UPDATED: Trading Rules, Aphorisms & Books
Last month, we put together a full run of Trading Rules & Aphorisms. In the intervening weeks, I discovered I overlooked quite a few lists that are on the site.
Here is the updated version:
• Livermores Seven Trading Lessons
• Bob Farrell’s 10 Rules for Investing
• James Montier’s Seven Immutable Laws of Investing
• John Murphy’s Ten Laws of Technical Trading
• Six Rules of Michael Steinhardt
• Art Huprich’s Market Truisms and Axioms
• DENNIS GARTMAN’S NOT-SO-SIMPLE RULES OF TRADING
• In Defense of the “Old Always” (Montier)
My (Ritholtz) own rules
• 15 Inviolable Rules for Dealing with Wall Street
After this run, I plan on updating this list every quarter . . .
Books after the jump
Then go to these books — they cover trading and markets generally:
• Stock Market Wizards : Interviews with America’s Top Stock Traders by Jack D. Schwager
Schwager interviewed market legends at the height of their success. What makes the book so worthwhile are the consistent themes that evolve from currency traders, mutual fund managers, commodities traders, hedge fund managers. Regardless of what is being traded, there are related motifs that run throughout.
What results is not a “How to trade” book; instead, it is a book about “How to think about trading.”
• The Investor’s Anthology: Original Ideas from the Industry’s Greatest Minds by Charles D. Ellis
Instead of interviewing famed investors, Ellis gathered their best writings into one collection. He ends up with a series of short chapters by luminaries of days gone by. There is something worthwhile on just about every page. This is another favorite worth rereading every few years.
• Bull: A History of the Boom and Bust, 1982-2004, What drove the Breakneck Market — and What Every Investor Needs to Know About Financial Cycles by Maggie Mahar
The best book about the 1982-2000 market, bar none. There are a surprising number of lessons buried in these pages that will reward the careful reader. I found it both fascinating and informative.
• How I Trade and Invest in Stocks and Bonds by Richard Wycoff
Quite simply, this is one of my favorite books on the markets and investing. The fact that it is from 1923 is totally irrelevant.
Another good book is When to Sell by Justin Mamis. Published in 1970s, it is filled with good observations about developing a sell strategy.
If you want some book ideas for Technicals, have a go at these:
• Technical Analysis of the Financial Markets by John J. Murphy.
• Technical Analysis from A to Z by Steven B. Achelis;
• Encyclopedia of Chart Patterns by Thomas N. Bulkowski;
• Japanese Candlestick Charting Techniques by Steve Nison;
Don’t think you need a full reference library; any pair of these books should do.
Last, there are a full run of books here:
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April 8th, 2011 at 9:46 am
I did go back to one of the earlier links and saw that you had Ben Graham’s, “The Intelligent Investor” but don’t see Graham and Dodd’s “Security Analysis” anywhere. I presume this is just an accidental oversight, correct? It has provided a lot of us with the wisdom to craft successful portfolios without relying on weird chart theory.
April 8th, 2011 at 10:04 am
Dunno about Security Analysis for the average investor,
I understand the value it has, but I am not sure if that book adds usable value to mom and pop investor
April 8th, 2011 at 10:32 am
A precious contribution for your list, from an old master:
http://trendfollowing.com/whitepaper/Dickson_G_Watts-Speculation_as_a_Fine_Art-EN.pdf
April 8th, 2011 at 11:30 am
I feel bad for Michael Steinhardt for being associated with the other amateurs here… Gartman?
I mean Steinhardt is an actual investing legend, even if he is not quite tier 1 anymore.
I would include the books by Buffett or good ones about him. The Fischer books… both father and son are actually quite good for laymen. The original Joel Greenblatt book… “You too can be a stock market genius”. Its a good one for special situations and contrarian thinking (when everything sounds really bad… you invest) and again, is built for the casual investor.
Plus all those guys are successful investors. Beware! of reading guys who get paid for writing.
April 8th, 2011 at 11:40 am
There’s only one Book. And we need It in the classroom…
http://news.sciencemag.org/scienceinsider/2011/04/bill-allowing-teachers-to-challenge.html?ref=hp
… to beat the Chinese and the other nations that are developing their scientific skills, this will win that economic war for us.
I’m delighted for any tax dollars of mine that go to this, ultimate investment. An investment in the future. an investment in the madrasses… er… a.. homeschool-bound er… a… educated, good people of Tennessee.
Go GOP, you’re our future.