Book Recomendations for Technical & Fundamental Investing?

[sdiguana]

My dad has offered to start teaching me to invest, he has suggested that I get a book on technical investing (candle stick charting was his preference) and start there.

Nison's book is retardedly expensive, 60$ for kindle?!?! Really?? I will need to purchase the books I go for, as my work situation is very transient, and does not work well with libraries. (the pay makes up for having to buy my books)

I like kindle over paper, as I don’t have to have more ‘things’ taking up space. But if the best book I can go for is paper, then so be it.

If Nison really is the best, then I can certainly afford it, but if someone else is 99% as good for $20, then why waste the 40?

In regards to fundamentals .. ill take any suggestions you can give, I’ve not had any suggestions for that side yet.

Thanks!

[hodedofome]

If the standard technical analysis/chart pattern/candlestick books are too expensive for you, Charting and Technical Analysis by Fred Mcallen was the first book I read on the subject and is a decent primer. It's not extensive, but it's only $6 on Kindle and goes through the most popular chart patters, candlesticks and indicators. You certainly won't know how to trade after reading it, but it's a good intro.

You'll have to decide how much you want to invest in your education. Books are the cheapest part of learning to trade. You'll have plenty of market losses in the meantime that dwarf whatever you spent on books. If $60 is too much for a book (that represents the standard of the particular topic) then perhaps you may want to reconsider learning how to trade. Just being honest. I try to read at least 1 trading/investing book per month (I've got a full time job, wife and kids so not much free time) and buy at least one from Amazon each month. I use my fun money, birthday money and christmas money to buy books. I don't ask for gifts anymore, just money so I can buy more books. I suppose I've read over 40 trading books since late 2011, and I know guys that have read hundreds and a few that have read thousands.

Here's a post that I wrote on another thread:

Generally I would recommend to folks that just want to touch their investments no more than once a year, to read stuff by William Berstein, John Bogle, Rick Ferri, Larry Swedroe, David Swensen, and others. Unfortunately (or fortunately), 'putting it all in index funds' is the best that most people can do. And it's the best advice you can give most people. They should spend their research time figuring out an intelligent asset allocation, and then get on with their lives to make as much money as possible to put into their portfolio.

But if you are curious, and you want to get a little more advanced, Mebane Faber writes some good stuff that's easy to understand. The Ivy Portfolio, his relative strength research papers on SSRN, Shareholder Yield and Global Value are all good books.

If that's still not enough for you, and you want to really go down the rabbit trail of active investing/trading (assuming you've already gone through the basic investing books above), then here you go:

Talent is Overrated by Geoff Colvin - this will tell you the effort you'll need to give to be the few % that actually can outperform the market

Michael Lewis and Jack Schwager are both good authors that cover the industry as a whole and make for entertaining reads, especially Schwager's Market Wizards books.

Value Investing authors:
Benjamin Graham
Philip Fisher
Joel Greenblatt
Whitney Tilson
Peter Lynch
Warren Buffett's letters to shareholders
David Einhorn

Growth/Momentum stock trading authors:
Jesse Livermore
Nicholas Darvas
William O'Neil
Martin Zweig
Stan Weinstein
Mark Minervini

Trend Following/Global Macro authors:
George Soros
Michael Covel (his podcast is fantastic and has a variety of guests - economists, psychologists, authors, entrepreneurs, traders, value investors, portfolio managers etc, I'd recommend listening to all the past episodes)
Andreas Clenow
Curtis Faith

Trading/Investing Psychology authors (this is actually the most important):
Brett Steenbarger
Mark Douglas
Van K Tharp
Ari Kiev

Technical Analysis/Chart Pattern authors:
Robert Edwards/John Magee
John Murphy
Steve Nison
Jeffrey Hirsch
Robert Prechter
Peter Brandt
Alexander Elder
Thomas Bulkowski

That should be enough reading for the next couple of years...

[surfhb]

Charting is on par with going to a psychic for stock picks in the long run.    Read books by Ferri and Swedroe if you'd like the details.   

Instead of trying to beat the street why not just invest in the street with index funds?   80% of the best and brightest wall st investors don't beat the indexes over the long run so what makes you think you can?    If it's just fun money you're learning with then that seems prudent.

My moment of clarity was understanding that the stock market is way too big and complex.   I have other things I need to do with my time.   

In other words, just being average in investing is pretty darn good

[hodedofome]

Charting is on par with going to a psychic for stock picks in the long run.    Read books by Ferri and Swedroe if you'd like the details.   

Instead of trying to beat the street why not just invest in the street with index funds?   80% of the best and brightest wall st investors don't beat the indexes over the long run so what makes you think you can?    If it's just fun money you're learning with then that seems prudent.

My moment of clarity was understanding that the stock market is way too big and complex.   I have other things I need to do with my time.   

In other words, just being average in investing is pretty darn good

Nothing, including charting, can predict with certainty the future. But you don't have to know what's going to happen next to make money in the market. Plenty of guys that do beat the market use charts to help them make money, so to pass it off as hocus pocus is ignorant.

It is true that most won't transform themselves into becoming profitable traders/investors who can beat the market. It's not easy which is why most fail.

[sdiguana]

Thank you for the book recommendations. In regards to cost, I was more offended that the guy (nison @ $60, for kindle ed) wanted so much for some ordered electrons. If he is worth it, fine. But I was questioning if it was just a branding type thing vs actual value.

Why learn active trading? My dad is an active trader, and has done incredibly well. He offered to help guide me and teach me over the next year what he knows. I’d be a fool to say no thanks; I’ll stay with vanguard. That said, I’m also not putting my entire portfolio into an active-trading account. I figure a few week’s savings is plenty to play with and learn, and as I get more experienced, then maybe I start increasing my savings allocations to it. My savings rate is 90%, so even if I fail miserably, numerous times, I shouldn’t hurt FIRE dates all that much in the grand scheme.

I feel it’s my responsibility to go learn the basics so that I’m not asking things that can be answered in 5 minutes of my own research, hence asking about the best books.

I actually will probably go through 1-3 books a month, I’m working on contract away from my wife and dogs, so when I’m not working/sleeping my options are read about investing or teach myself programming.

[deborah]

See what the library has.

[ijingle]

All you need to know about candlestick investing can be learned by playing chartgame.com. Good luck.

[hodedofome]

Do you know what style your dad's form of trading is? Trend/momentum, value investing, seasonal, countertrend, etc. And what instruments he trades? Stocks, bonds, commodities, currencies, options etc. I could point you to some basics for those, or your dad may have a few favorites of his own.

[sdiguana]

@hodedofome: I forwarded your question to my dad, here is the response:

Stocks, options and ETFs.
1) Generally trend/momentum with a dash of market timing
2) Leveraged ETFs, both long and short
3) Longer term with value investing
4) A few blue chip dividend producers

the young iguana should get the basics of technical trading (including candlesticks) and fundamental trading.  Then work in the direction of understanding options.

[hodedofome]

Ok, yeah I'd recommend Edwards and Magee and Steve Nison as their books are considered the Bible of chart patterns and candlesticks. They may be expensive as far as books go but they are foundational for technical trading.

For the value investing, start with Benjamin Graham and Philip Fisher, and read all of Warren Buffett's letters to shareholders.

That should get you started with the basics.

Then read Reminisces of a Stock Operator and How to Trade in Stocks by Jesse Livermore, How I Made 2 Million in the Stock Market by Darvas, How to Make Money in Stocks by O'Neil, and Mark Minervini's book. That should give you a good foundation in momentum stock trading.

[BubbaMc]

What you're asking about is trading, not investing. Not sure if here is the best place to ask.