The holiday season is fast approaching, and most of us are thinking about finding the right gift for everyone on our list. Whether you are buying a present for a novice investor or an expert, there's an investment book on this list to suit every need. You might even want to pick up a book or two for yourself!
"Great by Choice: Uncertainty, Chaos and Luck - Why Some Thrive Despite Them All" (2011) by Jim Collins
In the follow up to the best seller "Good To Be Great," Jim Collins uses nine years of research to focus on why some corporations survive through economic hardship, while others don't. Collins uses straight-forward analysis and engaging stories to illustrate what makes companies great, from development to growth to surviving competition and adversity. What separates this book from others in its class is its focus not only on the individuals and corporations, but on the effects of the often unpredictable environments outside of it all. A Jim Collins fan will not be disappointed by this book.
"The Black Swan: The Second Edition: The Impact of the Highly Improbable" (2010) by Nassim Nicholas Taleb
A Black Swan refers to an outlier event occurring, the consequences of which are massive and herald in a paradigm shift. Nassim Nicholas Taleb uses this metaphor in his dismantlement of mainstream financial discourse, focusing his assault on Wall Street orthodoxy related to portfolio construction, risk management and quantitative analysis. Highlighted in this book are solutions to the Black Swan event, among which he advocates are "robustness" and the concept of anti-fragility, where the occurrence of high impact events are not only weathered, but can result in gains. It is a great read for financial skeptic on your Christmas list.
"Blood on the Street: The Sensational Inside Story ofHow Wall Street
Analysts Duped a Generation of Investors" (2005) by Charles Gasparino
A sordid tale about the tech stock bubble written by a talented financial journalist, "Blood On The Street" provides an inside look at how Wall Street's top tech analysts duped brokers and investors. Jack Grubman at Salomon Smith Barney, Mary Meeker at Morgan Stanley and Henry Blodgett at Merrill Lynch had the power to move markets. When they dished out "buy" recommendations for tech stocks, legions of brokers went to work touting their picks. Brokers and their clients all got burned when it turned out that those "buy" recommendations had nothing to do with investing fundamentals but were simply designed to help other divisions of the analysts' employer firms suck in huge fees from the companies in question.
"Barbarians at the Gate: The Fall of RJR Nabisco" (2003) by Bryan Burrough and John Helyar
Experienced financial journalists Bryan Burrough and John Helyar capture the essence of the leveraged buyout craze through a narrative look at the players involved in the groundbreaking $25 billion deal to take control of an American icon. It is a tale rife with greed, corruption, secret deals and manipulation of every kind.
"The Richest Man in Babylon" (2002) by George S. Clason
This book is a rare find in the world of financial services literature. Written in parable form, it seems almost hokey until you realize just how much wisdom the author has packed into this slim volume. Instead of the jargon, hot tips and glorification of get-rich-quick schemes offered by so many books these days, this work of art provides a heaping dose of financial common sense. It's the perfect choice for anyone who cringes at the sight of yet another portfolio manager or prognosticator touting the latest new idea.
"When Genius Failed: The Rise and Fall of Long-Term Capital Management" (2002) by Roger Lowenstein
When Salomon Brothers arbitrage genius John Meriwether founded a hedge fund and staffed it with the best and brightest minds in the country, including two Nobel Memorial Prize winners in economics, there was no doubt that his brainchild was destined to be a winner. The fund's principals were so convinced that their success was inevitable that they held losing positions until the Federal Reserve had to orchestrate a bailout to avoid a broader collapse in the financial markets. Lowenstein provides an inside look at how it all happened.
"The Wall Street Journal Guide to Understanding Money and Investing" (1999) by Kenneth M. Morris, Virginia B. Morris and Alan M. Siegel
Perfect for the novice investor on your list, this book opens with the history of money and closes with an overview of options trading. In the pages in-between, it provides a thorough, reader-friendly introduction to stocks, bonds and mutual funds. This book should be required reading for anyone interested in building a firm foundation of market knowledge and establishing a basic understanding of Wall Street's vocabulary.
"John Bogle and the Vanguard Experiment" (1997) by Robert Slater
John Bogle founded the Vanguard Group and turned it into a mutual fund powerhouse by building on a foundation of low-cost index funds. Bogle's story is a fascinating look at how one man can have an enormous impact on an entire industry and shape the habits of millions of investors. It's a well-told tale about one of the good guys in a business where good guys are sometimes hard to find.
"Extraordinary Popular Delusions and the Madness Of Crowds" (1995) by Charles Mackay
First printed in 1841, this timeless classic delves into the history of bizarre behavior perpetrated by large crowds. It's a detailed look at the impact of fear, greed and euphoria on human behavior. While it's not the most gripping book you will ever read, it does provide timeless lessons that those who fail to heed are doomed to repeat.
"Den of Thieves" (1992) by James B. Stewart
Professional journalist James B. Stewart brings to life a story of high finance, insider trading and scandal. Telling the tale of how four of the biggest and most infamous names on Wall Street in the '80s (Ivan Boesky, Michael Milken, Martin Siegel and Dennis Levine) created the greatest insider-trading ring in financial history and almost got away with it, this book paints a disturbing portrait of the temptations of greed.
The Bottom Line
You can count on each of these books to provide some insight, advice and historical perspective or, at the very least, the entertainment of a story well told. Enjoy!