Bored? Here’s a hedge fund’s recommended reading list
Hat tip to Marketfolly who did a nice couple of posts on the favorite reads of hedge fund Blue Ridge Capital.
Behavioral Finance
Investment Psychology Explained: Classic Strategies to Beat the Market by Martin Pring: A ‘back to basics’ book on how to beat the market.
Beyond Greed and Fear by Hersh Shefrin: A look at how bias, perception, and psychology run the stock market.
The Money Game by Adam Smith: Book hypothesizing that the stock market is just a game; explains technical analysis, fundamental analysis, psychology, and more.
Influence: The Psychology of Persuasion by Robert Cialdini: Understanding the foundation of persuasion and marketing.
The Inefficient Stock Market by Robert Haugen: ‘What works and why.’ This book looks at how the market is inefficient and argues that financial models based on economic behavior cannot explain certain aspects of (often irrational) market behavior.
Why Smart People Make Big Money Mistakes by Gilovich & Belsky: Close examination of the psychological reasons behind how and why people invest, spend, and save.
The Psychology and Judgment of Decision Making by Scott Plous: Examination of your own psychology of decision making.
How We Know What Isn’t So by Thomas Gilovich: Focuses on errors humans make when forming opinions and trying to comprehend things.
Decision Traps: 10 Barriers to Brilliant Decision Making by J. Russo: Training to become a good decision-maker (one of the most important business skills out there).
Extraordinary Popular Delusions and the Madness of Crowds by Tobias & McKay: A book discussing “the herd mentality” at its finest, where the masses collectively assemble and follow each other like lemmings.
Hare Brain, Tortoise Mind by Guy Claxton: How to handle complex situations by way of perception, problem solving, and creativity.
The Moral Animal: Why We Are the Way We Are by Robert Wright: Evolutionary psychology and human nature.
Economics
Capitalism and Freedom by Milton Friedman: A must-read by one of the most well-known economists out there.
The Lexus and the Olive Tree by Thomas Friedman: A book that deals with understanding globalization and argues that globalization (the Lexus) is “the central organizing principal of the post-cold war world.”
Economics in One Lesson by Henry Hazlitt: With an introduction by Steve Forbes, this book is a great primer on economic thinking.
Eat the Rich by PJ O’Rourke: A tour of two years worth of economic practice, focusing on good capitalism and bad capitalism, among other things.
Analytical
The Art of Short Selling by Kathryn Staley: Examples and instructions on how to find overpriced stocks and profit from their decline.
Financial Shenanigans: How to Detect Accounting Gimmicks by Howard Schilit: How to identify inflated profits, suspicious write-offs, and shifted expenses.
A Random Walk Down Wall Street by Burton Malkiel: A great investing guide covering all asset classes.
One Up On Wall Street by Peter Lynch: A classic with contributions from John Rothchild as well.
The Warren Buffett Way by Robert Hagstrom: Outline of Buffett’s tenets for investing.
Security Analysis by Graham & Dodd (also a staple on our fundamentals recommended list): Hands down THE best book on fundamental analysis and value investing principles.
Common Stock and Uncommon Profits by Philip Fisher: Investment philosophies from a widely regarded investor.
Winning the Loser’s Game: Timeless Strategies for Successful Investing by Charles Ellis: Growing with the markets, rather than fighting them: Topics ranging from compounding to fighting down-cycles.
Built to Last: Successful Habits of Visionary Companies by Collins & Porras: Evaluation of what makes companies “great” and how to spot those with solid products, a great brand, and a bright future.
Against the Gods by Peter Bernstein: Comprehensive guide to understanding risk and probability throughout history.
Biographical/Historical
The Money Masters ( & The New Money Masters) both by John Train: Covers experts on various schools of investing thought: growth, value, emerging markets, turnarounds, top-down, bottom-up, and more.
No Bull by Michael Steinhardt: Autobiography by one of the first true hedge fund managers out there. His firm survived the collapse of the 1960’s.
Soros on Soros: Staying Ahead of the Curve by George Soros: An interview with Soros (an entire book’s worth) regarding his investment philosophies and more.
Where Are the Customers’ Yachts? by Fred Schwed: Humorous and entertaining book about the hypocrisy and folly of Wall Street (sounds like our kind of book!)
The New Market Wizards & Interviews with Top Traders both by Jack Schwager (and staples on our reading list): Inside look at some of the best traders in the game, including many fund managers who we cover on the blog
Reminiscences of a Stock Operator by Edwin Lefevre (also on our previous lists): Takes you inside the mind of a trading and provides tons of trading wisdom and insight.
Classic II: Another Investor’s Anthology by Ellis & Vertin:
The Great Game by John S. Gordon: History of how New York became the world’s “preeminent financial power.”
Famous First Bubbles by Peter Garber: Explanations of the three most famous bubbles in history: Dutch Tulips, Mississippi Buble, and the South Sea Bubble.
Chainsaw: The Notorious Career of Al Dunlap by John Byrne: Documentation of the rise and fall of a man known for downsizing corporations for short-term shareholder gain.
The Essays of Warren Buffett by the Oracle himself: Lessons from Warren Buffett over the years.
Go-Go Years: Drama and Crashing Finale of Wall Street’s Bullish 60s by John Brooks: A look at the rise of growth stocks in the 1960’s that led to the ultimate fall in the 1970’s.
Baruch: My Own Story by Bernard Baruch
Leave a Reply