The 7 Best Investing Books

Best Overall: The Bond King

This may be the year for books about Bill Gross. In addition to The Bond King by Mary Childs, which we rank the best overall investing book on our list, the subject himself has released a self-published autobiography titled I’m Still Standing: Bond King Bill Gross and the PIMCO Express.

Childs’ authoritative, engaging book about pioneering bond trader Gross, from the investment management firm PIMCO, portrays him as brilliant and a visionary, who devised a new way to invest by making a market for trading bonds. Yet he also comes across as an egotistical, mercurial boss who was so verbally abusive to his staff that some avoided walking by his office to keep from running into him. After many years, enough staff members quit—including PIMCO’s former co-CEO and co-CIO, economist Mohamed El-Erian, whom Gross had recruited from Harvard Management Co. as his eventual successor—that Gross was forced to resign from the company he built.

Childs, a co-host of NPR’s “Planet Money” podcast who has also reported for Barron’s, the Financial Times and Bloomberg News, takes the reader through the subprime mortgage crisis, in which many Americans lost their homes due to predatory lending practices. At the time, Gross’ number was on the speed dial, so to speak, of many top federal and banking officials who valued his opinion and sway.

Early on, Gross learned about strategy by successfully counting cards as a blackjack player at various Las Vegas casinos. He took that same push-to-the-limit mentality to the bond market, where he was dubbed the “Bond King” by Fortune in 2002. During those years, he was a darling of the financial press—beaming from business magazine covers, being interviewed on CNBC, and being a sought-after speaker at financial gatherings.

After he was ousted from PIMCO, he went to Janus Capital Group, where he was unable to duplicate his earlier success. In 2019, Gross revealed that he had been diagnosed with Asperger syndrome, which affects communication skills. In 2022, far from having “lost it all,” Forbes put Gross’ net worth at $2.6 billion.

Best Book About Value Investing: The Intelligent Investor

The key lesson from Benjamin Graham’s much-lauded tome: “Don’t lose.” Easier said than done, of course. So read on. The reason why this book, originally published in 1949, is still in print is that it offers investors—be they beginners, those with some knowledge and success, or old hands—the nuts and bolts of value investing, which is buying stocks of quality companies whose worth is undervalued. The practice is akin to buying a finely made piece of furniture at a discount. It was most recently updated in 2006.

Graham largely shuns the practice of analyzing securities in favor of expanding on investment principles and investors’ attitudes. He notes that the intelligence of any investor has nothing to do with IQ or SAT scores. “It simply means being patient, disciplined, and eager to learn; you must also be able to harness your emotions and think for yourself,” he writes.

Chapters cover investment vs. speculation, the investor and inflation, general portfolio strategy, stock selection for both the enterprising and defensive investors, comparisons of companies, and many other subjects. To bolster the book’s relevance, Wall Street Journal columnist Jason Zweig added commentary after each chapter with recent examples. In the preface to the fourth edition, Warren Buffett, chairman and CEO of Berkshire Hathaway, wrote: “I read the first edition of this book in early 1950, when I was 19. I thought then that it was by far the best book on investing. I still think it is.”

Best Book on Investments Helping Society: Patient Capital

“Many of society’s most intractable problems—from addressing the environment, to revitalizing decaying infrastructure in developed and developing nations alike to national security, to the hunger for innovation to stimulate economic growth—resist easy solutions. Rather, they can only be addressed with the thoughtful application of time and money,” write Victoria Ivashina and Josh Lerner, both Harvard Business School professors.

The authors cite the Rockefeller family’s wealth as an example of the use of patient capital. The patriarch, John D. Rockefeller, turned a $4,000 investment in the oil refinery Standard Oil into the initial source of the family’s vast holdings. Two generations later—led by his grandchildren, especially Laurance—long-term capital brought about the development of Eastern Air Lines, a carve-out from General Motors; military contractor McDonnell Aircraft Corp., which eventually was folded into Boeing Co.; the unfolding of tourism and conservation in the U.S. Virgin Islands, including building the exclusive and environmentally friendly Caneel Bay resort on St. John Island; and providing critical funding for the expansion of national parks in the United States.

“Rather than having a set life, RBI [Rockefeller Brothers, Inc., which included Laurance, four brothers, and sister, Babs] was organized as an evergreen fund. Laurance anticipated that the investments would be held for a decade and then sold or taken public,” write Ivashina and Lerner. “Rather than being returned to investors (as in today’s standard fund), the proceeds of the successful would flow back into the fund, ready to be used for subsequent investments.”

The authors explain that the use of patient capital, or long-term capital, means that the investor, like the Rockefeller family, is willing to wait as long as decades for a return. Governments aren’t able to underwrite many of these projects, due to the lack of political will to fund such long-term plans. However, pools of capital in pensions, insurers, sovereign wealth funds, endowments, and family holdings matched with the right entities can do the job. These arranged marriages, the authors maintain, can yield “benefits for investors, fund managers, and society as a whole.”

Best Book About Investing Gone Awry: The Billionaire’s Apprentice

This book about how investing went south reads like a thriller, and covers:

• The South Asian diaspora and its community’s quick rise in the United States in influential areas of business and professions
• The influx of South Asians to the United States post-1965, when U.S. immigration laws were relaxed
• An Othello-Iago story, which is the pairing in crime of a high-born Indian immigrant who headed the consulting company McKinsey and Co., named Rajat Gupta (Othello), with math genius Sri Lankan immigrant Raj Rajaratnam (Iago), who led the Galleon Hedge Fund and became a billionaire
• Their downfall, which led to prison terms for both over convictions related to insider trading

Author Anita Raghavan characterizes Rajaratnam as the “king of wealth” and Gupta as the “king of thought.” Of the title, it was Gupta, a decade older than Rajaratnam, who was lured by the chance to become a billionaire after spending three decades at the consulting firm where he drew a salary in the millions. At the time of their arrests—prosecuted by Indian-born Preet Bharara, then U.S. Attorney for the Southern District of New York—some reporters lamented the men’s downfall, saying it reflected poorly on the ascendant South Asian community.

Raghavan—herself of South Asian descent and a contributor to The New York Times, who also had held positions at The Wall Street Journal and Forbes—noted that the Gupta-Rajaratnam affair is a part of the South Asian story but not its defining moment. In The Billionaire’s Apprentice, she closes with a surprising Gupta family secret that foreshadows Rajat Gupta’s crimes.

Best Book on Day Trading: The Ultimate Day Trader

After explaining to readers that The Ultimate Day Trader  is for the experienced investor, Jacob Bernstein welcomes beginners in the first chapter, “Definitions and Directions—What It Means to Day Trade Today,” for those who are considering joining the market or simply want to know more about the subject. “A day trader,” he writes, “is an individual who enters and exits a position in the markets during the course of the trading day.” Of course, the “trading day” is now 24 hours, due to the advent of 24-hour trading in many markets.

Bernstein suggests there are 11 reasons to day trade, including reduced headline risk, knowing the results by the end of the “day,” the availability of reliable forecasting, the chance for instant execution, market volatility, and the sheer pleasure of doing it. The downsides, which may not be drawbacks to all, are that day trading is very hard work, subject to random events that impact prices, time consuming, competitive, and stressful.

The author is the founder of the money management firm Bernstein Investments Inc. and has written 35 books on trading, investor, investor psychology, and economic forecasts, including The Compleat Day Trader. Bernstein employs his straightforward, understandable writing style and punctuates it with charts and graphs to lead the reader through day trading markets and methods, gap day trading, volume spikes and their use in day trading, the importance of structure, exit strategies, and the “10 Cardinal Rules of Day Trading.”

Among his rules are doing your homework, showing consistency, avoiding any stocks or futures markets that “scare you,” and being willing and able to make big moves, which is the way to make profits. At the end, Bernstein asks whether you have what it takes to be a day trader. That is, can you own up to your losses and move on? If so, get started. 

Best on the Thinking Behind Money and Investing: The Psychology of Money

This breezy book takes the reader on a journey across 19 short chapters, which spell out the sometimes odd ways that people think about money and the behavioral psychology surrounding it, then suggest ways to become more financially secure. One example: Author Morgan Housel recommends staying wealthy, as opposed to getting wealthy. To illustrate the point, he draws on the life and work of Berkshire Hathaway Chairman and CEO Warren Buffett, who began investing as a child and simply loves to make money, while he famously shuns the modern trappings of wealth.

Housel maintains that the goal of having money is the freedom it affords people to make choices that make them happy. “It is the highest dividend money pays,” writes Housel, a former Wall Street Journal columnist, who has won many journalism awards. One place where we disagree with Housel: He considers Benjamin Graham’s above-mentioned The Intelligent Investor dated and not useful for today’s investors. However, the rest of his advice is excellent.

“[Housel’s book] covers some of the most important topics in finance, which are unexpected and fun to contemplate. Why were Warren Buffett and Bill Gates so successful? Sure, they’re smart people, but there are a lot of smart people out there. Buffett used time to his advantage and Gates was fortunate enough to attend a school where there was access to a computer [at a time when few schools had them],” writes Certified Financial Planner Justin Pritchard.