What do I mean by a 'Genre Review'?
From time to time I get an itch for a topic and want to learn everything I can. This usually results in me reading 5-10 books on the subject, chosen by spending a few hours poring over reviews and winnowing down to a shortlist. One of my frustrations is that it's often hard to find the 'best' books on a topic, hard to distinguish between great books and books filled with fluff and anecdotes. Most book reviews just review the book itself, and rarely try to make a comparison with other similar books in the same field.
A 'Genre Review' is what I'm calling my collective review of all the books I've read on a subject, sorted into those that are must read, maybe read, and don't read. I'm hoping I can save some time for anyone else who decides they want to read all about the same subject that I have. Using this, you can eliminate some of the crap and focus on some of the better books in the area, with the confidence that I have also read the other books you could be spending money on.
When I started working full time, I realized I had no idea about savings, or how to invest. I didn't know the difference between a stock or a bond, what risks were involved with investing or even how to buy a stock. I decided that needed fixing, and read a series of books on the topic that were either well reviewed or recommended by friends. This 'Genre Review' is on investment and which books I found most useful.
Disclaimer: I've not gotten rich off investing yet... so maybe these books give bad advice. Who knows! If you have other recommendations, please chime in down in the comment section.
Must Read
The Intelligent Investor
This is THE book to read if you know nothing about investing and want to change that. Comprehensive and deep, I walked away from this finally feeling like I knew what the hell to do with my savings (whenever I have some).
Full Review: The Intelligent Investor - Benjamin Graham and Jason Zweig
The Black Swan
The second of Taleb's "Incerto" trilogy. A philosophical essay on the nature of uncertainty and unpredictability, 'black swan' events and how to take advantage of them as well as insure yourself against them. Taleb became famous because he wrote this book just before the GFC, essentially predicting it (which is ironic considering his main point is that these events aren't predictable). This taught me more about the boundaries of statistical knowledge and practice than my degree did, as well as a whole new way to look at risk, both to mitigate it and take advantage of it.
Maybe Read
Warren Buffett's Ground Rules
Outlines Warren Buffett's general investment strategy. An interesting case study of a very impressive guy, but because he was already dealing with millions even when he started his hedge fund, it's mostly academic for someone like me who is not a millionaire.
If you are interested to know about how the game is played at the fund level, or just interested in distilling what learnings you can from one of the richest guys in the world, then it might be worth a shot. Otherwise, save your money and read his freely released annual letters, or skip it.
A Random Walk Down Wall Street
Most of the content in this is the same type of stuff as The Intelligent Investor, but with a slightly less formal writing style, an update for recent years (the copy I had was updated after the GFC) because the author is still alive, and some concrete 'plans' that you can follow to allocate your investments. These plans are probably the biggest differentiator for me; the plans outline how to allocate your money between different types of investment (stocks, bonds, cash, real estate), depending on age and risk adversity, as well as advice on how to actually find a place to do it.
If you prefer to 'do it yourself', and you like numbers, then I still recommend the The Intelligent Investor instead of this, for the deeper coverage of concepts and history. If you found it hard to read, however, this book explains most of the same stuff, and has some really practical advice, which is a huge plus to me.
Don't Read
The Millionaire Next Door
Uses demographic studies about America to suggest that most millionaires in the U.S. are not high flying corporates, but blue collar business owners or just average people that are careful with their money.
The book shows that regardless of how much money you give them, people either have good habits and successfully save money, or bad habits and... don't. Many low income immigrants who work hard and save for their family manage to amass small fortunes, and most people that win the lottery end up back where they started, because their spending habits don't change. The main thesis is that you don't need a high income to become a millionaire - although it helps - but just that you need to be smart with your money and how you invest it. And the main learning it tries to impart is that you shouldn't try to keep up with the Jones', but instead just be frugal and disciplined.
I don't recommend reading it because it takes a whole book to say what I did in a couple of paragraphs, although the message is worth knowing.
Flash Boys, and Flash Boys: Not So Fast
Interesting to read if you want to know how HFT works, useless for practical investing advice. If you were to read, make sure you read both, because the second debunks much of the first. not practical advice though, so avoid if that's what you're here for.
Fooled by Randomness
If Taleb hadn't written his other two books I probably would highly recommend this, but as it stands The Black Swan covers most of the stuff in this book plus more, and in my opinion shows a few extra years of thought about the topic and more clarity of understanding.
If you need a few hundred extra pages to convince you that most people are blindsided by random events both positive and negative, then read this after The Black Swan.
On the list to read in future
Over time I'll read more books and update this list. Here are the next few I have in mind:
- What I learned losing a million dollars - Charles Schwab
- The Interpretation of Financial Statements - Benjamin Graham
- Your Money Ratios - Charles Farrell
- Irrational Exuberance - Robert Shiller
- Poor Economics - Abhijit Banerjee, Esther Duflo
Recommendations and reviews welcome in the comments below!
