6 Books Every Value Investor Should Read This Summer
Summer has unofficially started, as Memorial Day Weekend has passed. It is now the season for fun in the sun, backyard barbecues, trips to the beach and lying by the pool.
It is also the season for reading.
Publishers rush to release the new titles for folks to read by the beach, the pool or in the hammock.
There will be a wide selection of new releases to enjoy for lovers of every genre. However, this is also a great time for traders to increase their knowledge of the markets. Here are a few recommendations for traders to pick up and read this summer.
Related: Doug Kass' Top 11 Favorite Books
Joel Greenblatt is best known for his book The Little Book That Beats the Market. However, many feel that 1997's You Too Can Be a Stock Market Genius was a better book that contained deeper knowledge of what it takes to succeed as a value investor. He covers in-depth things like focusing on risk first, spinoffs, merger securities, risk arbitrage, leap replacement strategies and free cash flow.
Some of the strategies have since been arbitraged out of existence, but the basic information of finding, evaluating and owning a portfolio of undervalued misunderstood securities is still quite valid.
Finding The Value
Last year, Tobias Carlisle and Wesley Gray released a fantastic book titled Quantitative Value. The two crunch the numbers to find what does and does not work in the stock market. They look for ways to find truly undervalued stocks with the potential for high returns and help traders avoid those stocks that can expose them to a permanent loss of capital.
It is a thorough look at how to use the numbers to find potential winning stocks. It includes some very good information on how to follow the smart money to identify potential bargain issues. The authors walk traders through the process of putting together a quantitative investment model and share the model that their research shows to be the most successful.
Any book that can reference Zed Thorpe and Warren Buffett in the same chapter is one all traders have to read. Quantitative Value should be on every investor's permanent bookshelf.
When noted value investor Mohnish Pabrai says of a particular book that reading it can only lead to better investment results for everyone, that book has to be on any trader's summer reading list. That is exactly what he said about The Manual of Ideas by John Mihaljevic.
The book breaks down several different approaches to finding stock market success including deep value, special situations, portfolio cloning, microcap stocks, stub stocks and international value investing, among others.
Mihaljevic teaches traders how to uncover and evaluate a wide range of potential value opportunities. He also provides a list of names of some of the best investors that traders should be tracking and using as a source of ideas. The book is well-written, easy to read and an incredibly valuable investment resource.
Even A Biography
The Einstein of Money, Joe Carlen's biography of Benjamin Graham, is also a must-read for serious investors. The book unveils many of Graham's secrets for making money and takes an in-depth look at the amazing life of the father of value investing.
Graham's personal slogan was to do something silly, something generous and something creative every day; for the most part, he succeeded at living up to his motto. Howard Marks of Oaktree Capital said that this book does investors a real service -- that should be motivation enough for anyone serious about making money in the stock market.
The summer season is one of great fun and hopefully some down time for reading and relaxing. While all work and no play does indeed make John a rather dull fellow, taking some time to read books that can help build net worth and reach investment goals is not a bad plan for a sunny afternoon.
By the way, if for some reason anyone still has not read Benjamin Graham's classic The Intelligent Investor, they should be sure to read that one first. It is the basis for all the great investing books that have come since it was published in 1949.
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