Top Value Investing Books
 

Top Value Investing Books

Best Selling Value Investing Books With Most Reviews



Amazon.com Review

This classic text is annotated to update Graham's timeless wisdom for today's market conditions... - The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham's philosophy of "value investing" -- which shields investors from substantial error and teaches them to develop long-term strategies -- has made The Intelligent Investor the stock market bible ever since its original publication in 1949. - Over the years, market developments have proven the wisdom of Graham's strategies. While preserving the integrity of Graham's original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today's market, draws parallels between Graham's examples and today's financial headlines, and gives readers a more thorough understanding of how to apply Graham's principles. Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals. -

Review

When I first came across the first edition of this book in my local library in 1959, I was a teenager. Back in those days there were only a handful of books about the stock market. And I've read all of them during my junior high and high school years. - This latest updated 623-page paperback (the index alone is 33 pages) version updated by Jason Zweig is a welcome addition to this classic. The original chapters are intact, but with footnoted comments by Zweig. Moreover, he provides his own commentary on each chapter contents in a separate chapter following each original chapter. He provides extensive research, charts, tables and commentary that updates the book to the present years. He is not afraid to take on the big guns of Wall Street and show how wrong they were in some of their extremely bullish predictions during January-March 2000, when the market was at its peak. - The first nine chapters cover investing basics that all investors could benefit from. There are many truisms spouted on Wall Street that are not really true. These chapters provide the investor with a realistic picture of how Wall Street works and what investors need to do to come out ahead. - Chapters 10-20 focus strictly on fundamental analysis, stock selection, convertible issues and warrants, and other subjects. Investors who plan to invest directly in stocks should make sure to read these chapters. However, for readers more interested in investing in mutual funds, and in particular index funds, they need not concern themselves with all the detail in these chapters unless they have the time or interest in the subject matter presented. In conclusion, the combination of pioneer Ben Graham?s original work coupled with Zweig?s meticulous and enjoyable update, make this a remarkable book about investments and investor behavior that every new and experienced investor should read. Of the 500 investing books that I?ve read, this one certainly is one of the greats of all time. -




Amazon.com Review

From the "guru to Wall Street's gurus" comes the fundamental techniques of value investing and their applications Bruce Greenwald is one of the leading authorities on value investing. Some of the savviest people on Wall Street have taken his Columbia Business School executive education course on the subject. Now this dynamic and popular teacher, with some colleagues, reveals the fundamental principles of value investing, the one investment technique that has proven itself consistently over time. After covering general techniques of value investing, the book proceeds to illustrate their applications through profiles of Warren Buffett, Michael Price, Mario Gabellio, and other successful value investors. A number of case studies highlight the techniques in practice. Bruce C. N. Greenwald (New York, NY) is the Robert Heilbrunn Professor of Finance and Asset Management at Columbia University. Judd Kahn, PhD (New York, NY), is a member of Morningside Value Investors. Paul D. Sonkin (New York, NY) is the investment manager of the Hummingbird Value Fund. Michael van Biema (New York, NY) is an Assistant Professor at the Graduate School of Business, Columbia University.

Review

I am a professional investor (CFA charter holder and portfolio manager) and would suggest this book for anyone interested in the value style of investing. I would not recommend the book for a novice investor since some terminology is not explained. (Perhaps read this book after reading and understanding Benjamin Graham's The Intelligent Investor.) However, the book is an excellent read for someone with an understanding of investing. The book is divided into two main parts: The authors' views of different ways to value a company and profiles of successful value investors.

I think the authors' Earnings Power Value (EPV) approach to valuing a company is cutting edge. (Basically EPV is a rehash of Enterprise Value.) Most investors tend to value stocks based on P/E ratios - only looking at equity in a company. However, the proper way to value a company is to look at its whole capital structure - Debt, Equity & Cash. EPV is a much better tool than the P/E ratio for calculating whether a company is undervalued.

The second part of the book that profiles a half dozen or so successful value investors is interesting. It illustrates there are many different ways to execute a value oriented approach. The profiles do not give any hard cut rules that each investor follows, but it does give you a general idea. (I have been successful at applying some of the ideas in managing my own account.) The only flaw of the profiles is the lack of any type of track record. It would have been helpful to list the year-by-year returns for each investor compared to an index. (i.e. S&P 500 Index)

Overall, it's a great book and it deserves a spot behind Ben Graham's Security Analysis and Intelligent Investor.




Amazon.com Review

An ardent follower of Warren Buffett-the most high-profile value investor today-author Charles Mizrahi has long believed in the power of this proven approach. Now, with Getting Started in Value Investing, Mizrahi breaks down this successful strategy so that anyone can learn how to use it in his or her own investment endeavors. Written in a straightforward and accessible style, this book helps readers gain an overall understanding of the value approach to investing and presents statistics that reveal the overwhelming success of this approach through a variety of markets. Engaging and informative, Getting Started in Value Investing skillfully shows readers how to look for undervalued companies and provides them with the tools they need to succeed in today's markets.

Charles S. Mizrahi (Brooklyn, NY) is Managing Partner of CGM Partners Fund LP. He is also editor of Hidden Values Alert, a monthly newsletter focused on value investing. Mizrahi has more than 25 years of investment experience and is frequently quoted in the press. Many of his articles appear online at gurufocus.com as well as on other financial sites.

Review

What is value investing? It's the idea of buying a part of a business through public shares at a significant discount to the true value of the business.

If you studied efficient market theory in school, you are probably laughing right now . . . for that theory teaches that no one can buy any stock at a discount to its economic value. But consider that many stocks trade as much as 25 percent above and below their average price in any given year. Surely the value of a business doesn't vary that much in 12 months.

Value investors believe that the market misprices securities about 10-15 percent of the time. If you can buy something for half its value, that should be a good deal. The challenge is to spot those mispriced situations.

Value investing has been around for a long time, but most of the earliest texts are hard for new investors to apply (such as Security Analysis by Graham and Dodd and Benjamin Graham's The Intelligent Investor). I was pleasantly surprised to see that Mr. Mizrahi is well versed in both the original approaches to value investing and the adjustments made since then by legendary investors like Warren Buffett and Charles Munger. Mr. Mizrahi also displays a wonderful talent for making security analysis easy to understand and to apply. In the future when students of mine want to learn the basics of value investing, I will recommend this book.

I do recommend that if you decide to apply this approach that you keep in mind that almost all investors underperform the market averages over long periods of time (five years and more). You'll have to be good at value investing to make it work. If it seems like more effort than it's worth, you can now buy index funds that feature small cap, low P/E multiple stocks . . . the sort that have outperformed the overall market averages in the last several decades. Or you can invest along with value investors who run mutual funds . . . or even buy shares in Berkshire-Hathaway, which Buffett and Munger run.

Is value investing right for you? Yes, if you are determined to outperform the averages and are willing to do the necessary homework and stick with it. I believe that will be less than one percent of the people. After reading this book, you should have a better idea of whether you are a good candidate.

If you do decide you like the approach, you'll need to dig into the resources that Mr. Mizrahi cites to learn more.

Let me give you a few cautions about the book:

1. The valuation method described in Chapter 9 is much simpler than what you should actually use. It's better to use discounted cash flow valuations (which are mentioned but not described). If you want to use the test of a future P/E multiple, Mr. Mizrahi is a little generous in his approach. Many industries regularly have P/E multiples much higher and lower than the averages. Adjusting your targets for future P/E multiples to reflect where lower multiples have been the historic case is a good idea not sufficiently developed here.

2. Mr. Mizrahi is a great proponent of ROE (return on equity) as a measure of good performance. Current accounting rules and the share repurchase practices of many companies combine to make ROE not such a good measure as Mr. Mizrahi suggests. Why? Because equity is artificially low so that any earnings are seen a high return earnings.

3. Mr. Mizrahi appears to overstate the case for value investing being a way to outperform the market averages. Yes, some people do achieve that result, but there are no statistics on what percentage do and what percentage don't. I suspect that many value investors don't beat the averages over five year time periods.

4. Mr. Mizrahi explains the concept of economic moats around businesses that allow them to prosper relative to competitors. You should realize that most businesses are losing their moats pretty rapidly now as they face more global competitors than in the past. Only those who are already prospering in most of the countries in the world can be presumed to have good moats now . . . and those moats may erode in the future.

5. Mr. Mizrahi favors larger capitalization companies (over $10 billion in value) to evaluate for potential purchase. You won't find the best buys in that group. Back testing shows that small capitalization companies usually do better on average.

6. Mr. Mizrahi recommends a definition for free cash flow that overstates actual cash availability. It would be better to add the cost in increased working capital to determine actual free cash flow.

7. A few of the tables Mr. Mizrahi supplies seem to have incorrect headings. Wherever you see the same heading repeated for two columns with different numbers, assume the headings are wrong and ignore those tables.

Nice work, Mr. Mizrahi!




Amazon.com Review

A BUSINESSWEEK BESTSELLER! Anyone can learn to invest wisely with this bestselling investment system! - Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System—a proven 7-step process for minimizing risk and maximizing gains—has influenced generations of investors. - Based on a major study of market winners from 1880 to 2009, this expanded edition gives you: - Proven techniques for finding winning stocks before they make big price gains - Tips on picking the best stocks, mutual funds, and ETFs to maximize your gains - 100 new charts to help you spot today’s most profitable trends - PLUS strategies to help you avoid the 21 most common investor mistakes! - “I dedicated the 2004 Stock Trader’s Almanac to Bill O’Neil: ‘His foresight, innovation, and disciplined approach to stock market investing will influence investors and traders for generations to come.’” - —Yale Hirsch, publisher and editor, Stock Trader’s Almanac and author of Let’s Change the World Inc. - “Investor’s Business Daily has provided a quarter-century of great financial journalism and investing strategies.” - —David Callaway, editor-in-chief, MarketWatch - “How to Make Money in Stocks is a classic. Any investor serious about making money in the market ought to read it.” -

Review

William O'Neil the author has just published his magnum opus and its a wonderful book to show the small investor how to attain wealth in an effective and systematic fashion. This book is a guide to understand how the Stock Market really works. William O'Neil perfected his CAN-SLIM method in the 1960's to make himself a multi-millionaire. He felt that his investment system was something most people could learn so he launched a newspaper in 1984 called Investment Business Daily (IBD) to teach small investors how to invest well and increase their net worth significantly. - During the go-go Bull market years of the 1990's IBD reached a subscription level of over 300,000 subscribers and competed head-on the the venerable and established Wall Street Journal (WSJ). I am convinced IBD is the superior newspaper because it specifically teaches the small investor how to outperform Mutual Funds by using the small investor's main advantage - the ability to get in and out of the market quickly. This advantage when properly used allows the small investor to avoid the major damage of a huge Bear market downturn such as in the case of 2001-2002 and also in 2008. Mutual Funds being so heavily invested with billions of dollars of stocks are not so nimble; consequently they usually take heavy losses during large market downturns such as in 2008. - His system is called CAN-SLIM. It is a complex set of rules; so allow yourself two years to learn the basics. You will have to master the reading of technical charts and understand fundamentals of various companies. You need to understand concepts such as Sales, Earnings, Return on Equity (ROE) , how Mutual Funds operate, accumulations, distributions, relative price strength (RPS), cups and handles, breakouts, 50-day moving averages, base failures, puts, calls, pivot points, double bottoms, growth stocks vs value stocks, accumulation days etc. Understanding these concepts is not for the faint hearted; there is a lot to learn. - O'Neil will show you the way with his book. Unfortunately the rules are very, very counter-intuitive and contrary to so called "conventional investment wisdom" and what most investment pundits advise. It will probably go against everything you have been taught in life. That is why most people have difficulty applying CAN-SLIM methods because it is so counter-intuitive. For example: What really works well is to buy high and sell higher. We are conditioned to buy low and sell high. This latter approach is not effective in the stock market but most people buy in the "conventional wisdom" manner and in many cases get clobbered. 98 % of individual investors buy stocks this way and it is not effective. You also need to know when the Bear Market is coming so you can exit and go to cash for safety. IBD provides the early warning indicators when the Bear is near. - There is much to learn in order to win against the Stock Market and how it really works. But it can be done ! To do so you need to be a hard worker and be able to learn from your mistakes. Learning CAN-SLIM is similar to learning upper-level math courses such as statistics. There are no royal roads or shortcuts in learning and applying CAN-SLIM rules. It is not an easy subject to learn. You should also have access to the Enhanced Daily Graphs to see both the Fundamental and Technical Analysis displayed on one page. You will need these tools to win this financial war; these tools provide the key financial intelligence to let you know what is really occurring in the world of the stock market. - I also recommend you keeping notes in a journal of some type. This will help you to learn the skills needed. You must also develop a skill in reading the charts to understand the psychology of what is happening in the market place. There are about 100 charts of past winners to study which provide the guide for picking future stock winners if you are able to recognize the patterns. If you can read the past history well you can predict the future. It will appear like you are looking at Latin and Greek symbols at first and will seem unintelligible for awhile but after much practice you will readily start seeing patterns. These patterns provide the entry and exits points for effective stock buys. - Why is learning this method so hard ? Here are some of the key CAN-SLIM rules that must be mastered if you do not want to financially hurt by the Stock Market: - 1) Buy stocks above $ 20 per share at the optimum pivot point in a buying surge during a strong Bull Market and sell at a higher price. - 2) Always cut your losses at 7 - 8 % when buying.(Most important rule). - 3) If initially successful; pyramid your buying up. - 4) Stay in cash during a Bear Market. - 5) Never argue with the Stock Market; it is always right. - 6) Concentrate your stock buying and watch your stocks closely. - 7) Do not over diversify. - 8) Read the investment classics by Jesse Livermore, Gerald Loeb, Benard Baruch and Nicolas Darvas. They are the pioneers in this field and the teachers that William O'Neil discovered after reviewing over 2000 stock investment books in the early 1960's. Only few authors such as Jesse Livermore and Gerald Loeb were deemed worthwhile. William O'Neil learned their methods, added some of his findings and crafted their wisdom into a complete and effective but complicated system called CAN-SLIM. - 9) Keep your ego in check. Stay objective. Don't celebrate too much when you win; Don't get depressed when you get losses. - 10) Keep your gains big & Keep your losses small. - 11) Buy high and sell higher (very counter-intuitive !) - 12) High diversification of stocks ensures mediocrity; Concentration in the right stocks leads to large gains. - 13) Yearly gains of 20 - 100 % are possible in strong Bull markets while in Bear Markets your capital is preserved.- I have also subscribed to the Wall Street Journal (WSJ) for twenty (20) years. But the WSJ does not provide the information that is in IBD. IBD is unique and is an investment education conduit for people who are active learners and who wish to increase their net worth significantly. - The WSJ has some good in-depth articles on business news but doesn't inform the small investor when to be in or out the market or how to pick the best growth stock leaders. This is the gap which IBD fills ! I am convinced IBD is by far the more valuable newspaper for the small investor. - Effective use of the IBD tools is like a financial light sabre that will allow you to make significant financial gains especially in the first year of a strong Bull Market. - These methods are for those who do not mind hard work. You must be able to learn from your mistakes and be tenacious in learning the complexities of the Stock Market. If you are looking for an easy way to make significant money you need to look elsewhere. You will not be happy trying to learn very complex and counter-intuitive concepts. If do you pursue this study; it will probably take you at least 2 years to learn CANSLIM well. It is an art as well as a science. - What about actual results ? I am a Chief Engineer in Aerospace and the skills and knowledge I have picked up in the last 5 years with O'Neil's system has added about $100,000 each year to my savings since 2006. The time I spend on it each week is about 3 to 4 hours so it is like having a second job. I have not quit my day job but with the extra savings I have more peace of mind and with three children to send thru college in the near future I am confident I will be able to do so. In short - I may not be on easy street yet but I feel like I am out of the salt mines. This CANSLIM approach has worked well for me and I hope to improve my skills in it by continued study. I plan to get better at this. This system does work well. - Thank you Mr. O'Neil......you are a great teacher and wonderful philanthropist for the small investor. Highest recommendation for you, the reader to use this system to make money in the stock market. -

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