• Corporate Finance - Pierre Vernimmen

Pierre Vernimmen's Corporate Finance is a reference for finance professionals and students of economics and management alike. This book offers an in-depth analysis of the main concepts of corporate finance, such as enterprise value, financial analysis, investment and financing decisions, and risk management. Mr. Vernimmen details corporate valuation methods, emphasizing the importance of value creation for shareholders. He discusses the financial analysis tools, key ratios and performance indicators that are essential to understanding a company's financial health. The author also explains the different financing options available to companies, including debt and equity financing. He highlights capital structure management strategies and dividend policies. Investment decisions are another focal point of the book. Vernimmen presents criteria for evaluating investment projects such as net present value (NPV) and internal rate of return (IRR), and discusses the importance of taking risk and time horizon into account. The author's real-life experience, with a rich career in corporate finance, brings a practical dimension to the book. Vernimmen has advised numerous companies on financing and investment issues, enabling him to punctuate his book with concrete examples and case studies. For the experienced investor, "Vernimmen", as it's known, is a must-have if you want to turn a corner in corporate finance. On the one hand, it provides a solid understanding of the financial mechanisms underlying corporate operations - crucial for assessing investment opportunities - and on the other, it offers strategies for analyzing and interpreting financial reports, enabling investors to make informed decisions.

  • The little book to beat the market - Joel Greenblatt

"The Little Book to Beat the Market" is an investment guide written by Joel Greenblatt, a seasoned investor and professor at Columbia Business School. Joel Greenblatt has extensive investment experience. He is the founder of the Gotham Capital investment fund, which has delivered high annual returns for over two decades. The book proposes a simple but effective investment strategy, known as the "Magic Formula", designed to help investors outperform the stock market. Greenblatt presents this systematic method for selecting stocks. It is based on two main criteria: Return on Capital (ROC) and Earnings Yield (EY). According to the author, companies with a high ROC and a high Earnings Yield tend to outperform the market. Greenblatt suggests buying a portfolio of stocks that meet these criteria and holding them for a year before reallocating the portfolio. The author stresses the importance of discipline and patience in investing. He advises following the strategy for several years, despite market fluctuations, to achieve significant gains. Although this methodology is fairly basic, it helps us understand that quality-value stocks outperform the market over time. The author explains how individual investors can gain an advantage over professionals by focusing on small- and mid-cap stocks, which are often overlooked by large institutions because they are not liquid enough. The book can serve as a reminder that complex investment strategies are not always necessary to achieve good returns. Greenblatt's approach can also help experienced investors diversify their stock selection methods and refine their investment process.

  • The Most Important Thing - Howard Marks

"The Most Important Thing: Uncommon Sense for the Thoughtful Investor": is a book by Howard Marks, co-founder and co-chairman of Oaktree Capital Management, who is widely recognized as an influential figure in the investment world. Howard Marks has accumulated over 40 years of investment experience, having worked at Citibank before co-founding Oaktree Capital Management. His career has been marked by a cautious approach and a focus on buying undervalued assets. In this book, Marks compiles a series of "memos" to his clients detailing his investment philosophy and the lessons he has learned over the course of his career. The book highlights the importance of understanding market cycles, the need to go against the grain to succeed as an investor, and the importance of recognizing the impact of market psychology on investment decision-making. Marks emphasizes that the key to achieving superior results is to develop a rigorous and disciplined approach, while remaining flexible and open-minded. Marks explains that markets are influenced by recurring cycles, and that the ability to identify the current position in a cycle is crucial to making sound investment decisions. He emphasizes the need to understand and manage risk, rather than simply seeking to maximize returns. In his view, success in investing does not come from formulas or algorithms, but from the ability to make superior qualitative judgments. The author encourages investors to think independently and resist consensus pressure in order to achieve significant gains. Finally, he stresses that patience is essential and that sometimes, the best action is to do nothing. "The Most Important Thing" is particularly useful for the discerning investor as it offers a profound perspective on investment decision-making, based on decades of practical experience. The book doesn't just give advice, but provides a framework for understanding complex market dynamics and developing a mindset that can help navigate varied investment environments. It's an invaluable book for refining investment strategies, managing risk and maintaining discipline in an often unpredictable financial world.

  • The Outsiders - William N. Thorndike

"The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success" is a book written by William N. Thorndike. Thorndike, which explores the characteristics and strategies of eight CEOs who he believes have achieved outstanding results for their shareholders. Thorndike analyzes the decisions and behaviors that distinguish these leaders, often at odds with conventional business management practices. The author emphasizes capital allocation, the creation of value per share rather than sales growth, and a willingness to make decisions based on rigorous analysis rather than market trends. Thorndike points out that these "outsider" CEOs often have a counter-intuitive approach, such as downsizing to increase profitability or avoiding costly acquisitions. To identify a good CEO, Thorndike suggests looking beyond traditional metrics such as revenue growth and focusing on the ability to generate cash and manage company resources effectively. The book encourages investors to evaluate companies and their leaders on criteria not always evident in standard financial reports. A good CEO acts like an owner, focuses on the long term and thinks independently of the market. To find mutlibaggers, you need to find good CEOs. And in that sense, this book is an essential.

  • Security Analysis - Benjamin Graham and David L.. Dodd

Security Analysis", written by Benjamin Graham and David Dodd, is a fundamental text in the field of investment and financial analysis. First published in 1934, the book offers a systematic methodology for assessing the value of stocks and bonds. Benjamin Graham, one of the authors, is often referred to as the "father of value investing". His career was marked by a methodical, cautious approach to investing, influencing generations of investors, including the famous Warren Buffett. Graham put his theories into practice during the Great Depression, reinforcing his belief in the importance of fundamental analysis and value investing. His other book, "The Intelligent Investor", was included in the first selection of "8 books to get started in the stock market". It is divided into several key sections. First, he looks at the analysis of fixed-income securities, such as bonds, examining their security and value in terms of interest and repayment of principal. Next, he moves on to the analysis of equities, focusing on understanding companies' financial statements, assessing their earnings prospects and determining their intrinsic value. Graham and Dodd introduce the concept of "margin of safety", which is the difference between a stock's intrinsic value and its market price. This margin acts as a buffer for the investor against valuation errors or unforeseen events. They also highlight the importance of a disciplined, long-term investment approach, in contrast to short-term speculation. This is a relevant book in any library, and I consider it essential reading for any serious investor, offering lasting lessons on investment analysis and selection, as well as on the philosophy of value investing.

  • Beating the Street - Peter Lynch

"Beating the Street is a sequel of sorts to the first book, One Up One Wall Street, featured in the 10 Books for Beginners selection. Peter Lynch, an investment fund manager renowned for his outstanding performance at the helm of Fidelity Investments' Magellan fund. In "Beating the Street", Lynch also recounts his personal experience, from his early days as a securities analyst to his rise as a fund manager at Fidelity. He shares anecdotes and real-life examples from his career to illustrate his views and investment strategies. In this book, Lynch shares his investment philosophy and the strategies that have enabled him to consistently outperform the stock market. Lynch focuses on investing in individual stocks, encouraging investors to seek out companies they understand and whose progress they can track. He proposes a pragmatic, research-driven approach, suggesting that investors look at aspects such as competitive advantages, quality of management, financial health, and growth potential of companies. One of the key ideas developed by Lynch is the concept of "investing in what you know", meaning that investors should put their money into companies and sectors with which they are familiar or which they are passionate about. He explains that this can give an advantage, as the investor is more likely to understand the dynamics of the company and its industry. Lynch also discusses the importance of fundamental analysis, emphasizing the study of financial statements and financial ratios to assess a company's health and value. He warns against short-term speculation and advocates a long-term approach to investing. For the experienced investor, "Beating the Street" offers a valuable insight into the thinking of one of the greatest investors of all time. The book offers practical advice that can be applied to improve stock selection and portfolio performance. What's more, the lessons learned from Lynch's experience can be used to refine an investor's approach to decision-making and risk management. Lynch's lessons are still relevant today and continue to influence modern investment strategies.

  • Margin of Safety - Seth A. Klarman

"Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor" is a reference book written by Seth A. Klarman, President of investment management firm Baupost Group. Seth A. Klarman is an accomplished investor and fund manager. He co-founded Baupost Group in 1982 and has developed a reputation as a patient and disciplined investor, with an emphasis on capital protection. His career has been marked by consistent performance, even during periods of market turbulence, thanks to his value-oriented investment approach. Published in 1991, this book has become essential reading for investors because of its prudent, methodical approach to investing. Hard to come by, as only a few copies were published in 1991 and never reprinted, Margin of Safety sells for over $3,000 on the Internet. That's how much valuable advice it contains. Nonetheless, you can easily find it on the Internet. The central concept of the book is the "margin of safety", which is the difference between the price paid for a stock and its estimated intrinsic value. This concept has already been discussed in Benjamin Graham's seminal book "The Intelligent Investor". Klarman stresses the importance of buying assets at less than their true value, to protect against mispricing and unforeseen market events. He advocates a value-driven approach to investing, focusing on achieving a satisfactory return with minimal risk. The author also encourages investors to carry out in-depth fundamental analysis of companies to determine their true value. He discusses risk management, including the importance of diversification to protect the portfolio. Klarman warns against common pitfalls, such as trend investing and speculation based on market predictions. He explores how investor psychology and market trends can affect stock prices and create investment opportunities. "Margin of Safety" is useful for the experienced investor as it provides practical advice on how to approach investing in a thoughtful and disciplined way. It helps investors understand how to avoid paying too much for assets, how to identify undervalued opportunities and how to maintain rigorous discipline in managing their portfolios. Despite its age, the principles set out in the book remain relevant and are regarded as the foundations of value investing.

  • Investing for Growth - Terry Smith

"Investing for Growth, written by renowned investor and fund manager Terry Smith, is a masterclass in quality-growth investing. In this book, Smith shares his investment philosophy, which is based on selecting companies capable of generating sustainable, profitable growth over the long term. He emphasizes the importance of understanding companies' business models, their competitive advantages, and their management's ability to reinvest earnings wisely. Smith develops a number of key investment ideas. He advises investing in companies with high returns on invested capital and stable or growing profit margins. He also recommends focusing on companies with little or no debt and strong cash flow. The author stresses the importance of patience and discipline, advising against knee-jerk reactions to market fluctuations. Terry Smith's life experience is marked by his success as a fund manager, most notably with the creation of Fundsmith, an investment fund that has performed remarkably well by focusing on a small number of quality companies. Prior to this, Smith built a solid reputation as a financial analyst and business executive. "Investing for Growth" offers an in-depth perspective on the long-term investment approach and quality-based stock selection. The book provides practical advice that can be applied to evaluate investment opportunities and build a solid portfolio. Smith's methodology, proven by years of successful fund management, is particularly useful for those looking to improve their investment strategy by focusing on sound fundamentals.

  • Common Stocks and Uncommon Profits - Philips A. Fisher

"Common Stocks and Uncommon Profits was written by Philip Fisher and first published in 1958. Fisher is renowned for his investment strategies, which focus on company quality and long-term growth. In this book, he presents his investment approach, which moves away from purely quantitative analysis to focus on the qualitative evaluation of companies. For the record, Philip A. Fisher began his career as a securities analyst in 1928, before founding his own investment firm, Fisher & Co. in 1931. Throughout his career, he was a fervent advocate of long-term investment in well-managed, innovative companies. His investment philosophy has had a notable influence on renowned investors such as Warren Buffett. One of the book's central ideas is what Fisher calls the "fifteen points for investing", a list of criteria he recommends using to assess whether a company is worth holding for the long term. These points include the quality of management, innovation, the company's ability to sell its products, its profit margin and its commitment to research and development. Fisher also stresses the importance of what he calls "scuttlebutt", or gathering information through discussions with a company's competitors, suppliers, and customers to get a complete picture of its position in the industry and its growth prospects. This book offers a valuable perspective on the search for quality investments and the patience required to make attractive profits. The book highlights the importance of qualitative analysis and encourages investors to look beyond the immediate numbers to assess a company's long-term potential.

  • University of Berkshire Hathaway - Daniel Pecaut and Corey Wrenn

Finally, a book about Warren Buffett! University of Berkshire Hathaway", co-authored by Daniel Pecaut and Corey Wrenn, provides an overview of Berkshire Hathaway's annual shareholder meetings over a 30-year period, from 1986 to 2015. The book compiles the teachings and insights of Warren Buffett and Charlie Munger, presented at these meetings, and turns them into valuable lessons for investors. These letters are also directly available on the Berkshire Hathaway website. The book addresses several key ideas developed by W. Buffett and C. Munger, including: the value of long-term investing and the patience required to see a strategy bear fruit; the importance of understanding the companies in which one invests, including their business models and growth prospects; the need for a clear understanding of the company's future and its growth prospects; the need to maintain a margin of safety when buying shares, which means buying at a price below the estimated intrinsic value; the approach to capital allocation and how Berkshire Hathaway selects its acquisitions and investments; risk management and the importance of guarding against irreversible losses. Finally, the company's value investment philosophy, which focuses on achieving superior returns by buying undervalued assets. This book distills decades of investment wisdom into an accessible format. The book thus offers investment education straight from the "masters" themselves, presented in a clear and concise manner, making it a valuable addition to any serious investor's library.

I hope you find this list of 10 books useful. For those who wish to supplement their reading, I refer you to the first list: Eight books to get started in the stock market.