Successful investors have an unquenchable thirst for knowledge. As such, they often read voraciously. But while there are thousands of well-written books on stocks and finance lining the shelves of your local bookstore, there are a few stalwarts that seem to be in the collections of the savviest investors. In this article, we'll take you through some of the top reading materials for savvy investors and show you why it pays to read them.

Does Reading Pay?
Reading is vital for two reasons: First, it allows investors to keep up to date on the market; second, well-written business books provide a thoughtful analysis of the past as well as valuable insights about the future, providing an outline for what works and what doesn't on Wall Street and in the business world. In other words, reading the right books can give investors a road map to financial freedom and success. In and of themselves, these two benefits are invaluable.

Of course, not all books are created equal. Some authors, looking to capitalize on popular trading fads, short-term-trading-based trends or day trading may not do an adequate job of teaching a reader everything he or she needs to know. Others however, offer strategies that when applied to the reader's individual financial situation may allow them to reap enormous financial benefits. The key is being able to separate the wheat from the chaff.

Books Worth Investing InIf you want to start reading about investing, the following list provides some classic and lesser-known titles to get you started.

"Security Analysis" (1934)By Benjamin Graham and David DoddThis classic is without a doubt considered to be the bible of the securities industry. Written by two legendary investors and scholars, the book outlines exactly how to analyze the three major financial statements. Although written long ago, the content is just as meaningful for investors today as it was in the mid- to late-1930s.

You'll learn that securities analysis isn't just for the bulge bracket stock analyst. In fact, it teaches ideas and methods that empower the individual investor. But perhaps most importantly, it imparts the lesson that being a good investor is more about being a good detective than being a good statistician. Whether you are a stock or a mutual fund investor, this book will leave you with the feeling that you really can have control over your financial destiny.

"Liar's Poker" (1989)By Michael LewisThis book revolves around daily life in the Salomon Brothers mortgage trading department during the '80s. Lewis details his rise as a trader while outlining the hurdles he had to overcome to make it in the most cut-throat of businesses on "the Street".

Lewis goes on to discuss not only the way various types of bonds function, but also what they are being used to finance. He also highlights how emotional some traders can be, and how this can affect the volatility of certain securities issues as well as the broader market. (For related reading, see The Madness Of Crowds.)

"Grow Rich Slowly: The Merrill Lynch Guide To Retirement Planning" (1993)By Don Underwood and Paul BrownIn this book, Underwood, a former Merrill executive, and Brown, a former editor at Forbes Magazine, outline and review a range of issues from dollar cost averaging to using margin to leverage investments. The pair also discusses how a number of investment vehicles including stocks, bonds and mutual funds can be used to enhance an investor's retirement portfolio. Ultimately, the book teaches readers to not count on social security, and to plan for their own retirement. (To learn more on this subject, read Retire In Style and Determining Your Post-Work Income.)

"Buffett: The Making Of An American Capitalist" (1995)By Roger LowensteinThe book outlines the life of the legendary investor Warren Buffett. It discusses his childhood, education and early life experiences. The book also delves into Buffett's mindset. Specifically, it discusses his yearning to buy stocks (and, really, all things) on the cheap, and to discover underappreciated assets. Buffett's investing techniques and the details of some of his successful and not-so-successful investments are also offered.

The book provides an invaluable look inside the psyche of one of the world's most respected investors. While it doesn't offer the reader anything noteworthy in terms of quantitative tools to analyze a company, it does provide a feel for the mindset one must have to be a successful, long term investor. (To read more about the Oracle of Omaha, see Warren Buffett: How He Does It, What Is Warren Buffett's Investing Style? and Financial Wisdom From Three Wise Men.)

"Economics On Trial: Lies, Myths and Realities" (1990)By Mark SkousenSkousen, a professor and long-time author has made a name for himself by making advanced predictions about economic events that turned out to be right. For example, he predicted that Ronald Reagan's tax cuts would stimulate the U.S. economy and lead to unprecedented economic growth.

In this book, Skousen outlines many of the myths and realities associated with the field of economics. Specifically, he looks at several prominent academic texts, and debunks some of their major theories. Perhaps Skousen's biggest accomplishment, however, is teaching the reader how tax cuts can lead to increased revenues for the government, allowing both businesses and individuals to prosper.

This book is sure to leave you with a much better picture of how the economy works, definitely more than you'll learn in a typical Economics 101 class. (To learn more, see Economics Basics.)

"Financial Shenanigans: How To Detect Accounting Gimmicks and Fraud" (2002)By Howard SchilitThis book provides detailed information about how public (and private) companies artificially inflate their earnings by booking sales in improper periods, as well as how some companies make up journal entries to fool their auditing teams and boost financial results.

The book offers investors the in-depth accounting knowledge they'll need to interview management teams, or read a company's 10-K to determine which companies are on the up and up, and which are bending the rules to make their earnings (and their stock) appear more attractive. (For more insight, check out Cooking The Books 101 and Common Clues Of Financial Statement Manipulation.)

"Confessions Of A Street Addict" (2002)By James J. CramerJim Cramer's book provides an overview of how he became involved in investing and how he went on to run one of the most successful hedge funds on Wall Street. Where Cramer really hits the nail on the head, however, is in his discussion of how hedge funds work.

Cramer gets right into the crude tricks he's used to prop up his positions, as well as strategies he's used to hedge himself against market downturns. In this respect, this book is both timely and invaluable. (For related reading, see Mad Money ... Mad Market? and Taking A Look Behind Hedge Funds.)

"Midas Investing: How You Can Make At Least 20% In The Stock Market This Year And Every Year" (1996)By Jonathan SteinbergSteinberg made a name for himself as a hedge fund manager, and as the founder of a national magazine, Individual Investor. In this book, Steinberg outlines his theories on investing. Steinberg primarily uses the Graham and Dodd value-investing approach (see book above). He discusses how to read financial reports and explains how investors can maintain a conservative mindset. He differs however, from Graham and Dodd in that he also screens for other catalysts in companies/stocks, which include insider buying, aggressive (almost hyper) earnings growth and emerging themes.

Bottom LineInvestors should read as much as they can about economics, accounting, investing and the psychology behind each of these arts. And the above list of texts is a great place to start.

To see other books Investopedia's authors have recommended, check out Books Worth Investing In and Ten Books Every Investor Should Read.