Bibliography: Books to Read

Bibliography: Books to Read (ah, eventually...)

There are dozens and dozens of books about investing. However, only a few stand the test of time. If you are going to read any book or books before beginning your investing journey, the first three books are the best choices, in my humble opinion. The rest are books that either are dedicated to investing or financial planning and literacy, except for the last book. The last book is something very special and unusual. You can get all these books at your local library. You can even download them to your mobile device. Do it. Read! (Psst. It will give you an unfair advantage over your fellow students.)

One Up On Wall Street, Peter Lynch
We discuss Mr. Peter Lynch in the text and in the class. He was the portfolio manager of the Fidelity Magellan Fund from 1977 to 1990. During those 13 years, he posted average annual returns of 29% ‒ unbelievable! When his first book was released the critics were ready to pounce on it as a self-idolizing piece of fluff. Nothing could be further from the truth! In this easy-to-read and thoroughly enjoyable book, Mr. Lynch makes a strong case for owning stocks and “buying what you know.” He has a delicious sense of self-deprecating humor that puts the reader at ease. Everyone should read this book!

A Random Walk Down Wall Street, Burton Malkiel
Professor Burton Malkiel was one of the pioneers in the academic research that produced the Efficient Market and Random Walk theories of investing. He eventually served on the board of Vanguard Funds and was involved in the creation of the famous Vanguard 500 index fund in the mid-1970’s. Like Mr. Lynch, Professor Malkiel has a wonderful sense of humor and takes no prisoners! He skewers the Fundamental Analysis theory of investing, the Technical Analysis theory of investing, and even his own Efficient Market and Random Walk theories. Everyone is fair game! If you don’t want to read One Up On Wall Street as your first book, this is the next best choice.

The Intelligent Investor, Benjamin Graham with commentary by Jason Zweig
Eventually, every prudent, long-term investor must read The Intelligent Investor by Mr. Benjamin Graham. However, don’t make this your first book to read. I am warning you! Mr. Graham’s prose is very difficult to penetrate at times. That is why starting with the most recent editions, after every chapter, the very capable finance and investment writer, Mr. Jason Zweig, offers a commentary on Mr. Graham’s concepts and recommendations. We will quote from this book often. Mr. Graham was Mr. Warren Buffett’s teacher and mentor. We will see that Mr. Buffett has taken the teachings to heart and used them to become one of the best investors the world has ever seen.

Security Analysis, Benjamin Graham and David Dodd
Mr. Graham and Mr. Dodd wrote Security Analysis before Mr. Graham wrote The Intelligent Investor. It is often credited with creating the concept of “value investing.” Indeed, Mr. Graham is often called the “Father of Value Investing.” Once you have digested The Intelligent Investor, you can dig into this scholarly tome.

Wall Street People, Charles D. Ellis with James R. Vertin
Who doesn’t like a good story?! Although this book is a bit outdated, it contains a treasure trove of stories about the men and women ‒ mostly men but we are changing this situation, right, Ladies? ‒ that populate the investment world. Some are heroes, some are villains, some are just regular folks trying to do the best they can in a high stress world, all are interesting. In addition, please note that anything that “Charley” writes is worth reading. Mr. Ellis is also noted for his coining of the term “The Loser’s Game” for short-term speculation and trading of securities.

Beating the Street, Peter Lynch
Mr. Lynch’s second book is not as groundbreaking as his first. However, it still is chock full of good stories and tips and techniques from the master and worthy of your attention.

Learn to Earn: A Beginner’s Guide to Investing and Business, Peter Lynch
We may have the story wrong but my understanding is that the folks at BetterInvesting.org asked Mr. Lynch to create a “how-to manual” using his concepts and techniques that he introduced in his first two books. BetterInvesting.org is the organization that sponsors investment clubs.

Any Book Written By, Michael Lewis
Michael Lewis is an awesome writer. Anything he has written is worth your time and attention. I am especially fond of Flash Boys as it shows you just how outgunned we retail investors are against the vast resources of the big boys and girls on Wall Street. His most famous books are The Big Short and Moneyball, both of which have been turned into movies. Again, read anything this man has written. John Williams of the New York Times Book Review wrote, “I would read an 800-page history of the stapler if he wrote it.”

Thinking Fast and Slow, by Daniel Kahneman
For several decades, economists and academicians believed that investors and markets were rational and the investors always behaved in their best financial interests. It took a pair of psychologists to show them just how wrong they were. Daniel Kahneman and his long-time associate, Amos Tversky, turned the field of economics on its head by showing that markets and investors were anything but rational. Dr. Kahneman won the Nobel Memorial Prize in Economics Science in 2002. (Sadly, Dr. Tversky died six years before and the Nobel Prize is not awarded posthumously.)

How to Make Money in Wall Street, Louis Rukeyser
Before CNBC and TheStreet.com and Marketwatch.com, and Yahoo Finance, the only widely broadcast show about investing was Wall Street Week with Louis Rukeyser. For over 30 years, it aired on that Socialist, Communist, Pinko, LIBERAL network known as PBS. This book may be hard to find but it is tremendous fun to read. Not only does Mr. Rukeyser discuss important investing concepts with great clarity, you also get a history lesson of what it was like to invest before the Internet.

Extraordinary Popular Delusions and the Madness of Crowds, Charles McKay
This classic opus was published in the 1840’s. However, Extraordinary Popular Delusions and the Madness of Crowds is still as shocking now as it was almost 200 years ago. Mr. McKay discusses some of the financial improprieties of the previous centuries along with some of the other insane misadventures of humanity such as witchcraft and the Crusades. As one student put it, “It is easier to fool a million people than it is to fool one.” QAnon, anyone?

The Wealthy Barber, David Chilton
The next two books are more about personal financial planning and literacy although they have a bit about investing. The Wealthy Barber is still the easiest to read and most enjoyable personal financial planning book Your Humble Author has ever come across. The numbers are all out of date but the concepts are timeless. Most importantly, Mr. Chilton’s jokes are even worse than mine. Who could ask for more?

The Millionaire Next Door, Thomas Stanley & William Danko
When this book was first published in the mid-1990’s, it shattered many of the myths about millionaires. It also spawned a whole host of copy-cat books, none of which have the clarity and weight of The Millionaire Next Door. Learn about how millionaires really build their wealth. Those of you starting young and following the concepts, techniques, and skills in our class will be joining their ranks eventually … unless the world ends. (If that happens, oh, well! Meet you at the beach. I’ll bring the vodka. You bring the marshmallows.)

The Hero with a Thousand Faces, Joseph Campbell
If there is one book you should read in your lifetime, it is this one. Mr. Campbell has created a “how-to” manual for humans. In The Hero with a Thousand Faces, we learn that we are all heroes on an adventure. That adventure is what we call life. We see how the world’s major religions are calling to us from thousands of years ago. They hope we learn how not to waste this precious gift that we have been given. And if that does not pique your interest, it is also the book that George Lucas used to create Star Wars. Mr. Campbell was on the sets of the first three Star Wars movies as a consultant. Oh, by the way, although they won’t acknowledge it publicly, Disney has stolen from Mr. Campbell many times, the most egregious being The Lion King.