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Must-Have Investment Reads
George recommends these titles for every turnaround investment library:
Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism by Jeff Gramm: Published in 2016, this engaging book recounts several of the more colorful shareholder efforts to change bad management practices. Each chapter is based on a letter written by an activist investor, starting with Benjamin Graham's comparatively genteel pressure at Northern Pipeline to the highly entertaining letter written by Daniel Loeb to Star Gas wondering if the CEO's 78-year-old mom belongs on the Board of Directors.
Security Analysis by Benjamin Graham and David Dodd: A classic title on basic investing strategy that was originally published in 1934 and has been updated several times since. The authors detail techniques and strategies for obtaining success as individual investors, as well the responsibilities of corporate decision-makers to build share-holder value and transparency for your investors.
The Intelligent Investor by Benjamin Graham: Graham’s classic best seller on value investing has taught thousands of people worldwide. This book talks about overall investment policy and the quantitative aspects of investing. Warren Buffett cites it as the most important book that he has ever read about investing. Benjamin Graham was his mentor.
Stocks for the Long Run by Jeremy Siegel: This is a popular and contemporary take on investing and is considered by many to be the definitive guide to financial market returns and long term investment strategies. The author is a professor at the Wharton School of the University of Pennsylvania.
Extraordinary Popular Delusions by Charles MacKay: Related to the area of turnaround investing is the idea of overreacting markets. This classic title is a fascinating study of group psychology and human gullibility.
Corporate Financial Distress and Bankruptcy by Edward Altman and Edith Hotchkiss: This is a more scholarly look at corporate distress and bankruptcy. It is really a must read for students and professional involved with distressed investing or loans. The authors do a nice job of explaining theory to practitioners and the practical side of bankruptcy to theoreticians. Edward Altman is a professor at New York University, and Edith Hotchkiss is a professor at Boston College.
Common Stocks and Uncommon Profits by Philip A. Fisher: Phillip Fisher is one of the most influential investors of all time. His investment philosophies are regarded by many as gospel. Ken Fisher is a successful money manager and a regular columnist for Forbes magazine. He is also Philip Fisher’s son.
The Wall Street Waltz: 90 Visual Perspectives, Illustrated Lessons from Financial Cycles and Trends by Kenneth L. Fisher: In this title the author looks at 90 of the most revealing and provocative financial charts ever assembled and analyzes them according to their origin, historical significance and its relevance to today’s market. A great resource for decades of interest rates, property prices, etc.
The Vulture Investors by Hilary Rosenberg: The author takes you on a fast-moving journey through some of the major bankruptcies of the 1980’s and 1990’s. You get a good preview of the investors that dabbled with distressed bank debt during that period.
Fooled by Randomness by Nassim Nicholas Taleb: The author uses stories and anecdotes to illustrate our overestimation of causality and the heuristics that make us view the world as a lot more explainable than it really is. He looks at the role of luck and extraordinary events investing.
Why Companies Fail by Harlan D. Platt: An academic look at strategies for detecting, avoiding and profiting from bankruptcy. The author is a business professor at Northeastern University.
Bankruptcy Investing by Ben Branch: Great introduction and overview of the world of distressed and bankruptcy investing. The author managed to synthesize a very complicated subject into an easy-to-read and understandable book. The author is a business professor at the University of Massachusetts. He has served as the trustee in several high-profile bankruptcies.
When Genius Failed by Roger Lowenstein: Entertaining and insightful reading on the perils of high finance. Among other things it shows that even Nobel prizewinners can fail at investing.
The Most Important Thing by Howard Marks: The Most Important Thing explains the keys to successful investment and the pitfalls that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate his ideas, Marks teaches by example, detailing the development of an investment philosophy that fully acknowledges the complexities of investing and the perils of the financial world. Howard Marks runs a very successful investment management firm.
Against the Gods by Peter L. Bernstein: Peter Bernstein has written a comprehensive history of man's efforts to understand risk and probability, beginning with early gamblers in ancient Greece, continuing through the 17th-century French mathematicians Pascal and Fermat and up to modern chaos theory.
Value Investing, A Balanced Approach by Martin J. Whitman : A must read for all thoughtful investors interested in a rational, disciplined, risk-averse template for successful long-term compounding. Marty Whitman has been active in deep value and distressed investing for more than half a century. He runs a successful investment management firm.
Margin of Safety by Seth A. Klarman: Seth Klarman, the portfolio manager of The Baupost Group, is a very successful practitioner of the value investing strategy. In this book, he sets out to educate the reader on this concept, stressing the advantages of a risk-averse approach. Although Margin of Safety is currently out of print, the title is still available in .pdf format from various online sources.
Devil Take the Hindmost by Edward Chancellor: In Devil Take the Hindmost, Chancellor takes an entertaining, albeit sobering, look at the history of speculative manias and the mass delusion that surrounds them. The author is a columnist for the Financial Times as well as an investment strategist at a large money management firm.
The Snowball: Warren Buffet and the Business of Life by Alice Schroeder: A frank account of Buffett's life; Alice Schroeder strips away the mystery that has long cloaked the word's richest man to reveal a life and fortune erected around lucid and inspired business vision and unimaginable personal complexity.
John Neff on Investing by Jeff Neff: In this title the author explains how he scoured the daily list of stocks hitting new lows, the "dusty rag and bone shop of the market," to find out-of-favor companies with low price/earnings ratios, those growing faster than seven percent a year, that paid generous dividends. He shows how to distinguish misunderstood and overlooked stocks from those with lackluster prospects. The author was the long-time manager of the Vanguard Windsor Fund and compiled an enviable investment record.
Dow 36,000 by James Glassman and Kevin Hassett: A classic piece from the late 1990s that made the case that stocks, if bought in diversified packages and held over long periods, would have not much more risk than bonds and therefore the price of stocks should rise rapidly to equate the dividend yield on stocks with the return on risk free bonds (which meant that, as of the late 1990s, the Dow should have shot to 36,000). Although it has proved silly, and one of the original authors now opposes his original idea, it has a good parable about how to think about markets, and it is a readable book.
A Random Walk Down Wall Street by Burton Malkiel: The classic piece on how tough it is to beat markets. The author is a professor at Princeton University, and one of the early proponents of the efficient market theory.
One Up on Wall Street by Peter Lynch: One of a number of books by the former outstanding Fidelity Magellan Fund manager. This book was his best and contains basic analysis that is still valid today.
Capital Ideas by Peter Bernstein: One of a number of books by Peter Bernstein, both a Wall Street practitioner and academic writer. This book is about the history of Wall Street investing techniques and how they arose from the ideas of academics.
Black Swan by Nassim Taleb: A popular book about how markets are more volatile than is often assumed by many investment professionals who use standard statistical techniques.
Seeking Wisdom: From Darwin to Munger by Peter Bevelin: A wonderful book on wisdom and decision-making written by a wise decision maker; it is a collection of his simple but big ideas.
Liar’s Poker by Michael Lewis: A first-hand description of life on the trading floor of a big investment bank in the go-go 1980’s. It teaches useful lessons about what the securities salesman on the other end of the phone really means.
The Big Short by Michael Lewis: One of the best analyses of the 2008 financial meltdown told through the stories of several investors who profited from it. Like Liar’s Poker, it makes the case for a healthy skepticism of Wall Street.