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July 31, 2002

Eight of the Best

By Gregory Bresiger

Also in this article

Unforgettable Business Classics of the 20th Century

A selection by our reviewer Gregory Bresiger

You may have read it a long time ago and forgot it. Or, somehow in the crush of work and other responsibilities, you always have been meaning to read it, but never have. Herewith is a list of business and investment classics that no intelligent mind and no well-stocked library should be without.

Since this is a small column, I do not pretend to present a comprehensive list. This is merely a short list of books written in the last century, but designed to be read by intelligent people, interested in investing, in every century. Some of these, unfortunately, may be out of print. However, they will likely be available in almost any large library with a good business or economics section.

The Intelligent Investor

by Benjamin Graham

Has value investing gone out of style? Don't worry it will come back. And then this little 1949 tome-written in a clear, simple, unthreatening style--will be back in vogue. Graham goes through the steps of how one separates the junky companies from the pretty good companies and then finds the superior ones. A few extraordinary ones are all that Graham wants, which is why Graham and his most famous student, Warren Buffett, became some of the most successful investors ever.

Common Stocks and

Uncommon Profits

by Philip Fisher

This book, as well as Graham's book, had a tremendous influence on Buffett. With Fisher, the emphasis was on quality, not quantity. He argues that a highly focused portfolio -- one that was non diversified--was the way to succeed. "Great stocks," Fisher said, "are extremely hard to find. If they weren't, then everyone would own them." When an adviser finds these gems, Fisher said, the adviser should load up.

The Art of Speculation

by Philip L. Carret

Carret founded the Fidelity Investment Trust with $25,000 of his own money in the 1920s. He would see his original investment grow to $2 billion in assets as it mutated into Pioneer Fund. Besides managing a fund, he was a bond salesman and a financial journalist. Born in 1896, Carret was an intensely curious and bright man with many interests. He made it to 100 and saw it all. Here, in a slender, well-written book, is the wisdom of his many years. How to understand bear and bull markets, how to trade in unlisted securities, how to read a balance statement are just some of the subjects that Carret treats in a fascinating manner.

A Random Walk Down Wall Street

by Burton Malkiel

The fancy theories of active management come and go, but the market - in its cumulative wisdom - is smarter. Here is one of the bulwarks in the case for passive management and for index funds. Malkiel, in this fascinating book that was updated in a 1995 edition, shows how relying on past performance for selecting the correct investment is usually a bad decision. Better to stay fully invested across several different lines than to try to pick the next hot manager, stock or category of investing. Finally, Malkiel reminds the reader of something that should be remembered, not just in investing, but also in every aspect of life: The experts are often wrong.