Investing especially in the stock market has become the preferred mode for passive income with Sensex falling more than 2000 points the fear to invest has just increased to a new level.
So here are some of the top 5 best investing books of 2022 which can help you kickstart your investment career.
best stock market books
The stock market is a device for transferring money from the impatient to the patient.
This year for me has all beings about investing & politics. I have read dozens of books on the above top topics.
Summary.
Dealmaker is an autobiography cum investing lesson by Guy Hands.
I had zero ideas about who this guy is, so here is what Google had to say about him. "Guy Hands is an English financier and investor.
He is most notable as the founder and chairman of Terra Firma Capital Partners, one of the largest private equity firms in Europe".
Private equity is different from the public market where shares are brought and sold.
In private equity, a firm directly buys shares of other companies and provides the company with all the professional services which can help the company to achieve success. The money comes from investors and HNI ( high network individuals).
Guy had dyslexia and was bullied a lot in childhood.
He was put in a special boarding school; where he found his true passion for investing and deal-making.
From then on he joined Oxford and then Goldman Sachs in 1982.
The book shows how he made various billion-dollar deals and there was only one deal that made him almost bankrupt which was of 5.4 billion pounds European buyout fund. _____________ Conclusion
The life of the author was a big rollercoaster ride.
I was most inspired by his childhood stories of him dealing with dyslexia and the treatment of below-average students by his teachers & friends something I have to face.
I found the book refreshing because it provided insights into what was happening behind the scene and the enormous stress and risk-taking that such success requires.
Real knowledge is to know the extent of one's ignorance.
The book has been on my tbr for a long time. I felt this book will bring my interest back in the stock market and it proved to be true.
The wonderful quotation of Charlie and Warren Buffett with simple and jargon-free language makes this book a fabulous read for anyone who is a beginner and wants to understand the stock market.
I would suggest this book to all beginners please read this book before you read anything else it is a short and simple book.
It concentrated on 4 aspects of investing
1. Treat a stock share as proportional business ownership. 2. Buy at a significant discount to intrinsic value to create a margin of safety. 3. Make a bipolar Mr. Market your servant rather than your master. 4. Be rational, objective, and dispassionate...
You may not understand the terms right now which I also didn't but as you will read the book you will begin to connect the dots _____________ CONCLUSIONS
This book by Tren Griffin is phenomenal, It gives a good profile of Charlie Munger and his investment philosophy.
It stresses the importance of having a good understanding of various disciplines like psychology, strategy, finance economics, etc.
The chapter on "human biases and Misjudgements" is worth the whole book.
This is a must-book for all budding investors.
It is written by one of the most successful investors in the world, his return was more than Warren Buffet too.
In this book, the author shares many tips about life & work in his short autobiography.
Ray Dalio is the founder and co-chairman of Bridgewater Associates, which, over the last forty years, has become the largest and best-performing hedge fund in the world.
"Principles" is written by him at the age of 70. In the books, he shares some of his lifelong lessons and principles which he had obeyed his entire life and which made him a billionaire. _____________ SUMMARY
The book is divided into 3 parts- Childhood, Life principles & Work principles.
All three parts were very valuable but the childhood part was much more special for me.
The reason is that the way he was brought up played a big role in his life, the choices he made defined him today, and finally mistakes made him what he is today.
He was on top of the world in 1982 but then he made some misjudgments about the markets and was quite arrogant to acknowledge it, the result was that from being a top investment manager he become bankrupt unable to even buy an airline ticket.
Such a harsh time taught him the value of patience & humility which he goes on to share in his next part
Some principle are as follow
1) Seek out the smartest people who disagreed with me so I could try to understand their reasoning. 2. Know when not to have an opinion. 3. Develop, test, and systemize timeless and universal principles. 4. Balance risks in ways that keep the big upside while reducing the downside. _____________ CONCLUSIONS
The big advantage is that the book is written by Ray himself, unlike third-person writing which is very boring for me.
For the first time, you can see through a brain of a billionaire. He doesn't only share his own set of principles, he tells you how to build your own set of principles by embracing your reality and your world.
The author has done a good job of capturing almost everything he seems to have encountered and penned it down in quite an articulate way.
He who conquers himself is the mightiest warrior".
Don't assume this book is only about investing, it has detailed psychology & biological evolutionary facts in it. I believe everyone should read this book once.
The book begins with the theory of sociology & Psychology which are the core of investing.
We spend so much time studying formulas & concepts but hardly give time to understand our most potent minds.
The book has so many great concepts, it will not tell you how great you are which most books say, but will show you your limitation as a human and how to accept & go beyond them.
The author has divided the entire investor psychology into 4 parts- ego, conservatism, attention& emotion, every part is illustrated in detail and with examples.
Homeostasis is a term that shows that our mind & body are connected, if you feel lazy, anxious, or depressed the majority of times the reason behind it is your body, not circumstance.
If you take care of your body then your mind will automatically stay healthy.
My favorite chapter was on "EGO" which the author portrayed so beautifully, He goes on to tell about our biases & prejudices in great detail.
Once a particular myth or superstition is set in our mind it is then very difficult to eliminate it, people will die or will kill others but won't question their belief.
Hence it is important to have a questioning mindset and to understand our limitations.
The book talks about why people make certain decisions.
He (the author) says that to understand the way of trading or investing, we must first understand the minds of those people that created that art (Investing).
I enjoyed the books, the example author has portrayed makes things easier to understand and fun to read.
_____________
The surest way to ruin a man who doesn't know how to handle money is to give him some.'
The book is about understanding various financial concepts within the business. _______ Summary
The book is based on important financial rules.
Rule-1) Never invest your money unless the assets you acquire can generate the money equal to the cost you acquire.
Rule 2) invest in such a way that your asset will generate an inflow of funds before liability demands outflow.
Both the rules are related to running a business. The first one tells us about WACC (Weighted average cost of capital) which is the total of liabilities that should be less than the return you get from the purchasing assets.
Suppose your WACC is 16% then you should not purchase any assets which give you less than 16% per annum returns.
The second rule is much more important than the first one since it says that a return should come before your liability demands outflow.
Both rules are not at all rocket science but are based on simple common sense however the majority of businesses fail in this regard.
Businesses can have a great idea, the best marketing environment, and hard-working people but if they don't have the financial knowledge of running a business they will be doomed to fail.
In this book, you will learn that there is no such thing as a non-Finance person.
It's a misconception that Finance Management happens in the Finance Department. It is happening right through the organization. _____________
Conclusion.
This book is a must-read for those who want to start a business or for an equity investor.
This book helps an investor to calculate the Valuation of a company through its financial statements.
It's strictly based on companies' evaluations and not individual financing.
The way he writes his book in a story format for a topic like finance is one thing that attracted me a lot. _____________