A Book Investors Should Read Immediately

"After a lifetime of making money and observing better men and women than I fall by the wayside, I am convinced that fear of failing in the eyes of the world is the single biggest impediment to amassing wealth." – Felix Dennis, How to Get Rich

Felix Dennis is one of Britain's wealthiest men. 

He wrote a book in 2006 calledHow to Get Rich. Normally, I wouldn't pay much attention to a book with that kind of title. There must be hundreds of books with similar titles and they are all worth not much. However, at the insistence of a trusted friend, I did read this book shortly after it came out.

The book is very entertaining. Dennis is a good writer, it turns out. And the book is quite blunt about the lessons Dennis learned in becoming a rich man. It is also personal, in that he tells you in some detail about his own failings in life and business. It is the best book of its kind that I have ever read.

There is so much fear in the markets right now... and it made me think of the Dennis quote up top, which is one of several passages I have marked in my copy of the book.

Fear has its uses, of course. Fear keeps you from crossing streets without looking both ways. And fear of losing all your dough prevents you from throwing it all into a little penny stock you are sure as hell will trade for $20 soon.

But fear can also prevent you from making money in the stock market, because when the bargains are best is often when fear is at its highest. 

Everybody sounds smart when they point out why things won't work. As Dennis writes: "Everywhere you look, you will find men and women who appear to take perverse pleasure in pointing out the shriekingly obvious that if a new venture does not succeed, it may result in failure."

He goes on to say he regrets most of those times in his life when he retreated to safety because of naysayers. "I would rather have tried and failed, in most cases, than have taken the safer course that so often appears wise in the abstract."

To get rich, Dennis says – and this applies to investing as well – you have to grow a carapace, or a sort of armor. "Not so thick as to blind you to well-constructed criticism and advice, especially from those you trust... but thick enough to shrug off the inevitable sniggering and malicious mockery that will follow your inevitable failures."

So as you look over some of the bombed-out stock prices in the market today, I'd encourage you to think about these ideas. I've repeatedly told my readers that many of the stocks they're holding will trade for 10 times their current prices at some point in the future. They are that beaten down and cheap. Oil service stocks are incredibly cheap. Mining stocks are incredibly cheap. Some of the world's best "holding companies" (like my friend Dan Ferris wrote about here) are selling at fire-sale prices.

Buying now and holding for years will make the frustrations and the occasional big losses worth it. It doesn't seem like it now, but I think it will happen.

Also, I'd encourage you to grab a copy of Dennis' book. Chapter 17, "A Recap for Idlers," is one of those things worth coming back to every couple of years. It's full of good nuggets of wisdom about wealth and life – and it's not what you'd expect.

Even if you don't read Dennis' book, please take this "fear" lesson to heart. When the thought of buying stocks scares you to death, it's often the very best time to do so.

Sincerely,

Chris Mayer

Editor's note: Chris Mayer is the editor of Capital & Crisis, a monthly advisory we consider required reading at DailyWealth. With Chris' research, you can always count on contrarian investment ideas you won't read about anywhere else. Click here to learn more about Capital & Crisis and five of Chris' favorite income investments.