Ben's Book Review

Before I even started trading I read a few books to get started and continue to read others to try and learn even more. I will basically summarize a book, give my opinion on if it is worth reading or not.

The Little Book That Beats the Market.
By Joel Greenblatt

This was the very first book I read on investing and stock picking. This is a great book for those just starting out and learning how to value stocks. It describes the concepts of valuation in very easy terms since he wrote the book to be readable by younger kids as well. Up to that point I had ideas on valuation, but this book gave good easy examples on picking stocks that were undervalued. The book basically referenced a "magic formula" which is basically high return on equity, high earnings yield and getting companies with little to no debt. His even setup a website www.magicformulainvesting.com for free and a few stocks I picked from there that I still watch would have yielded great gains(50%+). It is supposedly backtested to have returned 29% annually over 30 years.

I recommend this book for beginners just learning about stocks and valuation, very worth it.

Real Money: Sane Investing in an Insane world.
By James J. Cramer

Jim Cramer of Mad Money fame wrote this first book on investing. This book covers some good disciplines and has some good advice on how to pick stocks given the time in the economic cycle. Gives pretty solid advice on diversification and when to take risk. Gives good examples and also teaches about how to value stocks. It is easy to read and written in a fun kind of tone, if you have watched Mad Money you can see the personality come through in the writing.

I recommend this book for beginners learning about diversification, risk tolerance and economic cycles.

Mad Money: Watch Tv, Get Rich
By James J. Cramer

The second in his series of investing books, basically builds on Real Money with some good additions and newly found insights. Also talks about his show a little as well. One nice thing is it gives you a template on how to do homework on the stocks you are looking at to see if they are good candidates.

I would recommend this book if you have already read Real Money.

Confession of a Street Addict

By James J. Cramer

This is basically the history and background on Jim Cramer and how he got to where he is today and some of the interesting things that happened to him. I actually enjoy books like this because I like to see the history of those that became successful and how. Cramer is a talented writer, since he originally was a journalist, and the book is very entertaining.

I recommend this book if you are a fan of Cramer, it is well written and gives a great account of his journey to wall street and making money.

Seven Years to Seven Figures
By Michael Masterson

The only good information I got from this book was that if you want to make money and become a millionaire it must become your primary goal. I took this advice and hence started educating myself on the market and options. The rest of the book is worthless, you just get these stories from people that "did it" even though you have no idea how much they even started with. Page 40 basically tells you "it takes money to make money".

Do not waste your money on this book, I have given you the only valuable piece of information from it.

All About Option

By Thomas McCafferty

This is a good book for those looking to get information on options and different basic strategies to use. This will give you a good definition of options and will explain how they can be used more in depth. However this information is pretty much available online all for free.

Good for an intro to options but all the information can be found online from places like investopedia for free.

The Way of the Turtle

By Curtis Faith

Curtis Faith was supposedly the most successful of the "Turtles" a sort of experiment taking people with certain characteristics and seeing if they could be turned into good traders. This is a somewhat entertaining book, the story gives some good examples of why he succeeded and others failed, similar to the real world where 9/10 people fail to trade successfully. Basically the "secrets" of the turtles, are the usual let your winners run, cut your losses short. Add to positions if your position is being successful, only risk a finite amount and don't trade on emotion. Also, highlights the helpfulness of Technical Analysis.

Again another book to see how one person became a successful trader which I find interesting. I basically gave you the secrets and general themes, which should not be taken lightly because they are correct and should be followed if you wish to be successful.