Reading Over 100 Investment Books and What Remained for My Own Investing—Until the Words in Books Connect with Experience [Investment x Real Experience]
Books I read when I first started investing often stated that “cutting losses is important.”
I think that is an important point.
However, when the stocks I actually bought with my own money went down, acting according to those words was quite difficult.
I have read over 100 books on investing so far.
At first, they were introductory books to learn what stocks are and how to trade them.
After that, I also started reading books on how to read charts and short-term trading.
There were books that were helpful, and there were books that I felt did not suit me.
There were also ideas that didn’t really click at the time I read them, but that I came to understand a little later on.
This time, while looking back on the investment books I have read so far, I would like to think about what has remained for my own investing.
1. It started with “What are stocks?”
When I had just started investing, I read several books for beginners that explained a wide range of basic things.
What are stocks?
How do you trade stocks?
In the first place, I needed to know about those things.
How to read candlestick charts and how to look at charts.
How to look at basic fundamentals, such as corporate performance.
I didn’t know the knowledge I use in my daily investing now from the very beginning.
When you look up one thing, other related terms also appear.
Introductory books were useful for learning those basic things all at once.
It was especially around the time I started investing that I read books frequently.
Since I originally liked reading books, I think I was able to naturally get into learning about investing through books.
The number 100 might seem like a lot, but it is the result of reading books that interested me over the course of continuing to invest for more than 15 years.
The trading mechanisms and basic terminology I learned in the beginning have become the foundation for reading other books and for when I actually invest later on.
2. How to Read Charts and Mindset When Trading
When I was focusing on short-term trading, a book that was particularly helpful was “Day Trading: Techniques to Profit from the Market” by Oliver Velez and Greg Capra.
For me, it was helpful not so much for specific trading techniques, but for the mindset required when facing trades.
You might think that investment books are read to learn “where to buy and where to sell.”
Of course, that knowledge is also necessary.
However, once you actually start trading, you realize that knowing how to read a chart and being able to act accordingly are two different things.
The market does not always move the way you expect it to.
It is not just about trading techniques, but how you face such situations.
“Day Trading” is one book that left an impression on me in terms of thinking about my own attitude toward the market.
On the other hand, when I was devoted to technical analysis, I liked “Technical Analysis of the Financial Markets” by John J. Murphy.
Although the title says “Financial Markets,” the content is not limited to futures trading.
It explains a wide range of technical analysis basics that can also be applied to the stock market, such as trends, chart patterns, and moving averages.
I believe my way of reading charts was solidified to a certain extent by this one book.
At the time, I was quite obsessed with technical analysis.
Even now, when I look at individual Japanese stocks, I check daily and weekly candlesticks, moving averages, trading volume, and past lows.
While I am not as devoted to technical analysis alone as I was back then, the basic way of looking at things still remains with me.
Even among investment books, what remained with me is slightly different.
From “Day Trading,” it was the mindset when facing trades.
From “Technical Analysis of the Futures Markets,” I gained the knowledge to read charts.
Although my way of investing has changed since then, it does not mean that everything I learned back then is no longer in use.
3. There were methods I tried reading about that didn’t suit me
While there were things I found helpful from reading books, there were also many that I felt did not suit me.
One of those is scalping.
It is a trading method that targets price movements over a very short period, but when I actually tried it, I felt it did not suit me at all.
Regarding such short-term trading, I think I am just too bad at it (laughs).
Various trading methods are introduced in investment books.
Every method likely has its own philosophy and rationale.
However, being able to understand something as a theory and being able to actually master it yourself are not the same thing.
As I encountered and tested various investment methods, I gradually developed my own way of doing things.
In that process, I think there was meaning not only in what I was able to successfully incorporate, but also in realizing, “This doesn’t suit me.”
Even if a method written in a book is excellent, it does not necessarily mean it is equally suitable for everyone.
I think finding a method that suits you was also an important part of continuing to invest.
4. Even knowing that cutting losses is important, it was difficult
What I felt was a gap between what I learned in books and my actual actions was cutting losses.
Many of the books I read when I was a beginner wrote about the importance of cutting losses.
I knew that, too.
Even so, it was difficult to actually put it into action.
I have previously averaged down many times on stocks whose prices had fallen.
If I lower my average acquisition cost, I might be saved when the stock price recovers.
I was buying more with that thought in mind, but the market does not consider my circumstances.
Time and again, it broke through levels I thought were the bottom.
“Please, don’t go any lower.”
There were times I watched the stock price while thinking that.
If you keep buying more, your position naturally grows larger.
Not only did my unrealized losses increase, but the funds available to buy other stocks decreased, and the mental burden grew as well.
When reading a book, I can calmly consider the necessity of cutting losses.
However, in actual trading, my own money is involved.
I’d rather wait a little longer than realize a loss.
When such feelings arise, it is difficult to change one’s actions based solely on knowledge read in books.
However, I do not think that means the books were useless.
If I hadn’t known the importance of cutting losses, I would have had little material to reflect on my trading after failing.
Through experiencing it many times, I began to feel the difficulty of predicting the bottom.
Now, I am conscious of buying in small amounts at first, splitting purchases into several times, and keeping funds in reserve on the assumption that it might fall further.
Regarding cutting losses, I also try to think about exit conditions in advance.
Of course, I cannot always make decisions as ideally as I would like even now.
Even so, I think I have come to accept the meaning of the words I read in books with more realization than before.
5. What remains with me from two people with different investment styles
Among the books I have read so far, there is one titled “Buffett and Soros: The Investment Strategies of Winners”.
This is a book by Mark Tier that covers the investment philosophies of Warren Buffett and George Soros.
These two have vastly different investment methods.
Buffett is known for valuing companies and holding onto excellent businesses for the long term.
On the other hand, Soros is an investor who captures market changes and trades dynamically, sometimes using leverage.
Looking only at their investment styles, they are two contrasting figures.
Even so, this book introduces habits and principles common to both of their investments.
I was interested in being able to read the ideas of two people with completely different investment methods in the same book.
And there are things from their ways of thinking that still remain in my own investing today.
First, there is the following idea, known as a quote from Soros:
“First, survive; then, make money.”
My memory is hazy about which book I first read this in.
However, it is a concept I have cherished since the days when I frequently did short-term trading.
Even if you want to make a large profit, if you become unable to continue investing before that, you cannot wait for the next opportunity.
I have personally experienced significant losses through short-term trading and margin trading.
As I accumulated such experiences, I began to feel that avoiding fatal losses is just as important as seeking profits.
Although short-term trading is no longer my main focus, this way of thinking has not changed.
On the other hand, the situation is a bit different regarding Buffett’s way of thinking.
When I first started investing, I read several books written about Buffett’s investment methods.
However, it didn’t really resonate with me at the time.
For someone like me who focused primarily on short-term trading, the idea of waiting a long time for a company’s value to grow was not something I was very familiar with.
One story that left an impression on me is the one recounted about an exchange between Jeff Bezos and Buffett.
Why don’t more people copy Buffett’s investment method?
When asked that, Buffett reportedly replied to the effect that his way is a way to get rich slowly, and people don’t like that.
I want to increase my assets quickly.
I have that feeling, too.
Even so, after continuing to invest for over 15 years and incorporating index investing and long-term holding, I have become more accepting of the idea of increasing assets over time than I was before.
What is interesting is that I did not choose one over the other between Soros and Buffett.
Even if their investment methods are different, there are ideas in each that are helpful to me.
First, survive in the market. And second, make time your ally.
Perhaps those are the two ideas that remain with me now.
The content of books I read long ago takes on a different meaning as my own way of investing changes.
I think that is one of the interesting things about reading books.
6. The book might have become a ten-bagger
While researching what kind of books I used to read for this article, I was a little surprised.
It was “Jim Cramer’s Real Money: Sane Investing in an Insane World.”
I bought it for about 1,900 yen a long time ago, but the listing price I saw on Amazon this time was a staggering 19,930 yen.
Looking at the listing price, it is a ten-bagger in a sense (laughs).
Of course, whether it actually sells at that price is another story, and it does not necessarily represent the value of the book itself.
Still, I never imagined that the books I bought to learn about investing would have such a price tag.
Since I like the content of these books, I have no intention of selling them.
Pulling out my old books this time, I was reminded once again that there are books I still keep on hand like this.
7. I still check the investment book section at bookstores
Even now, when I go to a bookstore, I frequently check books related to investing.
Recently, I feel like I see more books about investing using AI.
Perhaps these investment methods will become more widespread from here on out.
Even if you have been investing for a long time, there are things you don’t know, and I am also interested in encountering new methods.
However, I think the way I interact with books has changed a little between the past and the present.
When I first started, there was so much I didn’t know, and I had a desire to acquire as much knowledge as possible.
Now, I don’t think it’s necessary to incorporate everything written in the books I read into my own investing.
If there is one way of thinking that stays with you from a single book, that is enough.
Sometimes things are useful right away, and sometimes the meaning only becomes clear after your own investing has changed.
Ideas that I wasn’t very interested in in the past might look different if I read them now.
Thinking about it that way, it seems interesting to try re-reading books I read a long time ago.
Conclusion
Having read over 100 investment books, I have learned many things, such as the basics of buying and selling and how to read charts.
Even so, there was the difficulty of executing stop-loss orders, and there were investment methods that didn’t suit me.
There are also things that I didn’t quite grasp when I first read them, but which I began to understand a little after I started focusing on long-term investing.
Read books, and actually try investing.
While experiencing things not going as planned, I recall what I read in books again.
In my case, I think it is through such repetition that my own way of investing has gradually taken shape.
Just because I have read over 100 books does not mean I have found the correct answer to investing.
Even so, the importance of surviving in the market, the mindset of increasing assets over time, and finding an investment method that suits me.
Looking back, I feel that these are the things that have remained in my current investing.
And, even if we read the same book, the parts that catch my attention now must be different from those that caught my attention 15 years ago.
This time, having picked up an old book for the first time in a while, I felt like reading it through once more.
Words that I skimmed over back then might look a little different to me now.
■ Related notes
・Three things I still check on charts after being obsessed with technical analysis