Don’t Forget Books

You have more than enough to read:  emails and websites and research reports and dispatches from The Investment Ecosystem.  But don’t forget books.

Longer reads take you into the nooks and crannies of an idea.  You can try to do that online, but given all of the dead ends and weak material found there, that is hard work.  The nuggets are elusive.  A good book lays them out for you and provides a narrative structure to tie them together.

What to read?  Here are some good lists of books for you to consider.

Barry Ritholtz wrote about “the four intriguing thematic plots that seem to show up the most in finance”:

Greed blinded by arrogance.

Everything you believe is wrong.

Greed leading to fraud.

Michael Lewis books.

Ritholtz provides examples of each.  The second grouping illustrates the range of ways that innovators diverge from common thinking, referencing books about the polar opposite developments of passive investing and whatever Renaissance Technologies does to produce those hard-to-fathom returns.  Plus the revolution of behavioral economics and finance.

As noted, “Only one author gets his own category, and that is Michael Lewis, the poet laureate of American finance.”  Starting with his inside look at the Salomon Brothers trading floor, he has delivered time and again.

Letters to a Young Analyst, an ebook authored by the editor of this site, highlighted others in the investment realm that are “consistently good in terms of the quality of the material, the quality of the writing, and the importance of the issues addressed:  Peter Bernstein (economics and finance), Michael Mauboussin (decision making), James Grant (markets and financial history), Charles Ellis (investment policy, the investment industry, and the profession), Benjamin Graham (security analysis).”

Some of them show up in a fun posting from Ben Carlson, “TL;DR: The Best Finance Books in One Sentence.”

While reading the high points of the canon provides a good base of knowledge for any investment professional, a broader spectrum of reading yields unexpected insights from other disciplines, to say nothing of the joy and growth that can come from a good book.

One broader list to review comes from Broyhill Asset Management.  (Included in this 2021 edition of its “book club” are links to five previous offerings.)  It covers a wide swath, from Anne Lamott’s book on writing, Bird by Bird — and others on creativity — to stories about famous businesses of the day, including Netflix, Twitter, Amazon, etc.  There are also recommendations for remote learning opportunities.  It is put together in an engaging fashion, with lots of thoughtful commentary and a great variety of books to consider.

The “BCG Reading List 2021” offers short summaries about both big, hairy issues (the pandemic, climate change, the common good) and how organizations are recreating themselves.

Morgan Housel is known for his observations on the investment world and his clear and engaging communication.  It’s instructive to see what kinds of books he writes about.  Consider “23 Books That Changed My Life,” or “A Few Good Books.”  The breadth of his reading is likely a key to his success.  That’s a lesson for all of us.

But who has the time to read books?  We all do.  The payoff for the time spent is much greater than the surfing and shallow diving that consumes much of our days.  If you’re struggling to get started, try “Just Twenty-Five Pages a Day,” from Farnam Street.  It works.

Future postings on The Investment Ecosystem will feature in-depth looks at discoveries made by reading (new and old) books.