Only three books that matter | stockbee


Only three books that matter

Lot of readers had asked me about recommended books. I have read most books on market. In a typical year I read almost every book published on markets. There are parts of book or one paragraph or one sentence in some book you find useful. But most books are not worth a second look.

Now specifically if you are looking to outperform the market by wide margin, then my book recommendations might be helpful. The three books I mention will give you a enduring conceptual framework to build very profitable trading strategy if you internalise the concepts in them.

Superperformance stocks

At the heart of this book is a concept to identify stocks which go up 300% or more in two years. The book offers the best explanation for what drives such moves and how to identify such stocks early in their price growth cycle before they make those substantial moves.

The Hedge Fund Edge

This Mark Boucher book has two parts to it. The first part discusses the Austrian School of economic thought and how it leads to boom and burst.
The second part of the book discusses a stock trading strategy based on earnings and price momentum.
The book has a complete strategy to trade stocks and it details it in microscopic detail with every single element spelled out. It also offers a very profitable strategy for short term traders.

How to Make Money in Stocks
William O'Neil book is another book which essentially details a earnings and price momentum based trading strategy.
I would recommend going through all his old editions also because that gives you an idea about how some of his thinking has evolved.

These three books are the only books which I reread every month. They offer essential ingredient to substantially outperform the market.

Besides these three books there are couple of methodologies which you can study which can help you further fine tune your earnings based strategies.

I am not recommending Value Line, but what you must understand is why it works and what is the central principle behind it.

Again I am not recommending trading the Zacks approach, what is critical is to understand the central hypothesis and principle behind the method. Zacks founder have written a book about it, the book gives you a good insight in to their approach. The only problem is 99% of the book is extended marketing campaign for their services.

Dan Zanger
Dan Zanger has written extensively about his method. If you subscribe to his service, you can see all the past issues. If you go through all of them, you will get a very good idea of what he does and why it works.

The central theme behind my recommendation is study methods of traders who had triple digit plus returns for a long period of time in some stage of their career. Why focus on people with 10 or 20% returns if you aspire for higher returns early in your trading career when you want to aggressively build your account.


Prashant said...

Do you know of any book from which I can get an insight into how the instituitional investors and hedge fund managers think and operate?

Bernard said...

Pradeep. thank you for the book recommendations. I have ordered 2 of them from Amazon in England. The Richard Love book I could not locate. Any ideas who would sell it?

Pradeep Bonde said...

There is no single book which will give you that information because they do not use same approach.

It is out of print but Amazon USA has many sellers selling used copies of it.