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December 1, 2015

Christmas presents? Best books for investors

Now that the holiday gift-giving season approaches, I am often asked, which books I recommend for investors. Most books in this category do not stand the test of time. I will therefore list five books that I would still be comfortable with decades from now. You will quickly realize that they are not books about how to get rich quick but about ways that will help you become a wiser and better investor.

  1. Devil Take the Hindmost: a History of Financial Speculation. Edward Chancellor

As Mark Twain said „history doesn’t repeat itself, bit it does rhyme“. If you want to understand the history of financial bubbles, this is an excellent place to start. The author shows the existence of parallels between past speculative bubbles and conditions in our own time. The readers of this highly entertaining book will find out that one constant stands out – what is new is old, only the names and games have changed. Highly recommended.

  1. Thinking, Fast and Slow. Daniel Kahneman

Successful investing isn’t about outsmarting the next guy, but rather about minimizing your own faults. Psychologist Daniel Kahneman, who shared the Nobel Prize in Economics in 2002, probably understands how the human mind works better than anyone else alive. This book can make you think more deeply about how you think. A must read for anyone interested in either human behavior or investing. A brilliant book and a major New York Times bestseller.

  1. Triumph of the Optimists. Elroy Dimson, Paul Marsh, Mike Staunton

If you prefer empirical evidence to story telling, this book is a must read. Neither light reading nor cheap, this book is the most thorough analysis of the long-term returns on stocks, bonds, cash and inflation available anywhere. As a firm where data-driven research and statistical analysis are at the heart of our process, we can highly recommend this book. This is a book that belongs on every investor’s bookshelf.

  1. All About Asset Allocation. Rick Ferri

An excellent investment blueprint, very useful in developing a long-term investment strategy. Similar to classic investment books like John Bogle’s “Common Sense on Mutual Funds” and Burton Malkiel’s “A Random Walk Down Wall Street” – but with a more updated content.

  1. Liar’s Poker. Michael Lewis

Not truly an investment book, but probably one of the funniest books ever written about life on Wall Street. When I started my career in the City of London, this was a must-read book for any aspiring banker and remains as compelling today as it was then. Michael Lewis is a brilliant writer. Probably the best way to look at this book is like a travel book – you are not visiting a country but you are visiting a world, the financial world. A great book if you want to read how the financial industry looked in its hey-days.

 

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