Investing & Trading Rules, Aphorisms & Books (2012)

Back in 2011, I pulled together a full run of Trading Rules & Aphorisms.

It turned out to be a worthwhile exercise, and so I began updating this semi annually. This is a list of my favorite traders, analysts, economists and investors views’ on what to do — and what not to do — when it comes to markets.

This is the latest updated version of my:

Trading & Investing Rules, Aphorisms & Books

• Livermores Seven Trading Lessons

• Bob Farrell’s 10 Rules for Investing

• James Montier’s Seven Immutable Laws of Investing

• Richard Rhodes’ 12 Trading Rules

• John Murphy’s Ten Laws of Technical Trading

• Six Rules of Michael Steinhardt

• David Merkel: The Eight Rules of My Investing

• Art Huprich’s Market Truisms and Axioms

• DENNIS GARTMAN’S NOT-SO-SIMPLE RULES OF TRADING

• Lessons from Merrill Lynch

• Louis Ehrenkrantz’ 7 Golden Rules for Investing

• Rosie’s Rules to Remember

• In Defense of the “Old Always” (Montier)

• Lessons Learned from 37 Years of Futures Trading

• Richard Russell’s The Power of Compounding

• The golden rules of investing (India)

• 25 Common Sense Money Tips

If you have any suggestions for any good lists of rules I may have missed, please link to them in comments. If they are worthy, they will get added tot he list.

After this run, I plan on updating this list 2x per year . . .

My own trading rules and favorite Trading Books are after the jump

My (Ritholtz) own rules

• 10 Errors and Checklist for Investors

• Lessons the Guys Who Wrote Dow 36,000 Should Have Learned

• Rules for Shorting

• 15 Inviolable Rules for Dealing with Wall Street

• 10 Psychological, Valuation, Adapative Investing Rules

• The Zen of Trading

Then go to these books — they cover trading and markets generally:

• Stock Market Wizards : Interviews with America’s Top Stock Traders by Jack D. Schwager

Schwager interviewed market legends at the height of their success. What makes the book so worthwhile are the consistent themes that evolve from currency traders, mutual fund managers, commodities traders, hedge fund managers. Regardless of what is being traded, there are related motifs that run throughout.

What results is not a “How to trade” book; instead, it is a book about “How to think about trading.”

• The Investor’s Anthology: Original Ideas from the Industry’s Greatest Minds by Charles D. Ellis

Instead of interviewing famed investors, Ellis gathered their best writings into one collection. He ends up with a series of short chapters by luminaries of days gone by. There is something worthwhile on just about every page. This is another favorite worth rereading every few years.

• Bull: A History of the Boom and Bust, 1982-2004, What drove the Breakneck Market — and What Every Investor Needs to Know About Financial Cycles by Maggie Mahar

The best book about the 1982-2000 market, bar none. There are a surprising number of lessons buried in these pages that will reward the careful reader. I found it both fascinating and informative.

• How I Trade and Invest in Stocks and Bonds by Richard Wycoff

Quite simply, this is one of my favorite books on the markets and investing. The fact that it is from 1923 is totally irrelevant.

Another good book is When to Sell by Justin Mamis. Published in 1970s, it is filled with good observations about developing a sell strategy.

If you want some book ideas for Technicals, have a go at these:

• Technical Analysis of the Financial Markets by John J. Murphy.
• Technical Analysis from A to Z by Steven B. Achelis;
• Encyclopedia of Chart Patterns by Thomas N. Bulkowski;
• Japanese Candlestick Charting Techniques by Steve Nison;

Don’t think you need a full reference library; any pair of these books should do.

Last, there are a full run of books here:

• Reading Is Fundamental

• More Reading Ideas