5 Best books for Trading and Investing
I have started trading in the year 2008, back then just like every beginner, the only person I know related to Stock Market was Warren Buffet. No one else, I just used to read about his quotes, his investment styles. I wanted to start with reading some book, so was searching over the net.
In every online forum people were recommending one book. It was The Intelligent Investor. I just started it and couldn’t even complete few pages. Though this is one of the finest Investing book out there, I realized investing or fundamental analysis is not my cup of tea. Its been more than 10 years, still this book is there in my shelf left untouched.
Then I stumbled upon a book called One Up On Wall Street by Peter Lynch. I was able to finish reading 2 chapters before my Night shift was over. (Back then I was working at Infosys, supporting Bank of America client, so I use to work in different shifts)
This book emphazied the importance of observing everything happening around us,
which toothpaste do my friends buy, was it Colgate or Dabur?
Which Aata my mom prefer? Was it Pillsbury or Aashirvad aata?
Who is hiring most no of freshers? TCS or Infosys?
Now I ignored watching all stocks like LT, BHEL, NTPC etc, all those stocks whose business I dont understand. I just concentrated on stocks like ITC, DABUR, the products that we use on day today basis. Every time I go to super market, instead of checking the manufacturing date or expiry of the product, I was so obsessed in finding the name of the manufacturer, to which brand it belongs to, is the company listed in stock exchange?
But even this book was not enough for me, I was looking for something else. I realized that as a beginner, all i was looking for not a book that consists of tons of information, rather I was just looking for a success story. What is the odds of someone who do not know anything about Stock markets, made it big.
Then I came to know about a Dancer who made fortune in market through trading, until then all i read was, Investing will make you reach, stay invested, it takes years to make profits.. blah.. blah.. but Here’s there is a guy , who know nothing about markets, but he made $2 fuckin’ million dollars.
The book is called How I made $2 million Dollar in stock market by Nicholas Darvas, it was like love at first sight for me, from the very first page I was hooked. Gave all the attention to the book that night(again i was working in night shift), i almost missed a priority issue and got nicely from my Team Lead next day, it was so interesting and easy to read, as it did not have any complex jargon, much easier to understand for any beginner, I finished that book the same night. The book explained a simple trading system Darvas was using, until then I thought only complex mathematical algorithm can make returns in trading. But this book laid a strong foundation in my mind, that Simple things do work in Trading.
Now my mind completely shifted from Investing to Trading, so I decided if there is another book that I want to read, it should be from Traders only. But I couldn’t find any other success story book. Then I read a article that was about a book called The Market Wizards by Jack Schwager.
It was basically a Interview collection of worlds best Traders. Learning from your mistakes is costly and time consuming when it comes to Trading, but learning from others mistakes will cut short your learning time period. So I bought this book, it was fantastic, every trader was unique with their trading style, and one similarity among all these traders were , everyone has blown their account at least once. So much of information from this book, really helped me in many ways.
All the books I mentioned above, I read during my initial trading career. If there is one book that I read recently which I loved the most is The Man Who Solved the Market
Many years before when I started with Algo Trading in 2014, I read an article about a Math guy called Jim Simons. The first line I read about him was ‘A Math guy, who is running a hedge fund called Renaissance Technologies that has made great returns year after year for decades with very lesser draw down. Next few days, I spent so much time in gathering whatever information i could get about Jim Simons. I read all the forbes articles, Quantocrazy articles and even all the Jim Simons interviews. There was so much of wisdom from his interviews.
When every fund manager is finding it difficult to beat the index, how could Renaissance Technologies able to make such stellar returns for multiple years, I got very curious, I was not interested in their trading strategies( obviously they are not going to share it) but I wanted to learn the thought process of Jim Simons who is running one of the greatest Hedge fund in the world. But Rentech is so secretive, you hardly find any information about them online.
I badly wanted to know more about Rentech, then after 5 years, I came to know that Gregory Zuckerman who wrote the Book, The Greatest Trade Ever which is about a Hedge fund guy called Paul Johnson who made billions due to 2008 Global Financial crisis. This book was all about how one Guy made all the gains when the entire world was in recession.
Fantastic narration, I loved the book. So when the same guy is writing a book about Jim Simons, I was very excited. The moment, it was up for sale, I order it from Amazon US and bought it, couldn’t wait till its launched in India. The book started from the early phase of Jim Simons, how they failed Initially and why they gave so much importance to data, how did they control their drawdown to a greater extent, everything was covered in the book.
The main success behind Rentech, is because of the size of the clean data they have, its very huge and their team who do not have any bias about Markets, all they believe in is their data. Nothing else.
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