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13 GREAT books to learn Investing & the Stock markets! [summary included!]Tools & Resources

We've received many questions for recommendations on books for Investing & the Stock markets. We've curated a list of our 13 favorite books on Investing & the Stock Market, and explanations on what the books are about. I've learned a great deal from these books. All of these are by really great investing legends/ gurus. These books offer a few different approaches to the stock market. Different investment styles will help educate you on how to make successful long term investments, minimize risk, and analyze stocks more accurately. All of these books can be purchased used very cheaply ($1 to $5)!

As your income grows, your investment portfolio should also grow. One of the biggest obstacles for beginner investors is just knowing how to get started. Learning about financial concepts can be intimidating at first. A great way to start, can be by picking up a book by an expert who thoughtfully and sequentially presents & explains these concepts and topics. Resources like these can help investing be less intimidating and complicated. One of the best strategies is to learn from the insight and wisdom of gurus. I hope these book recommendations help!

Book List:
  1. How to Make Money in Stocks by William O'Neil
  2. The Little Book That Still Beats the Market by Joel Greenblatt
  3. A Random Walk Down Wall Street by Burton G. Malkiel
  4. Principles by Ray Dalio
  5. One Up On Wall Street by Peter Lynch
  6. The Big Secret for the Small Investor by Joel Greenblatt
  7. Winning on Wall Street by Martin Zweig
  8. Irrational Exuberance by Robert Shiller
  9. The Bogleheads' Guide to Investing
  10. Common Sense Investing by John Bogle
  11. The Intelligent Investor by Benjamin Graham
  12. The Only Investment Guide You'll Ever Need by Andrew Tobias
  13. You Can Be a Stock Market Genius by Joel Greenblatt

Book Descriptions & Covers:

How to Make Money in Stocks by William O'Neil

  • This book is about growth investing. O'Neil explains what most successful stocks have done to be successful. He explains his 'CANSLIM' method, which is an acronym for 7 fundamental criteria which you can use to pick stocks. An AAII 8 year study of different strategies showed O'Neal's CAN SLIM with a 860% return from 1998-2005 (Second place). First place was Martin Zwieg's returning 1,659.3% (we will get to Zweig on this list too)

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  • The idea of this book is to buy undervalued good businesses and hold them long-term, which will eventually beat the market index.

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A Random Walk Down Wall Street by Burton G. Malkiel
  • This book covers investment bubbles, fundamental vs. technical analysis, modern portfolio theory, index funds, etc.

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Principles by Ray Dalio
  • This book provides the insights from one of the biggest hedge fund managers of all time, and I think there are many great lessons to learn in this book!

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One Up On Wall Street by Peter Lynch
  • This book emphasizes the advantages that individual investors hold over institutional investors (when it comes to finding investment opportunities). Lynch also gives many of examples of mistakes he has made, and how he has learned from them.

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  • Greenblatt explains why index funds can be better than actively managed funds. The big secret is maintaining a long term perspective!

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Winning on Wall Street by Martin Zweig
  • Zweig's success came from his ability to predict the bigger picture (such as trends in the broader market). The combination of his stock picking skill, general market understanding, and market timing, made him one of the great investors of stock market history. Zweig was more interested in growth than value. Unlike Buffett, Zweig isn't a 'buy and hold' investor. An AAII 8 year study of different strategies showed Zwieg's returning 1,659.3% from 1998-2005. He was #1 out of 56 others, including Buffett, Lynch, Fisher, O'Neal's CAN SLIM, Motley fools, and using ROE, P/E's etc. Second place was O'Neal's CAN SLIM with a 860% return.

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Irrational Exuberance by Robert Shiller
  • Shiller makes strong argument that perfect market theory is flawed. The Idea of perfect market theory is basically that the markets are all knowing and completely rational, and in the long run can't be beat. Therefore , you can control costs with index funds and diversification. (You can't beat the market, therefore controlling costs and diversifying seems like logical strategy)

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  • The key concepts of this book are risk tolerance, asset allocation, a balanced portfolio, tax efficiency and cash management. This book explains many of the pitfalls of investing. The Bogleheads and Jack Bogle preach the power of compound interest. Investing in low-fee index funds and holding them long-term is the method. This book gives an excellent, detailed rundown of how to implement this kind of investment plan.

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  • Great information for anyone who is trying to make sense of personal finance and basic investments. This book explains why passive investing is a worry free, long-term strategy that consistency wins over time, and why active trading always returns to the mean.

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The Intelligent Investor by Benjamin Graham
  • This is a great book for anyone who is interested in introducing themselves into the world of investing, or wants to get better at investing. This book gives lots of valuable information to help one understand the basics of value investing.

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  • This is a book for people looking to learn the basics of investing and saving money

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  • This is not a book for beginners. Greenblatt gives a nice exposition of some more "special situation" investment styles & areas of equity investments (mergers, spin-offs, rights offerings, etc.)

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What do you do, that you earn six figures? Whats your occupation that pays so well? (It seems like a lot of people make a lot of money, and it seems like I’m missing out on something)Discussion/ Debate

What do you do, that you earn six figures?

It seems like a lot of people make a lot of money, and it seems like I’m missing out on something.

So those of you that do, whats your occupation that pays so well?

What is EBITDA? Why is it important? Here's everything you need to know about this popular finance term:Tips & Advice

What is EBITDA?

Why is it important?

Here's everything you need to know about this popular finance term:

When you look at a company's EBITDA, you're getting a clear picture of how much cash flow it's generating from its core operations.

EBITDA helps people compare different businesses, even if they're in different industries or have different ways of financing themselves.

By looking at EBITDA, you can get a clearer picture of how efficiently each business is running, regardless of their different situations.

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What exactly is EBITDA?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.

Let's break it down:

1) Earnings: This is the money a company makes from its business activities.

2) Before: This means we're looking at the earnings before some other things happen.

3) Interest: This is the money a company pays to borrow money or the money they earn from lending money to others.

4) Taxes: These are the payments a company makes to the government based on its earnings.

5) Depreciation: This is when the value of a company's assets (like equipment or buildings) goes down over time because they get old or wear out.

6) Amortization: This is similar to depreciation, but it's for intangible things like patents or trademarks that also lose value over time.

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3. Why is EBITDA important?

It's important for a few reasons:

A) It helps compare companies:

Since EBITDA doesn't include the effects of taxes, interest, depreciation, and amortization, it makes it easier to compare companies in different countries or with different financial structures.

B) It shows a company's core profitability:

By looking at EBITDA, we can see how well a company is doing in its main business activities without being affected by things like taxes or how they finance their operations.

C) It can help with decision-making:

EBITDA is often used by investors and analysts to decide if they want to invest in a company or not. It can also help companies make decisions about their own operations.

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4. Here are tips for using EBITDA effectively:

A) Compare apples to apples:

When comparing EBITDA between companies, make sure they are in the same industry and have similar business models.

B) Look at trends:

Evaluate a company's EBITDA trend over time to see if it's improving or declining.

C) Consider other metrics too:

While EBITDA is a useful metric, it's not the only one that matters. Consider other metrics like revenue growth, net income, and cash flow.

D) Be mindful of non-recurring items:

Sometimes, companies may have non-recurring items that affect their EBITDA. Make sure to adjust for these items when comparing EBITDA between companies.

E) Use EBITDA multiples:

EBITDA multiples are often used to value companies. Divide a company's enterprise value by its EBITDA to get its EBITDA multiple. A higher multiple indicates a higher valuation.

EBITDA vs. Net Income:

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“Every time you hear EBITDA, just substitute it with bullshit.”

— Charlie Munger

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by TonyLibertyTheFinanceNewsletter.com
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5
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It’s time WE admit we're entering a new economic/financial paradigm, and the advice that got people ahead in the 1990s to 2020s NO longer appliesPersonal Finance

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Traditionally “middle class” careers are no longer middle class, you need to aim higher.

Careers such as accountant, engineer, teacher, are no longer good if your goal is to own a home and retire.

It’s no longer good enough to be a middle earner and save 15% of your income if your goal is to own a home and retire.

It’s time for all of us to face the facts, there’s currently no political or economic mechanism to reverse the trend we are seeing. More housing needs to be built and it isn’t happening, so we all need to admit that the strategies necessary to own a home will involve out-competing those around us for this limited resource.

Am I missing something?

Is it just me, or is "Rich Dad Poor Dad" a really bad personal finance book? I really don't know how it became a "classic" lmaoDiscussion/ Debate

The title may a bit harsh, but hear me out.

I got really into personal finance and FIRE (Financial Independence, Retire Early), over the past 2 years, mostly by reading Reddit and Investopedia.

After reading so much about personal finance and investing online, I figured it was time to read some of the classic personal finance books. I started with "Rich Dad Poor Dad" because I hear it tossed around so much.

Now, I will start off with the positives about the book. I think from a mindset perspective, it's good. Things that I think people should take more seriously are paying yourself first, knowing how to buy assets, having your money make money, optimizing assets, etc. All of this is great advice and certainly not enough people heed it.

My main frustrations from the book came from the specific examples that Robert Kiyosaki chose to give. Just to name some off the top of my head, here are a few things that he suggests over the course of the book:

  • Dropping money in penny stocks and IPOs to make a killing (he cites one example of making an absurd amount of money off one... seems like selective hindsight to me)
  • Picking up foreclosed houses to flip. Sure I bet you can make money this way, but certainly not great advice for the regular person
  • Everyone should join a multi-level marketing company to learn how to sell. This one made me laugh... that is awful advice
  • Investing in 16% tax liens. This one he even brings up an example of his friend calling him dumb and he is so smug about it when defending himself.

Those four were particularly bad, but I remember several others that made me scratch my head and say WTF.

I mean, the man acts like investing in a mutual fund is for someone who wants to live on rice and beans the rest of their life (to be fair though, I know low-cost index funds weren't as widely available / know about back when the book was written).

To add to the bad advice, it also annoyed me from a stylistic perspective that he acts like poor people are all as dumb as rocks and his cunning genius is why he's rich. I can only imagine the people who read his book and went out and joined an MLM and put all their money into tax liens and wonder why they never got rich.

In my opinion, this book should not be read by anyone who is planning on pursuing FIRE, there are so many better options.

Am I crazy?

What are some tax advantaged accounts you can open for your child that doesn't have to go to education expenses?Question

We are wanting to open a savings/investing account for our daughter (7 months) but don't want it to be penalized if it isn't used for education expenses. What are some good options available?

Why are there so many bots on this sub?Question

Nearly every post is made by a less than 2 week old account that only reposts old topics.

Unpopular Opinion: $1 Million isn't a lot of money anymore (here's the math)Discussion/ Debate

I was in a discussion with friends about how much liquidity they would need to retire. One guy was positive that you could live like a king on $1 Million in the US.

He refused to do the math, but I reasoned he could pay off his house (about $300,000) and have $28,000/year assuming a 4% SWR of the remaining $700,000.

His salary now is about $120,000/year, so he would have to make DRASTIC changes to his lifestyle to live off that $28,000.

(Some more details, he has a family of 4 and probably spends $50,000 year on expenses. He seems to think that his lifestyle would elevate indefinitely and he could stop working if he had $1 Million).

He says that $1M is "life changing." but I disagree.

Who's right?

You don't have to give your employer a 2 weeks notice. You are not legally required to give notice.Tips & Advice

I've seen my company terminate 4 employees as soon as they gave their 2 weeks notice.

I gave my 2 weeks notice on a Wednesday and 2 day later on Friday was told they were terminating me and they were not intending on paying me for the remainder of the 2 weeks.

Fortunately I started the following Monday with a new company.

As a word of warning, if you have seen your employer terminate any employees as soon as they give notice DO NOT GIVE NOTICE.

You are not legally required to give notice, and if the company does not give the courtesy of letting employees finish out their 2 weeks they don't deserve the courtesy of 2 weeks notice.

Once you see a pattern of immediate termination, no one at that company should ever give more than one day notice. They established that they will not honor the notice period, it's clear departing employees should not either.

It's important to be aware of what the management culture is like at your company, and plan appropriately.

Generally speaking you should give two weeks notice, but it is not required, and there are situations that you should not. Carefully judge for yourself.

Check your employee handbook. I was planning to quit without notice at a job I had, but the handbook had a clause that they won't pay out your PTO if you did that. I would have lost 3 weeks of accrued PTO if I just quit.

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What's happening in the markets: February 28thFinancial News

Good morning. US stock futures fell in Wednesday morning trading as investors looked ahead to a key inflation report.

S&P 500 -0.32%
Dow -0.28%
Nasdaq -0.43%

⛽ OPEC+ mulls output cut extension

📝 Our report: Oil prices just sprang up by over $1 a barrel as insiders spilled the beans that OPEC+ might be thinking of stretching out those voluntary oil output cuts into the second quarter. In an effort to support oil prices, sources close to the oil cartel said the producer group could keep the additional cuts in place until the end of the year.

🔑 Key points:

  • The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, agreed in November to voluntary cuts totalling about 2.2 million barrels per day (bpd) for the first quarter this year, led by Saudi Arabia rolling over its own voluntary cut.
  • Adding to a possible supply crunch, Russian authorities announced a six-month ban on gasoline exports from March 1 to compensate for rising demand and to allow for refinery maintenance.
  • In Asia, markets expect to see some improvement in Chinese oil demand as improving travel demand over the Lunar New Year holiday outweighed worries of slowing macro-economic indicators.

💡 So what: Extended oil output cuts by OPEC and its allies, holds significant implications for the oil market. By curbing production, OPEC+ attempts to balance supply and demand dynamics, thereby preventing sharp fluctuations in oil prices. While higher prices resulting from output cuts can bolster producer revenues, they may also translate into increased costs for consumers of petroleum products. Moreover, extended output cuts can influence investment decisions in the oil and gas sector, potentially shaping future production levels and industry dynamics.

🚗 Bye bye Apple Car

WHAT: Apple's electric dreams just got unplugged! According to company insiders, they're ditching their decade-long quest to build an electric car, waving goodbye to what could've been one of the most electrifying projects in Apple's history.

WHY: The decision to ultimately wind down the project is a bombshell for the company, ending a multibillion-dollar effort that would have vaulted Apple into a whole new industry. The tech giant started working on a car around 2014, setting its sights on a fully autonomous electric vehicle with a limousine-like interior and voice-guided navigation.

🏬 Macy’s to shutter stores in turnaround attempt

WHAT: Looks like Macy's is doing a little retail cleanup, shutting down 150 lackluster locations, with 50 waving goodbye by the end of 2024. The company made the announcement as it released its latest batch of earnings that came in slightly higher than expectations

WHY: As part of the turnaround effort, the company said it plans to focus its resources to improve assortment and invest in digital sales, along with an expansion of small-format stores.

💲 Buy-now, pay-later firm considers mega IPO

WHAT: Hold on to your fintech hats! Klarna, the Swedish buy-now, pay-later sensation that once wore the crown as Europe's most valuable startup, is now gearing up for a potential US public market listing. According to insiders, the company recently started having detailed discussions with investment banks to work on an initial public offering that could happen as early as the third quarter, with Klarna reportedly seeking a valuation of $20 billion.

WHY: Klarna’s valuation reached a staggering $45.6 billion in a 2021 round before falling to $6.7 billion the following year, as rising interest rates forced investors to reconsider backing online lending platforms.

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Don’t be discouraged by others who seem to be doing better than you are financially. Many have had enormous advantages. Don’t others discourage you; we’re all on our own paths.Tips & Advice

I’m 26, make $110,000, and am about to cross $100,000 net worth. I’m not doing quite as well as some people on here, but I’m definitely the kind of person you might look at and think, “wow, he got it together early. I wish I’d been doing that well at that age.”

But here’s the story you don’t see behind those stats:

  • My parents gave me their old car when I turned 16. And then when it broke down a year later, they bought me another car.
  • My parents paid for my entire college degree. I didn’t even have to pay for my books.
  • My dad convinced me to start funding a Roth IRA when I was 18. I didn’t even know what an IRA was and just blindly did what he said. And because my parents were paying all my expenses, it was easy to max it out on the salary from my part time job.
  • After I graduated college, I couldn’t get a good job in my field and decided to go back for a second degree. My grandma paid for tuition this time, and my parents let me live with them, so still no student debt.
  • When I graduated college the second time with a full-time job, I was out of money and couldn’t afford the move I needed to do. So my parents lent me $10,000 and told me to pay them back whenever. It’s been 2 years and I’ve only paid back $5,000 so far, which they’re fine with. Can you imagine if I’d needed to take out an actual line of credit to finance my move?

The point I’m getting at here is that while I may be doing pretty well for myself, I also played life on easy mode. I overcame absolutely 0 adversity to get where I am. I’m actually not even doing that well when you take all of that into account; lots of people would be doing better than me if we’d been dealt the same hand.

So when you see some young person talking about their giant net worth, just know that they likely had a lot of help along the way. You can’t compare yourself to other people because you haven’t come from the same place.

You should always measure your accomplishments relative to yourself, not some random person on who’s your age but has double the net worth.

Don’t let other people discourage you; we’re all on our own paths.

What is the best approach to dealing with medical debt that I CANNOT pay?Question

I am chronically in the ER which results in me being put in collections. I've ignored it in the past, was wondering if there is a better financial/credit score approach.