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Atlanta Money Manager, Financial Advisor, Financial Planner

investment books Books: Investing, How To Invest, and Money Management




Trade Your Way To Financial Freedom by V.K. Tharpe

Long-term investors can learn a great deal about risk management and principal preservation from world class "traders". This book is an excellent source of information about what really matters; how to make money and avoid large losses in any investment market from currencies to commodities. Rather than discussing a high-level economic theory, this book focuses on proven and systematic approaches to managing money and risk. If you are new to technical analysis, this book will open your eyes in many ways. For example, performing an analysis on multiple time frames is a logical concept, but one that is not leveraged properly by most market participants. CCM Rating: Five Stars






Trend Following by M.W. Covel

Trend following or trend followers are often criticized on Wall Street, usually by people who do not really understand the methods and rationale of trend followers. The bottom line is this; if you want to make money as a buy-and-hold investor your investment must trend upwards. Since the previous statement is an indisputable fact, then it makes sense for us to understand trends, how to identify them, and how to profit from them. This is another "forget the academic theory" book that focuses on the methods of successful money managers. Trend following and risk management techniques can be combined with more traditional fundamental analysis to improve the odds of investment success. Even Warren Buffet needs his investments to trend in a bullish manner in order to produce profits. CCM Rating: Five Stars






The Evaluation And Optimization Of Trading Strategies by Robert Pardo

If you are interested in designing a model or a trading system, this book covers the key elements. Systems find and leverage an edge in the markets. Once you identify an edge, you must build a system to "trade" the edge (in our case allocate). Prior to putting hard earned capital at risk, the system must be thoroughly tested using sound methods. The topics of backtesting, walk forward analysis (WFA), systems development, risk management, simulations, and profit evaluation were the most relevant to our approach to the markets. Many of you may know "walk forward analysis" as rolling optimization or periodic reoptimization. CCM Rating: Four Stars.







Trading In The Zone by Mark Douglas

A disciplined system is worthless if the human being breaks the rules and lets emotions creep into the process. Trading In The Zone covers what may be the most important parts of investing: confidence, discipline, and a positive attitude. According to Douglas, "The first step on the road...is to understand and completely accept the psychological realities of trading." CCM Rating: Five Stars











The Champion's Mind by Dr. Jim Afremow

This is not an investment book, but it applies to disciplined investment systems. How will we handle frustrating and difficult markets? How will we handle criticism? How will we deal with people who attempt to discourage us? How will we remain disciplined during high stress periods? How will we handle an enviable period of underperformance or drawdowns (no system is perfect, all systems experience drawdowns)? If you still play competitive sports, this book will also help you on the court, diamond, ice, track, or race course. CCM Rating: Five Stars








The New Market Wizards by Jack D. Schwager

One of the main benefits of many of the best books on trading and investing is that they contain interviews with people who have been successful in the markets. The financial markets are an incredibly competitive and difficult arena. The first step in building a winning system or approach is to believe with 100% conviction that success is possible in the markets. This book is outstanding in that regard. CCM Rating: Five Stars











Breakthroughs In Technical Analysis by D. Keller

Chapter 10, titled The Ten Commandments of Technical Analysis, served as further validation to many of the methods used at Ciovacco Capital Management. The chapter covers methods to rank alternatives, make buy and sell decisions, and the importance of protecting principal when investments go against you. As a book, most experienced money managers will probably find only one or two of the chapters of interest based on their own approach to the markets. As a result, this book may not be as useful as those listed above. However, if you can learn one thing from a book to improve your odds of being a successful investor, then it is time and money well spent. From our perspective, this was a "validation" book, telling us others have had success using similar approaches to money and risk management. CCM Rating: Three Stars






How to Make Money in Stocks by William J. O'Neil

If you consider yourself to be a momentum investor, this is your Bible. Just as all investments have a value component, they also all have a technical/momentum component. This book contains several implementable strategies. An excellent source of good methods and thoughts. If you are interested in a systematic approach to the markets, O'Neil provides some excellent insight via CANSLIM and cup-and-handle patterns. Even if the IBD system is not for you, this book can spark ideas about how to build a disciplined and fact-based approach to investing and risk management. CCM Rating: Five Stars








The Power Of Now by Eckhart Tolle

The CCM Market Model allocates assets based on hard data or based on "what is", rather than "what was" or "what might be". Countless mistakes are made in the markets due to fear of what may happen and/or inaccurate forecasts about future outcomes. The concept of staying in the now aligns very well with the concept of following price and making allocation decisions based on facts. As @SharpTraders noted on Twitter; "trade what is happening, not what you think is going to happen". In our case, it becomes "allocate based on facts, not predictions or fear". CCM Rating: Four Stars









The Signal And The Noise by Nate Silver

The financial markets represent a complex organism, which is similar to other complex organisms, such as weather systems. Like weather forecasting models, our model uses hard data (what is/facts) to assess probabilistic outcomes. Silver's book provides insight into why some probabilistic models add value and others fail. The Signal And The Noise provides numerous cases outside the financial markets that can assist us with our investment and trading systems. CCM Rating: Four Stars










Following The Trend by Andreas F. Clenow

Provides examples of success with trading systems. Following The Trend breaks down the basic ways most trading systems approach the markets. It covers the design of similar systems, as well as common pitfalls in systems development and design. CCM Rating: Four Stars












Security Analysis by Graham & Dodd

The is an excellent base-building book. Even if you "follow price", it is important to understand how markets determine the price of assets. Graham will teach you how to properly weigh the pros and cons of each stock (or market/ETF/fund). If you are the type of person who wants a book that gives you methods that can be quickly implemented by the reader, you really won't find that here. However, if you are really interested in getting better, this book will help you understand how to value a business. CCM Rating: Four Stars









New Market Timing Techniques by Tom DeMark

You have to be hard core to read this book. It is not an easy read, but like any book on the markets, there are numerous valuable takeaways on how markets function and how human beings think and act. Tom DeMark is known for his "calls" and his counts, but he has a wide variety of proprietary market indicators and tools. We have DeMark's tools in our risk-management arsenal. This book is for advanced traders and investors with years of experience. This is not the place to start if you are new to the markets. CCM Rating: Four Stars










The Intelligent Investor by Benjamin Graham

This is another excellent base-building book. If you are interested in the law of supply and demand, you will enjoy this book. Most people will tell you that "only value investors need apply", we disagree; all investment decisions have a value component. The concepts covered in The Intelligent Investor are timeless. This is a must read if you are committed to incremental improvement in your methods. CCM Rating: Five Stars










Reminiscences of a Stock Operator by Edwin Lefevre

Reminiscences of a Stock Operator is the thinly disguised biography of Jesse Livermore. Livermore was a tape reader, which in today's world means he followed price or believed that price captures everything (valuations, earnings, Fed policy, geopolitical concerns, the money supply, credit markets, interest rates, etc.). The fact the markets and price are based on the net interpretation of all the relevant facts is the reason charts and technical analysis are such powerful risk-management tools. CCM Rating: Five Stars










How I Made $2,000,000 In The Stock Market by Nicolas Darvas

It is important to note that numerous books on this page are written about individuals or small groups of people that developed winning systems based on hard data and discipline. It is also noteworthy that none of these books are written about an investment policy committee at a large Wall Street firm. The financial markets reward innovation rather than groupthink. CCM Rating: Five Stars











The Way Of The Turtle by Curtis M. Faith

Can disciplined systems produce profits in the financial markets? This book provides another example of "yes, it can be done and has been done". The turtles were an experiment to see if it was possible to teach people how to trade successfully using a rules-based system. If you want to build an investment or trading system, books like this one will spark new ideas and increase your confidence in terms of building a system. CCM Rating: Four Stars









The Warren Buffett Way by Robert G. Hangstrom, Jr.

Base-building books are important for model builders. The CCM Market Model is based on sound economic principles. Do we invest like Warren Buffet? No, but it is helpful to understand how market participants value assets. Some of the topics covered in this book are the importance of brand names, why non-durable goods are attractive, why you should care about a company's long-term track record of ROE (return on equity), owner earnings, and management's integrity. The book is well-written and gets excellent marks for educational value. CCM Rating: Four Stars









Buffettology by Mary Buffett

Unlike most Buffet books, this book shows you, step-by-step, how to do the mathematical calculations that Mr. Buffet does prior to making any investment decision. If you read the Warren Buffet Way (above), you will begin to understand why ROE (return on equity) is so important to a company's future stock price. This book, Buffettology, shows you how to turn the concept into a powerful screening tool. CCM Rating: Five Stars










The Wooden Way by John Wooden

Model building is all about the details. Backtesting is all about the details. Executing in the markets is all about discipline and details. Coach John Wooden was the master of discipline and detail. His approach to human interaction, coaching, and life applies to the markets, trading, and investing. CCM Rating: Five Stars











The Warren Buffett Portfolio by Robert G. Hangstrom

The book sheds some additional light on the concept of placing a value on a business today by examining the present value of expected future cash flows. This book also covers the value of patience (let the superior economics of a superior business be your guide). CCM Rating: Three Stars












Common Stocks And Uncommon Profits by Philip A. Fisher

It is a base-builder; see the comments on Security Analysis and The Intelligent Investor (above). This is the same type of book; very much worth reading, but not full of implementable ideas. On the cover of my copy, there is a quote from Warren Buffett, "I am an eager reader of whatever Phil Fisher has to say, and I recommend him to you." CCM Rating: Five Stars











The 7 Habits of Highly Effective People by Stephen R. Covey

This is a classic which most people have read. One of the best "how to be more productive via proper allocation of a limited resource: time" books. The time management matrix (quadrants) applies to all areas of life, including model building, running a business efficiently, and the importance of setting the proper priorities from a what is really important perspective. CCM Rating: Five Stars











The Magic of Thinking Big by David J. Schwartz

This is a good book to get you motivated. It gets exceptional marks in the area of visualization and attitude, but without more well-grounded methods found in Covey's books. Highly recommended for high school and college students, and any professional who is "stuck in a rut". CCM Rating: Five Stars


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