The Great Investment Books You May Not Have Heard Of (Part 1)

There's a wealth of knowledge for investors hidden in the pages of books that haven't become all-time best sellers like The Intelligent Investor. Here's several that I not only found insightful on first read but also found myself referring back to from time to time.




Quality of Earnings - Thornton L O'Glove

Scrutinising financial statements is a core skill for fundamental investors and this book, written back in 1987 by a veteran analyst who turned his curiosity as a stockbroker (meaning he reviewed disclosure documents) into an institutional advisory service scrutinising financials and "telling people what stocks not to buy". O'Glove walks the reader through some colourful stories of company attempts to cover-up or gloss over deficiencies. It takes a talented writer who has mastered his craft to explain how to read accounts and what trickery to look out for and still keep the reader engaged. From time to time I've wondered about following down O'Glove's path and establishing a similar "Quality of Earnings" advisory service in Australia.


The Art of Execution - Lee Freeman-Shor

What a privileged position to be in. The author handed out allocations of between $US25m and $US150m to 45 of the "world's top investors" with one clear mandate - each investor was to only deploy the capital in their 10 best ideas. You don't need to buy the book to learn that most of the best ideas lost money - but Freeman-Shor digs deep into the strategies that resulted in these investors making strong positive returns anyway (and into the flaws of those that were less successful). 


The Hard Thing About Hard Things - Ben Horowitz

The successful Silicon Valley entrepreneur and venture capitalist offers some great perspective on what it is like on the inside of a business that is trying to grow and please investors. The quote from Baidu CEO Robin Li about the firm's IPO pricing is gold - Li was prepared to deliver results that justified a modest valuation uplift from the IPO price but the market immediately took the stock up 4.5 times and forced him to change his perspective.


Quantitative Value - Wesley Gray

This book sets out a framework by which the modern investor can use compute power to aid a fundamental, value focused investment process. A quote from John "Singo" Singleton isn't a bad way to set the scene for a book that is all about number crunching. Value investing gurus Graham and Dodd are paid their dues.  Then we get into cognitive bias, behavioural finance and luck. "The objective nature of the quantitative process acts both as a shield and a sword," Gray tells us before launching into rigorous research to identify the best metrics and how to combine them to identify value investment opportunities.


Part 2 to follow...


Photo by Tom Hermans on Unsplash

Popular posts from this blog

Forget EPS accretion and focus on value!

10k Words - December 2020

10k Words - May 2020

Disclaimer

Nothing in this blog constitutes investment advice - or advice in any other field. Neither the information, commentary or any opinion contained in this blog constitutes a solicitation or offer by Equitable Investors Pty Ltd (Equitable Investors) or its affiliates to buy or sell any securities or other financial instruments. Nor shall any such security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.

The content of this blog should not be relied upon in making investment decisions.Any decisions based on information contained on this blog are the sole responsibility of the visitor. In exchange for using this blog, the visitor agree to indemnify Equitable Investors and hold Equitable Investors, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to legal fees) arising from your use of this blog, from your violation of these Terms or from any decisions that the visitor makes based on such information.

This blog is for information purposes only and is not intended to be relied upon as a forecast, research or investment advice. The information on this blog does not constitute a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Although this material is based upon information that Equitable Investors considers reliable and endeavours to keep current, Equitable Investors does not assure that this material is accurate, current or complete, and it should not be relied upon as such. Any opinions expressed on this blog may change as subsequent conditions vary.

Equitable Investors does not warrant, either expressly or implied, the accuracy or completeness of the information, text, graphics, links or other items contained on this blog and does not warrant that the functions contained in this blog will be uninterrupted or error-free, that defects will be corrected, or that the blog will be free of viruses or other harmful components.Equitable Investors expressly disclaims all liability for errors and omissions in the materials on this blog and for the use or interpretation by others of information contained on the blog.