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A Reading List Worth More Than a $230,000 Wharton MBA

Growing up in a poor household with a mother from South America, we struggled just to pay our bills. The idea of "saving" – or even more crazy, "investing" – was as foreign as flying a spaceship.

My mother was just trying to keep us out of bankruptcy (we still filed twice), and we had no family whatsoever in the U.S.

The first time I learned about investing or stocks was sometime during my sophomore or junior year in high school.

It appeared to me to be a fascinating exercise where you could use your brain and figure out how to make money – and potentially, a lot of it. Given where I came from, that was an exciting prospect.

My first real experience with stocks was a stock-picking contest during my junior or senior year. I won the contest... and I was hooked.

This was a big driver for me applying to – and being accepted at – the best undergraduate business program in the world: the Wharton School of Business at the University of Pennsylvania.

There I was surrounded by fellow students who – like me – had decided that they wanted to make investing their life's work. Many of them had grown up with parents and families working in the business.

I didn't have that background... but I always was a voracious reader. To me, reading was a way that I could benefit from the experience of others even when I didn't have first-hand access to it.

Over my first few years at Wharton, even though I had considerable classwork and a newly found social life, I read dozens of books – basically everything I could find on the subject of investing.

While I was learning a ton about the building blocks of economics, accounting, and finance at Wharton... I wasn't being taught much about actual investing. Instead, I was learning from my older classmates and an investment club called the Pennsylvania Investment Alliance. That was where I got my original reading list.

After five years at Wharton (and three majors), I learned a ton and – just as important – made incredible relationships that would power my career for the next 30 years. Reading those books, though, was how I learned the most about investing.

Accordingly, I want to share eight books that are a great place to start in terms of reading as an investor. There are obviously many more books out there. But I think that with just these eight, you're off to a great start... and might even have 90% of what you need to know.

Older readers will remember the name Peter Lynch, as he was one of the most famous money managers of the 1980s. He led the Fidelity Magellan Fund and posted a more than 29% annual return – consistently more than double the annual return of S&P 500 Index – during his 13-year tenure. 

One Up on Wall Street was originally published in 1989, and Lynch does a great job of combining common-sense analysis that anyone can understand with core investing concepts. 

While not the most sophisticated book on this list, this one is the best for a new investor and for understanding the ins-and-outs of investing. If you were stuck on a desert island (with an Internet connection to trade stocks!), One Up on Wall Street would be the top book I'd recommend. (Lynch's follow-up – Beating the Street – is also great.) 

I ranked Lynch's book No. 1 because it's the best place to start... but How to Make Money in Stocks is a much better book on investing. 

William O'Neil is the founder of investment newspaper Investor's Business Daily, and his book does the best job of figuring out ways to make money. 

O'Neil isn't bothered by traditional investing frameworks. Instead, he worked backwards from what he saw working in the stock market. He looked at the stocks that produced the greatest returns over time and then figured out what they had in common. From that analysis he developed an investment system that's easy to understand and employ. 

As many of you know, I believe the investing style that really works is growth... and O'Neil fully embraces this approach. 

  1. What Works On Wall Street, by James O'Shaughnessy 

Similar to O'Neil, O'Shaughnessy takes a pragmatic approach to pure money- making. His data-driven approach focuses on results, with a ton of depth to the analysis. 

This combined with O'Neil's book makes an incredible one-two punch when figuring out how to invest. 

This is a very different approach, where Schwager went out and interviewed some of the most successful traders and investors. The result is the third (released in 2001) in the Market Wizards series after Schwager's first book, Market Wizards (1989), and follow-up, The New Market Wizards (1992). All of them are worth a read... But if I had to choose one, Stock Market Wizards one would be it. 

Interviewees include Michael Steinhardt, Paul Tudor Jones, Bruce Kovner, and more. There is a ton to be learned from their real-world experiences and a lot of trading "rules" to be gleaned from their commentary. 

As some of you may know, I'm not a big believer in "value" as an investment strategy... but I am a huge fan of contrarianism. Although Dreman is much more focused on value investing, his core precept focusing on contrarian opportunities is a strong one. 

There are also a ton of great lessons in analysis and psychology here that are useful for investors. Most importantly, Dreman does a great job of debunking the "efficient market hypothesis" with real-world applicable investing strategies. 

  1. The New Money Masters, by John Train 

This book is similar to Schwager's Market Wizards series, but goes back farther in time – Train published his first tome, The Money Masters, in 1980. Investors profiled include Benjamin Graham, Warren Buffett, John Templeton, and others. 

The New Money Masters is less trading-oriented and gives some great historical context, explaining how lessons learned from 50 years ago are still applicable today, even if the environment has changed dramatically. 

  1. The Alchemy of Finance, by George Soros 

This is different from any of the other books, as it was written by one of the greatest investors of all time. Soros gives a highly intellectual approach to the markets along with some great historical stories – he has some of the most powerful insights into the markets of any investor in history. It's a little tougher of a read... but well worth it. 

  1. The Money Game, by Adam Smith 

Finally, the oldest book on the list (originally published in 1976) was written under the pseudonym of the legendary economist Adam Smith. The Money Game has a wry sense of humor and does a good job discussing how things were in past eras so that modern readers can see the parallels to today's markets.

As the famous saying goes, history doesn't repeat itself... but it does rhyme.

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