Brian Feroldi Profile picture
May 5, 2021 13 tweets 5 min read Read on X
10 Highly Underrated Books About Money & Investing

A 🧵
1/ 100 Baggers by @chriswmayer

This book studies the best-performing stocks of all time and gives lessons for how to find the next ones
2/ Beyond Wealth by Alexander Green

A collection of life lessons by Alexander Green, who is a former money manager that gave up HUGE money to live a better life

This is the book that I re-read the most
3/ The Education of Millionaires by Michael Ellsberg

This is like "Rich Dad, Poor Dad", but with FAR more details. A superb read with tons of practical advice.
4/ The Emotionally Intelligent Investor by Ravee Mehta

If your behavior is wrong, what you invest in won't matter.

Ravee breaks down how to make sure you get your investing behavior right.
5/ Investing for Growth By Terry Smith

A collection of Terry Smith's letter to investors. Terry is a wonderful investor with a terrific track record. He buys high quality companies and then does nothing.
6/ The Joys of Compounding by @Gautam__Baid

A book about "value investing" that also touches on self-learning and business wisdom.
7/ The Millionaire Fastlane by MJ Demarco

A book filled with practical advice for how to speed up wealth creation
8/ The One Page Financial Plan by @behaviorgap

I love it when books take a complicated subject and makes it simple. This book does just that with money & financial planning.
9/ Only The Best Will Do by Peter Seilern

I'd never heard of Seilern before, but he also invests for high-quality growth like Terry Smith. This book is all about why you should find & invest in the best businesses you can and ignore everything else.
10/ Warren Buffett & The Interpretation Of Financial Statements by Mary Buffett

Want to learn accounting? This book is fantastic! It goes line by line through financial statements and shows you how Warren Buffett thinks of them
If you want a list of other great books that are more mainstream, here are the top 15 books that changed my financial life:

If you are curious about the book that I'm writing, all the details that have been released thus far can be found here:

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More from @BrianFeroldi

Aug 16
The P/E ratio SUCKS.

It’s a flawed metric that deceives investors.

Here's exactly why the P/E ratio can be INCREDIBLY misleading (and what to use instead): Image
The P/E ratio's flaw is that the "earnings” can be misleading.

If “earnings” aren’t sustainable, or are artificially inflated/depressed, the P/E ratio will be wrong.

Here's all the reasons why that can happen...
1: Accrual Accounting

The GAAP income statement uses accrual accounting.

Accrual accounting is useful, but it’s basically an accountant’s opinion.

Here are some of the expenses that can cause “earnings” to be higher or lower than the actual cash flow of a business Image
Read 19 tweets
Aug 15
7 visuals every investor should memorize:

1: In the long run, stocks win: Image
2: You make far more money by holding through bull markets that you lose by holding through bear markets. Image
3: Investors are their own worst enemy.

Why do they underperform?

Their behavior. Image
Read 8 tweets
Aug 13
The Rule of 72 is the MOST IMPORTANT "mental math trick" for investors to know.

Here's how it works:
Humans tend to think *linearly*.

When we see a curve, we mentally approximate it by a straight line.

This helps us cope with changes in the world around us. Image
But in finance/investing, we need to think *exponentially*.

Money compounds.

Growth doesn't happen at a constant pace; it *accelerates* over time.
Read 16 tweets
Aug 12
Tom Engle has lived off of his portfolio for 40 years (!!!)

How? He's an incredible investor with a BRILLIANT cash management strategy.

Here's exactly how it works (step by step): Image
Let's say Tom's portfolio is worth $100,000 in the middle of a bull market.

Tom is happy with this number and wants to protect it.

He mentally calls this $100,000 his "protected value."

All his cash management decisions are based on this number. Image
Tom always keeps an eye on the macro and has a feel for if the market is:

▪️Under-valued
▪️Fairly-valued
▪️Over-valued

Tom keeps ~12% of his "protected value" in cash in a fairly-valued market.

That's $12,000 Image
Read 19 tweets
May 17
8 visuals every investor should memorize:

1: In the long run, stocks win: Image
2: You make far more money by holding through bull markets that you lose by holding through bear markets. Image
3: Investors are their own worst enemy.

Why do they underperform?

Their behavior. Image
Read 9 tweets
May 16
My worst investing decisions ever all contain the same word:

Sell

But that doesn't mean I "buy and forget"

Here are the exact reasons I will exit an investment: Image
1: Thesis Busted

Translation: I was wrong

This could be because:
▪️Brand deteriorated
▪️Management isn't executing
▪️I misjudged the moat
▪️Rising competition

If the original reasons I bought are no longer valid, I admit defeat and move on
2: Accounting Irregularities

If I can't trust the numbers, I'm out.

Accounting Irregularities = You are dead to me forever
Read 14 tweets

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