We’ve developed a list of some of the best value investing books of the past 100 years. These value investing books are written by the masters of Wall Street. The theories and practices laid out in each of the value investing books are rock solid and true.
The Intelligent Investor by Benjamin Graham
Written in 1949, The Intelligent Investor by Benjamin Graham is the seminal book on value investing. In fact, Graham is the father of value investing. Famous investors such as Warren Buffet have touted its importance for years. Warren Buffet even wrote the preface to The Intelligent Investor by Benjamin Graham in the 4th edition of the book written in 1984. In addition, Mr. Buffet describes The Intelligent Investor by Benjamin Graham as “the best book about investing ever written.”
Benjamin Graham was a Columbia University economist, professor and investor who lived in the United States in the 20th century. He is famously known as the father of value investing. Value investing is purchasing equities such as stocks that are estimated to be undervalued. Graham authored many books and has inspired many modern day investors to implement and laud his value investing guidance. Graham also co-authored “Security Analysis” with David L. Dodd in the 1930s, prior to “The Intelligent Investor.”
One Up on Wall Street by Peter Lynch
Written in 1989, One Up on Wall Street might be the most entertaining investment book you ever read. It focuses on investing fundamentals taken from Lynch’s decades of success on Wall Street. Lynch discusses critical investing basics like P/E ratio, timing trades and other core fundamental analysis tips. He also focuses heavily on discussing what not to do, which might actually be the most valuable part of the book.
Peter Lynch was investor and fund manager on Wall Street during 1980s at Fidelity Investments. He began managing the Magellan Fund for Fidelity in 1977, taking it from $18 Million to $14 Billion in assets. Lynch is considered to be a legendary investor because of the success of his investments.
He also wrote several other value investing books on investing that are highly regarded, such as “Beating the Street.” Lynch is famous for the investing principle of “invest in what you know.” This strategy encourages investors to focus on particular industries of which they have knowledge to find undervalued stocks or companies.
The Little Book of Common Sense Investing by John C. Bogle
Known as the investment bible among index fund investors, John C. Bogle’s “The Little Book of Common Sense Investing” is a classic guide to value investing. Bogle promotes a strategy of “buy and hold” for assets, focusing on index mutual funds. The theory behind the strategy is that the investor who minimizes trading frequency will reduce risk and fees incurred from trades. As a result, the investor maximizes returns over the long term.
“Rather than listen to the siren songs from investment managers, investors–large and small–should instead read Jack Bogle’s The Little Book of Common Sense Investing.”— Warren Buffet
John C. Bogle was an American investor who was the founder of the Vanguard Group, one of the most famous and successful investment funds. In addition, he created the first index mutual fund in 1975. His investments reflected Bogle’s idea of garnering higher returns over a long period of time with fewer trades and fees. In other words, his investment philosophy was to remove speculation from trades and simply hold investments for longer periods.
John C. Bogle’s Rules for Investment:
- Select low-cost funds
- Consider carefully the added costs of advice
- Do not overrate past fund performance
- Use past performance to determine consistency and risk
- Beware of stars (as in, star mutual fund managers)
- Beware of asset size
- Don’t own too many funds
- Buy your fund portfolio – and hold it
Common Stocks and Uncommon Profits by Philip Fisher
Considered a compliment to The Intelligent Investor by Benjamin Graham, Common Stocks and Uncommon Profits by Philip Fisher was written in 1957. Despite the books age, it has remained popular amongst investors as a value investing guide, even among famous investors such as Warren Buffet. Fisher recommends taking a qualitative approach when investing in companies. Instead of looking at numbers and annual reports (which remain important), Fisher challenges investors to take a deeper look at factors within a company such as research, management, internal relations, etc. This aids the investor in making better decisions about whether the company has potential for future growth.
Philip Fisher is considered one of the most influential investors in Wall Street history. His methods and teachings have been studied and utilized by investors for decades.
“I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits…A thorough understanding of the business, obtained by using Phil’s techniques…enables one to make intelligent investment commitments.”
Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth Klarman, 1991
Borrowing the book title from the Benjamin Graham’s philosophy of always investing with a margin of safety, Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth Klarman has become an instant classic among value investing books. The book was published in 1991 and has continued to stand on its own as a solid value investing guide.
Seth Klarman is a billionaire investor and hedge fund manager based in the United States. He is the portfolio manager and CEO of Baupost Group, formed in Boston in 1982. Regarding value investing, Klarman was once quoted as saying,
“It turns out that value investing is something that is in your blood. There are people who just don’t have the patience and discipline to do it, and there are people who do. So it leads me to think it’s genetic.”
Klarman is known for purchasing unpopular, undervalued assets, which is a hallmark of value investing.
You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt
This book is considered by some to be a more advanced guide for investing and may not be for beginners. However, among value investing books, it is highly rated and features case studies and examples of successful investments and trades. Furthermore, the author has a strong background in value investing and has had great success on Wall Street.
“You Can Be a Stock Market Genius” offers a treasure map to situations where profits are possible for situations such as mergers, bankruptcies, spin-offs and more.
Joel Greenblatt is a hedge fund manager, investor, writer and professor. In addition, he manages Gotham Funds with partner Robert Goldstein, which was founded in the 1980s. Greenblatt also formed the Value Investors Club, a limited membership group that exchanges investing ideas. In addition, he teaches a class on value investing at Columbia University in New York. He has written several value investing books, including “The Little Book that Beats the Market.”
The Dhandho Investor: The Low-Risk Value Method to High Returns by Mohnish Pabrai, 2007
Mohnish Pabrai’s The Dhandho Investor: The Low-Risk Value Method to High Returns, utilizes the value investing methods of Benjamin Graham and Warren Buffet and promises to “maximize rewards” with low risk. The Dhandho fund claims to earn very high returns with minimal risk year after year.
Mohnish Pabrai is the founder and leader of both Pabrai Investment Funds and Dhandho Funds. He is the author of several books, including “The Low-Risk Value Method to High Returns by Mohnish Pabrai.” He is a value investor who invests in smaller capitalized companies which are out of favor.