To be successful in stock market as an investor you need to have reading habit. The CEO of Berkshire Hathaway Warren Buffet spends 80% of his time reading books. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it. There are no shortcuts to reading. When I got introduced to the stock market I was overwhelmed by the information that was available. Being from non-finance background made things much worse. But you know what? People from any segment of work can learn to invest.
I am listing few books that you must read for understanding stock market. It will also teach you how money works and Why rich people are getting richer and poor ones stays poor. So here is the list –
1. Rich Dad Poor Dad (by Robert T. Kiyosaki) – This is the first book that you should start with. This was also the first financial book which I read. This one book changed the way I think. You will get a lot of inspiration by reading this book. This book doesn’t provide anything technical related to investing. But it will give you some basic insight and inspiration that you should be rich.
2. Intelligent Investor (by Benjamin Graham) – The tag line on Cover of this book by Warren Buffet reads – By Far the Best Book on Investing ever written. Indeed it is the best book written on Value Investing. It is considered as the Bible of the stock market. Anyone who is a successful figure in the stock market has read this. Warren Buffet says he has read the book so many times that he remember the lines in the book! The book has presented the history of the stock market and analyzed it. Note – this book can be hard to understand for people who are from non commerce background and its English is also not easy to understand. Another issue with this book is that this was written based on US market. so at a lot of places it’ll become hard for you to relate the given examples with Indian market scenario.
3. Japanese Candlestick Charting Techniques (by Steven Nison) – This book introduces candlestick charting and patterns. Detailed work that reveals Technical Analysis of Stock Trends and provides traders with a complete understanding of chart patterns.
4. How to avoid loss and earn consistently in the stock market (by Prasenjit Paul) – This book explains the scenario of the Indian stock market and the winning strategies. The book explains the basic of Investing in Stock in very simple and lucid terms. It also gives you a 2-min strategy to shortlist/reject stocks before detailed analysis.
Apart from these books, if you are serious in share market then you should read financial news papers and magazines on regular basis.