Summer reading list with a finance slant
To say I enjoy reading would be an understatement. A large part of my day involves reading — research reports, industry trade articles, investing blogs and a smattering of geopolitical content.
I also try to read anywhere from 24 to 30 books a year. Reading a great book can offer a lifetime of education or insights that pay off in multiple ways. One of the most asked questions I get is “Can you recommend a few books on investing/economics/finance.” Rather than offer up classics and common tomes I will offer some of my less well-known favourites to consider for the summertime break:
• Why Nations Fail: The Origins of Power, Prosperity and Poverty by Daron Acemoglu and James A. Robinson
Not exactly easy reading but an excellent and wide-ranging historic account on why some countries just can’t get ahead or why some great countries have fallen. In one section the authors discuss the economic decline of Venice that was overcome by increasingly extractive political and economic intuitions. One of my favourite paragraphs: “Today the only economy Venice has, apart from a bit of fishing, is tourism. Instead of pioneering trade routes and economic institutions, Venetians make pizza and ice cream and blow coloured glass for hordes of foreigners … Venice went from economic powerhouse to museum.”
• The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom and Enlightenment by Guy Spiers
A more intimate and personal journey of an investor that offers deeper emotional aspects involved in investing and life in general. Guy does an excellent job of narrating examples of what one could consider ins setting up the right environment for value investing and offers some rules and checklist items to consider. To quote: “Value investors have to be able to go their own way. The entire pursuit of value investing requires you to see where the crowd is wrong so that you can profit from their misperceptions. This requires a shift towards measuring yourself by an “inner scorecard”. To become a good investor, I would need to come to an acceptance of myself as an outsider. The real goal, perhaps, is not acceptance by others, but acceptance of oneself.”
• The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike
This is a great read for the executives out there. It covers a set of principles that eight corporate leaders eschew that helped lead to massive shareholder returns. It could be considered the bible on capital allocation and its importance. To quote Thorndike: “Essentially, capital allocation is investment, and as a result all CEOs are both capital allocators and investors. In fact, this role just might be the most important responsibility any CEO has, and yet despite its importance, there are no courses on capital allocation at the top business schools.”
• The Little Book of Behavioral Investing by James Montier
James Montier’s book titled Value Investing: Tools and Techniques for Intelligent Investment is one of my all-time favourites, but this book is a much easier read. Although small, this book is packed full of great information and offers an excellent condensed introduction to common human instincts and irrationalities that hamper successful investing. It offers numerous studies and narrative on a large variety of biases. One of my favourite quotes: “Despite the fact that accuracy increases only marginally as the information increases, confidence explodes.”
• Nathan Kowalski CPA, CA, CFA, CIM, FCSI is the chief financial officer of Anchor Investment Management Ltd and can be contacted at email@example.com. Disclaimer: The sole responsibility for the content of this article, lies with the author. It does not necessarily reflect the opinion, policy or position of Anchor Investment Management Ltd. The content of this article is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy or for any other purpose. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by the author to be reliable. They are not necessarily all-inclusive, are not guaranteed as to accuracy and are current only at the time written. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. Readers should consult their professional financial advisers prior to any investment decision. The author may own securities discussed in this article. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. The author respects the intellectual property rights of others. Trade mark or copyright claims should be directed to the author by e-mail.