Anyone who follows my work knows that I am a staunch advocate for index funds and believe that stock-picking is a very difficult road. That said, there are some undeniable facts about stock-picking:

• All of the great fortunes — Rockefeller, Carnegie, Gates, Buffett — were earned by way of owning one stock.  A very good one, but nonetheless, one stock.
• Though it is difficult and rare, there are investors who are able to outperform market averages by picking the right stocks. It’s hard, but it can be done.
• Stock-picking can be fun.

So, while I do not recommend stock-picking to anyone — since the data clearly show that the odds are against you — I do nonetheless recognize these undeniable facts. So, if you really want to go the road of stock-picking (with a small and manageable portion of your portfolio), then these are some books and resources I would recommend as a stock-picking “curriculum” of sorts:

The Intelligent Investor by Ben Graham – This book was written in the 1940s by Ben Graham, who was Warren Buffett’s teacher, employer and mentor.  Buffett often cites this book as the one that got him really interested in investing.  It is dense, but I’d recommend starting with these two chapters: “The Investor and Market Fluctuations” and “Margin of Safety as the Central Concept of Investment”.

Common Stocks and Uncommon Profits by Phil Fisher – Most people don’t know much about Fisher, but he was a giant in his time.  Some of his examples are dated — for example, he talks about color TV as a new technology — but the principles still apply.  Unlike Ben Graham, Fisher was a growth investor, so I would read this together with The Intelligent Investor to clearly understand the difference between growth and value investing.

One Up on Wall Street by Peter Lynch – As most people know, Lynch had an outstanding track record running a fund at Fidelity through the 1980s.  This book is both entertaining and incredibly informative.  Like Fisher, Lynch was a growth investor and coined the term “ten bagger”.  He didn’t get bogged down in Graham’s valuation discipline.  Instead, he just looked for good companies that looked like they were going to get much bigger.  And it worked, very well.

The Little Book That Beats the Market by Joel Greenblatt – Greenblatt ran a hedge fund that for years racked up staggering returns (easily offsetting his fees).  He was in the tradition of Graham, and he provides in this book a simple formula for identifying value stocks.

The Most Important Thing by Howard Marks – Marks is the chairman of an investment firm on the west coast, but his writing has a wide audience.  He writes excellent periodic memos, which you can subscribe to on his website.  This book is a compilation of some of his best pieces.  Marks focuses a lot on the emotional side of investing and really makes you think.

Note: the real father of investment analysis — and specifically, the notion of intrinsic value — even before Ben Graham, was a fellow named John Burr Williams.  His book is 600 pages and dense, so I don’t really recommend it, but I quote from it and cite the central ideas in this article that I wrote on the importance of intrinsic value.

Finally, if you like podcasts, the one I would recommend is “Invest Like the Best” by Patrick O’Shaughnessy.  He’s not religious about one specific point of view, so he interviews investors of all stripes.  He was a philosophy major in college, so the discussions are always thoughtful and informative.

I feel obliged to repeat that the data are against you if you choose to pick stocks — see, for example, the work of Terry Odean, a professor at Berkeley who has for years studied the results of individual investors. But, if you must, then I think this curriculum is a good place to start.  Good luck and have fun!