Stock selection is among the initial and most important parts of trading. To a newcomer, it can appear to be an easy affair, however, experienced investors know the importance of investing in the right securities. Fundamental Analysis books hence hold great significance in the trading process.
In general, Fundamental Analysis is performed by analysts on stocks to develop a more accurate estimation of any stock’s value for long term investments – investments that exceed 3 years.
Fundamental Analysts take in a lot of factors such as interest rates, the performance of the market, performance of a business to draw a proper estimation of a stock’s value.
Other than paying unnecessary attention to daily and insignificant fluctuations in a stock’s price, fundamental analysis helps investors to study and invest in stocks for the long run.
This uncertain nature of trading causes the investor to rethink about making long term investments, however, that fact remains out in the open that long term investments perform far better than short term investments.
So, an investor that finds himself in such a situation will ideally look to educate himself about how to perform Fundamental Analysis on stocks. Many who would like to adopt a more traditional method of learning would prefer to learn stock market through fundamental analysis books.
Yes, there are so many stock market courses available too that you should ideally be checking out, especially the ones we offer at Stock Pathshala. But, avid book readers would want to have their hands dirty on a few books for learning stock market too.
Here in this article, we present 10 of the best fundamental analysis books that will help an investor make better long term investment decisions.
1. The Theory of Investment Value ⏐ John Burr Williams
Call this a modern classic that tackles one of the most important aspects of investing – Fundamental Analysis.
The book originally was written as a Ph.D. dissertation by the author John Burr Williams while still a Harvard student. But, got published in the year 1938.
Many prominent names from the world of finance have used the information from the book to make better investments.
The book has been split into 2 parts, with the first part titled “Investment Value and Market Price” which looks into topics such as speculation in the stock market, evaluating the present worth of stocks, etc.
While the second part is made up of case studies of investment value which is a collection of case studies from the past.
2. Security Analysis ⏐ Benjamin Graham and David L. Dodd
Another classic on the list, the book Security Analysis has been co-authored by Benjamin Graham and David L. Dodd.
The book was published in the year 1934 during the time when the world was enduring the great depression resulting from the first World War.
Written at the time when the world literally was at its feet and the stock market recorded its worst crash, the book is a great source of everlasting information, advice on fundamental analysis of stocks and investment techniques that stand the test of times.
The book in its sixth edition features commentary from the eminent figures of The Wall Street, including former managers, financiers, investors debating why the teachings in the book remain significant despite all these years.
3. The Intelligent Investor ⏐ Benjamin Graham
The list without the mention of this gem of a book by “The father of value investing” – Benjamin Graham would have been considered incomplete.
The Intelligent Investor was originally published in the year 1949 and has stayed hugely popular with investors ever since.
This book has been a source of inspiration for many successful individual investors such as Irving Kahn, William J. Ruane.
The Intelligent Investor includes a chapter discussing the history of stock prices recorded as early as 1972 and the portfolio approaches adopted by investors of differing mindsets in accordance with their investment needs.
The book provides advice to the investors in scenarios both positive and negative.
4. Mastering Fundamental Analysis ⏐ Michael C. Thomsett
Mastering Fundamental Analysis is for traders who are already familiar with the concept of Fundamental Analysis to some extent.
The book written by Michael C. Thomsett was published in 1998.
The book will help an investor learn Fundamental Analysis starting off by discussing the basics of the process before advancing to more complex topics such as various types of Ratios, Trends.
The book is aimed at investors to help forecast stock prices in the future.
The book is loaded with examples that help better understand the charts, graphs, checklists that form an integral part of fundamental analysis.
5. Getting Started In Fundamental Analysis ⏐ Michael C. Thomsett
“Getting Started In Fundamental Analysis” is the perfect way for a beginner to gain awareness about the topic of Fundamental Analysis.
Published in 2006, the book is a wholesome guide for investors written in a non-technical writing style that will offer investors insights to lessen the risks of an investment.
Author Michael C. Thomsett is a stock market expert having immense knowledge on the topic relating to trading.
This fact needs to be known that he has penned over 12 financial books.
The book although looks like an introductory book but offers invaluable knowledge on how an investor can detect and manage the risk level of any investment.
6. Fundamental Analysis For Dummies ⏐ Matt Krantz
The title of the book reveals the target audience it is aimed at.
A beginner can make use of this book which is written in the simplest of languages possible to learn how to accurately determine a stock’s true worth.
Fundamental Analysis For Dummies written by Matt Krantz is full of illustrations and practical knowledge that will assist a beginner to learn about the various tools that are used in the process.
A book teaches how to draw a comparison between a company and its rivals.
In addition to learning to carry out analysis on stocks and businesses, this book, explains how to conduct the same on other financial instruments such as currency, commodities, and bonds.
7. Business Analysis And Valuation: Using Financial Statements ⏐ Krishna G. Palepu and Paul M. Healy
Authors Krishna G. Palepu and Paul M. Healy, both Harvard business school graduates wrote this book that provides an in-depth understanding of a company’s business strategy and ultimately its performance.
The book published in 1996 got revised for the fifth time in 2012.
The book has three parts, where the second part is entirely dedicated to the topic of Business Analysis and Valuation Tools that form a part of the process of fundamental analysis.
Further, the third part of the book “Business Analysis and Valuation Applications” teaches an investor about the fundamental analysis conducted on any business and its example.
8. Ratio Analysis Fundamentals ⏐ Axel Tracy
Through this book, the author Axel Tracy teaches investors to carry out a complete analysis of a company using just 17 Financial Ratios.
Ratio Analysis Fundamentals can prove to be a great place to start for investors with no prior understanding of ratio analysis.
Ratio analysis is an important tool that helps to learn about a business’s profitability and operational efficiency through its financial statements.
This again holds the utmost importance to the cause of an investor for making investment decisions.
The author teaches how to employ ratio analysis for measuring a company’s liquidity, efficiency, as well as valuation comparison of stocks.
9. Futures: Fundamental Analysis ⏐ Jack D. Schwager and Steven C. Turner
Written by one of the most credible financial experts of current times – Jack D. Schwager, the book has Steven C. Turner as a co-author and is a complete guide on fundamental analysis in futures trading.
Through the book, the investor will get to learn about the techniques to determine the value of stocks for futures trading.
The author pours his years of experience and expertise on the topic of fundamental analysis in the book.
The book is full of real-life experiences of the author that can prove invaluable to investors in futures trading.
The author seems to simplify all the complex information through the means of examples, tables, illustrations, and charts.
10. Fundamental Analysis and Position Trading: Evolution of a Trader ⏐ Thomas Bulkowski
This book by Thomas Bulkowski published in 2012 is the youngest on the list.
The author talks about the existing 4 major trading patterns people tend to develop and adapt over time while trading in the stock market.
The book shows that traders tend to follow a peculiar trend that is purchasing a certain stock that is trending due to one factor or the other and hold a position on the stock for some time before ultimately choosing to sell that stock as soon as the trend expires.
The part “Fundamental Analysis and Position Trading” takes on the topic of the best practices to conduct fundamental analysis on stocks that have the potential to multiply their value by as high as 10 times.
Stock selection is a question every investor faces, but more or less have a hard time deciding for ones that promise profits on investment over a period of time. Fundamental Analysis is the solution to this problem.
It is used by analysts on stocks to gain a clear estimation of a stock’s performance over a period of time. Since, Fundamental Analysis is a more technical aspect of trading and will require an investor to have a reasonable amount of understanding of tools such as charts, graphs, price trends, etc.
Investors turn to books to gain this knowledge, however, again face a hard time finding accurate information. Thus, this list of the best fundamental analysis books becomes all the more important.
This list contains books for beginners such as “Fundamental Analysis For Dummies”, whereas
“The Intelligent Investor” by prominent investor Benjamin Graham can prove beneficial for an investor and enhance their ability as an investor.
Author Axel Tracy’s book, “Ratio Analysis Fundamentals” is unique in terms of the matter but finds a place on the list purely by the virtue of its pure brilliance.
The books on the list deliver on the agenda of educating investors about the importance and the techniques of Fundamental Analysis.