicly listed. The book gives you some mental aspects you need to have in order to have better chances of succeeding. 

Difficulty Level = 1/5

If you've had an easy time reading Rich Dad Poor Dad, you will find this book easy to read, although a bit more challenging.

Personal Rating = 1/5

To know more about where the middle class and poor should invest in, other investment books are recommended.



Personal finance tip for today:

Controlling expenses can be difficult if you cannot differentiate between what you really need and what you really want at the moment. Hence, you must learn to delay gratification to save more. It doesn't mean however, that you should have zero gratification.




Recommended links:

Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!

Before You Quit Your Job

About the book and its Contents

This 260 page book is authored by the popular Robert Kiyosaki, best known for his work Rich Dad, Poor Dad. This book gives 10 lessons packed in 10 chapters, which talk about the kinds of money, the differences between an entrepreneur and employee, as well as the differences between school smarts and street smarts.

Review

This book does teach you some important lessons you will need before you quit your job and start a business. However, it seems to downplay the risks involved in doing so. Or at least it encourages you to take more risk than what is in your comfort zone. This book is also not about how to create a successful feasibility plan for business as the lessons are not organized properly. 

Difficulty Level = 1/5

This is an easy to read book but I find that the lessons being taught are inadequate and a bit generic.

Personal Rating = 2/5

Before you quit your job, I suggest you read a more serious book about starting your own business. It would be unwise to risk your relatively stable job if you do not have a good business plan and a backup plan in case the assumptions go wrong.



Personal finance tip for today:


Even if you have a stable job, it is always best to store a cash balance of at least 3 months' worth of monthly expenses. You never know when a disaster or emergency might strike and need hard cold cash.




Recommended links:

The Citibank Guide to Building Personal Wealth

About the book and its Contents

This 240 page work was made by Citibank, not just for its clientele but for any interested reader, particularly those based in the Asia Pacific region. The first chapter discusses the creation of wealth for the long-term. The second chapter is a discussion of the financial life stages and how these change as one gets older. The succeeding chapters provide a glimpse and elaboration on most bank products/services.

Review

This is one of the first personal finance books I have read and I found it to be quite interesting. It is easy to read and it gave a lot of case examples to explain the concepts.

Difficulty Level = 1/5

This is another easy read. 

Personal Rating = 5/5

For those who want to to understand a little more about bank products such as bonds and stocks, as well as collective investments (e.g. UITF, mutual funds), then this is a book you should start reading.


Personal finance tip for today:

Start saving while you are earning. Do not wait for your salary to reach a certain point or to someday win the lottery. Someday, you will need to rely on your accumulated savings. It can come much sooner than you expect.

Recommended links:

Wealth Within Your Reach, Pera Mo, Palaguin Mo!

About the book and its Contents

This 200+ page book is one of the simplest and most understandable works you can buy in the bookstore. Each of the chapters are discussed in both English and Filipino and focuses on the basics. It first narrates a story of a success turned failure; then it discusses the financial life stages; reasons to understand personal finance; financial independence; its obstacles and allies, and many more. The second part explains several commandments that you must follow in order to reach your personal finance success. 

Review

For those who are intimidated by a combination of the English language and any financial jargon, this is the book that you must buy. If you are interested in the basics only, then this is the only book that you will need to hold and remember.

Difficulty Level = 1/5

This is a very easy read. You can finish it in less than a day, if you devote enough time for it.

Personal Rating = 5/5

The topic of personal finance is very much simplified in this book.



Personal finance tip for today:

Though buying books costs money and does not bring you back money directly, it does however, improve your skills and knowledge, which can help you spot and utilize opportunities for greater income.


Recommended links:

Wealth Within Your Reach; Pera Mo, Palaguin Mo!

Why Smart People Make Big Money Mistakes and How to Correct Them

About the book

Ranging around 200 pages, this book is an application of behavioral science theories in relation to why people make mistakes when it comes to finance and investing.

Contents

Several theories are discussed in great detail in the book. These include: mental accounting, loss aversion, sunk cost fallacy, status quo bias, endowment effect, money illusion, bigness bias, anchoring, confirmation bias, overconfidence, and information cascades. The last chapter provides steps the reader can take to avoid those big mistakes and prevent losing money in the future.

Review

 

This is an easy-to-read and insightful book. Not only will you learn about mental behaviors that affect your finances; you will also learn how to spot if you have them, and what you can do to learn from them. 

Difficulty Level = 1/5

This is a good book for everyone interested in both finance and some psychology

Personal Rating = 5/5

 

This is a  highly recommended light reading


Personal finance tip for today:


There is no need to cut up your credit cards. To maximize your credit payment terms, make use of your card the day after the cut-off date. That way, the purchases will be included in the next cut-off instead, and you have a longer payment due date. Also make sure to always pay in full on or before due date. Interest from credit cards are very high.


Recommended links:

The Millionaire Next Door

About the book

These are the results of detailed studies and observations conducted by Thomas Stanley and William Danko, who both have doctoral degrees. Their study shows the surprising characteristics of a good number of American Millionaires. This book does not aim to make simple generalizations of ALL wealthy Americans but instead explains in detail a list of seven common behaviors or factors for a substantial number of them. 

Contents

The book discusses in detail the seven factors that made wealthy Americans into who they are now, financially speaking. Some of these include: 1) they live well below their means, 2) they believe that financial independence is more important than displaying high social status and; 3) they chose the right occupation. Each chapter provides detailed statistics, examples, and results of the surveys they have conducted, based on a representative sample size.

Review

 

While some behaviors described in the book may not fit or describe accurately the behaviors of other wealthy individuals, it does teach us the important characteristics or traits that have made a good number of people comfortably wealthy. It is up to the reader to decide if he or she is up to the task of applying the same principles in his or her life. 

Difficulty Level = 2/5

This is an easy-to-read work. It is not as difficult to read as compared to a dissertation or thesis.

Personal Rating = 4/5

 

If you are more interested in reading about real people successfully applying some of the personal financial planning concepts/tips, then you should read more about this book.


Personal finance tip for today:

To live below your means that you earn more than what you spend. This does not mean that you have to live miserably. It is all right to spend on some luxuries and enjoy life so long as you still save a substantial percentage of your income and not use up those savings. 



Recommended Links:

The Alchemy of Finance

About the book

This is one of another Wiley Investment Classics books on Investments. This 392 page work is written entirely by George Soros. For those who do not know him, he is one of the top investors in the world and also a billionaire. He is also proclaimed as 'The Man Who Moves Markets' because at one time, he made a billion dollars in gains by betting that the British pound would be devalued (and it did).

Contents

This book is separated into five parts. Part one discusses Soros' view on several theories, most notably on the Theory of Reflexivity, in the stock markets and in the currency markets. Part two focuses on Soros' views on several historical events, which include the international debt problem of America, and Reagan's 'Imperial Circle' among other things. Part three discusses Soros' personal experience and reflections regarding his Quantum Hedge Fund's performance starting from August 1985 and ending at November 1986. Part four meanwhile, is his evaluation of his performance. Finally, part five discusses Soros' own prescriptions between: free markets vs. regulation, an international central bank, systemic reform, and the market crash of 1987. 

Review

 

Soros is a brilliant thinker aside from being a successful investor and philantropist. His insights are profound and can be difficult to understand, due to the language he uses. It is much like reading a philosophy book, which it seems to be. It is an intense reflection on certain realities and experiences.

Difficulty Level = 5/5

This is a challenging book to understand. It will probably take more than one reading to understand his point of view.

Personal Rating = 3/5

 

Although a good book, investors who are at beginner's level should not read this book just yet. There are other works available that can offer more practical advice and tips.


Personal finance tip for today (new feature) 





Upon the suggestion of some readers, I will be inserting very simple and practical personal finance tips every time i make a book review, so as to spice up the blog. Here goes:


In order to save money faster, stop borrowing money with interest rates. Unlike a corporation, your interest expenses are not tax-deductible.



Related links:

When Genius Failed: The Rise and Fall of Long-Term Capital Management

About the book

This hard to find 2001 paperback edition narrates the story of a once-highly-successful but now inexistent hedge fund named Long-Term Capital Management. Written by Roger Lowenstein, a financial journalist known more for his books about legendary investor Warren Buffett, the 250+ page book is an exciting journey to the financial markets.

Contents

This work details the beginning of Long-Term Capital Management or LTCM, its great rise, its climactic event, its catastrophic collapse, and its epilogue. It mentions who were the hedge fund managers, their qualifications, how they behaved throughout the many market events, how they succeeded at first, and what fatal mistakes they made that eventually led to the downfall of LTCM.

Review

I will not mention what mistakes the managers made but I can assure those who will read the book, that the types of mistakes mentioned in it are still being made today by many people, and not just hedge fund managers. 

From the mistakes the hedge fund managers made, valuable lessons and insights can be gleamed. This book is a good read because it places the mistake made in its proper context or situation. 

Difficulty Level = 2/5

Since this work is in narrative form, it is easy and even entertaining to read. To further appreciate this work though, one should be at least familiar with financial jargon. It is not a work of fiction and all the facts are straight. 

Personal Rating = 4.5/5

This is a must read for those who want to know more about a real-life example of what the finance world is like, and how complicated the markets can be. 

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The Winning Investment Habits of Warren Buffett and George Soros

About the book

This 358 page work is authored by Mark Tier, an Australian writer and businessman who adopted the investment habits that he now shares through his book, and is now successfully earning from his investments.

Contents

The book is composed of two parts, namely: 1) The Winning Investment Habits of Warren Buffett and George Soros and; 2) Making the Habits Your Own. For the first part, the author first explains the power of mental habits as well as the seven deadly investment sins. The rest of the chapters are devoted to discussing each of the habits of the two aforementioned master investors. 

Review

This is a very insightful book if you want to know more about what behaviors made Buffett and Soros successful investors. While Warren Buffett is a success in long-term stock investing and Soros is a master in short-term foreign exchange trading, each of them has their own powerful investment habits that differ from one another. Another good thing about this book is after you have read it, you can answer a survey online and see how you fare against the master investors, in terms of how much successful investment habits you have ingrained. The online survey will also point out both your investment behavioral strengths and weaknesses. 

Difficulty Level = 2.5/5

This is a simple book to read and only has very few complex financial jargon.

Personal Rating = 4/5

This is a book that will get you involved and will give you something to reflect about your own investment behaviors. The online survey on discovering your investment personality is worth spending time on. 

Related links:

to discover your investment personality as compared to the master investors:

 http://marktier.com/Main/index.php

The Essays of Warren Buffett: Lessons for Corporate America

About the book

This is not precisely a book, but a compilation of all the essays written by Warren Buffett in his Berkshire Hathaway annual reports. The good thing about this work however, is that the author, Lawrence Cunningham, arranged the essays according to more organized subjects, as I will discuss in the Contents section. This book is also one of the standard textbooks in a course being taught at Cardozo Law School.

Contents

After the introduction and prologue, the book is arranged and separated into seven chapters that cover the topics of: corporate governance; corporate finance and investing; alternatives to common stock; common stock; mergers and acquisitions; accounting and valuation; and accounting policy and tax matters.  Several essays discuss each and every topic.

 

Review

Unlike works of fiction wherein one can summarize the story in just one sentence or paragraph, books on finance and investing are much harder to compress because they deal with various investment viewpoints. The good thing about finance books however, and particular this book, is that one gets to learn a lot of knowledge. This type of knowledge can be applied in the real world. 

Moving on, Warrren Buffett is able to explain his investment policies and decisions in a very conversational dialogue. You will not be faced with monologue while reading his essays. Many of his insights may go against the usual teachings of academe. However, his lessons are very much valuable, especially since he has a proven investment track record, by using the same principles that he espouses. 

Difficulty Level = 2.0/5

Most of the essays were written for the benefit of the shareholders of Berkshire Hathaway. Hence, it is very understandable. Comprehension of some of the terms that Buffett uses however, may require more repetition in order to better know their true meaning. 

Personal Rating = 5/5

This is a must read for anyone interested about Warren Buffett and his fundamental investment methods and business viewpoints.

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How to Think Like Benjamin Graham and Invest Like Warren Buffett

About the book

This is another fine work by author Lawrence Cunningham, who is well-known for his books about Warren Buffett. The title also speaks for itself. It teaches the reader about the investment philosophy of both Benjamin Graham and Mr. Buffett, both brilliant investors.

Contents

Spanning 268 pages, the book is made up of three parts. The first part covers Benjamin Graham's views about the stock market. The second part meanwhile, focuses on Warren Buffett's own investment knowledge and teachings. The third and final part is devoted to points of view about Boards of Directors, CEOs, and corporate governance.

Review

This is another excellent book that is filled with brilliant investment knowledge. If there are investors worthy of learning about, these are Warren Buffett, one of the richest men in the planet and Benjamin Graham, the father of modern security analysis.

Difficulty Level = 2.0/5

This book does not require any math or financial knowledge, just an understanding an appreciation for  finance and investing.

Personal Rating = 4/5

This is a relatively light-reading and a good intermediate level book for those who want to study finance.

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The Five Rules for Successful Stock Investing

About the book

For me, this is one of the most useful and informative investing books I have come across. Consisting of 364 pages and made up of numerous chapters, Pat Dorsey's book on successful stock investing is a must-have book for any aspiring investor.

Contents

This book consists of 26 chapters. The first few chapters cover the introduction, the five rules for successful stock investing, and seven investing mistakes to avoid. The next few chapters are devoted to definition of investment terms and learning how to read and analyze a company's financial statements. The remaining chapters describe the factors to look for in several types of industries.

Review

This is an excellent book because it is highly informative, easy to understand, and simple enough to follow. It contains a lot of lessons that cannot be absorbed in just one reading.

Difficulty Level = 2.5/5

The book is easy enough to read. For those who have little knowledge with terms and accounting, the book devotes a few chapters for those topics.

Personal Rating = 5/5

This is one of best modern investment books around. I only hope that there soon comes up a newer revised edition. At the end of the book, the author gives a list of his own recommended readings. Most of those I have already read and indeed found very enlightening. So, my fellow readers, do keep track of my blog to know what those recommended books are.

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Buffettology

About the book

Spanning 319 pages, Buffettology is authored by Warren Buffett's former daughter-in-law, Mary Buffett, and David Clark.

Contents

This work is separated into two parts, namely the basic and the advanced section. The basic part deals with some definition of terms, pointers about Warren Buffett's investment strategy, and discussions about inflation and compounding.

The advanced section, meanwhile, contains, several chapters teaching you how to estimate earning power, growth rates, future values, and compounded rate of return, among other things. It also mentions 54 real-life companies that Warren Buffett looks or looked at before.

Review

Although this was written by Warren Buffett's daughter-in-law, I find this work too summarized. It is an effort to simplify Warren Buffett's investing strategy for the benefit of average readers and investors. Rather than helping you grasp more about Warren Buffett's style, it makes you feel that you need to learn more about Warren Buffett. It makes you want to look for other works about the successful billionaire and put his strategies in a wider context. Furthermore, the advanced section involving computations lacks further guidance and is hard to follow. One would need to buy the Buffettology workbook to get a better working idea. 

Difficulty Level = 3/5

Even though the language is easy to understand, there seem to be too many simplified ideas and lessons built into every chapter.

Personal Rating = 2/5

In my opinion, it would be better to start learning first about basic finance computations and fundamental analysis techniques before reading this book. 

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The Intelligent Investor

About the book

This is the second book authored by the father of modern security analysis, Benjamin Graham. This revised edition spans 623 pages and is moderately challenging to read. This edition also comes with a commentary by well-known author Jason Zweig.

Contents

This book contains 20 chapters covering topics such as: investment vs speculation, the investor and inflation, up to the margin of safety principle. Furthermore, each chapter ends with a chapter commentary by Jason Zweig.

Review

This work was first published in the 1970s and as such, discusses companies,stocks, and bonds that were popular during those times. As such, young investors born much later than that period will have difficulty relating with it. However, this is offset by the more modern commentary provided at the end of each chapter.

Difficulty Level = 3/5

For me, this is easier to understand as compared to Security Analysis. However, more modern investment books can be easier to understand.

Personal Rating = 4.5/5

This is one of the investment classic books that every investor has to read. Those new to investing and have little knowledge in it may opt to delay reading this fine work.

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Common Stocks and Uncommon Profits

About the book

This investment classic book is around 292 pages long. It was also written by Philip A. Fisher, one of the mentors who shaped the now investment philosophy of billionaires Warren Buffett and Charles Munger (Warren Buffett's longtime friend, partner, and sidekick).

Contents

Unlike Benjamin Graham's focus on analyzing financial statements (quantitative) and preference for cheap value companies, Philip Fisher prefers to explore growth companies and delve into the qualitative characters of the business or company. Most of the chapters in this book tell the reader what aspects to look for when analyzing a business.

Review

I found this book very useful and is a good complement to Benjamin Graham's writings. To properly evaluate a company, one needs both quantitative and qualitative analysis and not just one. Although it is an old work, the questions and principles stated in the book are still very much applicable today.

Difficulty Level = 3/5

You certainly don't need to be an accountant to understand the book. However, since this is a classic book, the style of discussion in the book is quite different from modern investment books.

Personal Rating = 4/5

One should not miss out on reading this book. It is a work full of timeless information.

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Financial Shenanigans

About the book

This 2nd edition of the book is around 295 pages. As far as I know, this is sold only as hardcover editions. There is currently a new hardcover edition which is more available and updated.

Contents

As the subtitle infers, most of the chapters of this book provide clear instructions on how to detect accounting gimmicks and fraud (shenanigans). It will provide you, the reader, with specific items and trends to watch out for when reviewing a company's financial books.

Review

For those who have access to a company's books and who do a lot of financial auditing, this book is a must read. You do not need to be a CPA to understand this book. However, you will need to have at least a basic knowledge of financial accounting. Furthermore, most of the examples provided were publicly-listed firms in the United States. Hence, some of the accounting gimmicks may not be applicable for other types of companies.   

Difficulty Level = 4/5

This book requires a good basic knowledge of financial accounting in order to appreciate the lessons taught in this book.

Personal Rating = 3.5/5

Although this work is not useful for everyone, it certainly provides very specialized knowledge to those who know how to make use of it.

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Security Analysis: The Classic 1951 edition (reprint)

About the book

One could say that this is the bible of long-term investors, both literally and figuratively. This hardbound edition is 770 pages thick. Furthermore, it is said to be the foremost book in value investing, as it is authored by both Benjamin Graham and  his colleague David Dodd. Ben Graham is considered to be the father of modern security analysis. He also happens to be the mentor of the legendary Warren Buffett.

Contents

Most of the chapters cover discussions on fixed-income securities, valuation of common stocks, and analysis of financial statements. Most of the examples however, are railroad companies. These companies were part of the blooming industries back in the 1950s.  

Review

This book is not meant for those who are new and barely interested in investing. It is quite difficult to understand because most of the examples are hard to relate to (i.e. year 1950 railroad companies). However, any serious investor should at least read this book to get an appreciation of the fundamentals of value investing.  

Difficulty Level = 5/5

This book can be difficult to comprehend. Only a few, but very important lessons can be learned and still applied today.

Personal Rating = 5/5

To understand more about the beginnings of modern security analysis (i.e. stock or bond evaluation), one must definitely get a copy of this timeless work. 

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