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Gift Ideas for The Value Investor...straight from the shelves of The Turnaround Letter
- In an era of short attention spans, 280-character tweets and investing fads like bitcoin, a top-quality book (made from actual paper) can make a wonderful and enjoyable gift.
- This list of high-quality reads includes great ideas for any investor.
- Most are considered classics, some written decades ago and others more recently.
- Nearly all of these titles have been read (at least once, many with margin notes) by the editors and staff of The Turnaround Letter.
Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism by Jeff Gramm: Published in 2016, this engaging text recounts several of the more colorful shareholder efforts to change bad management practices. Each chapter is based on an actual 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: One of the most influential books on investing andriginally published in 1934, it describes the timeless value investing concepts and methods of Benjamin Graham: the “father of value investing.” This read is considered the foundation for Warren Buffett’s success and recent editions include commentary by some of today’s most successful investors.
The Intelligent Investor by Benjamin Graham: The sub-title says it all: “the definitive book on value investing.” Graham’s classic best seller, this text describes the principles of value investing and applies them to selecting securities. It also discusses the concepts of thinking as an owner of a business and the “margin of safety.” This is considered by Warren Buffett to be one of the most important reads in all of investing.
Extraordinary Popular Delusions by Charles MacKay: This classic book on investing, market psychology and gullibility is just as relevant in today’s bitcoin world as it was in 1841 when it was first published. Scottish journalist Mackay tells the stories of many of history’s notable bubbles and investment frauds and illuminates how human nature and its inherent weaknesses never really change.
Fooled by Randomness by Nassim Nicholas Taleb: The author, once considered an investment heretic but now thought of as a genius and the essence of mainstream, uses stories and anecdotes to illustrate how the world is much more random than we believe. He describes how human nature leads us to over-estimate causality, which is often followed by our mistakes. This book opens the reader’s mind to a view of the world that is frequently hidden.
The Most Important Thing by Howard Marks: Warren Buffett’s quote on the title, “This is that rarity, a useful book” conveys the merits of this highly-readable and brief (180 pages) 2011 book on thoughtful investing. Marks discusses how to define, recognize and control risk, and comments on contrarianism, finding bargains and “knowing what you don’t know.” Marks co-founded and runs Oaktree Capital Management and is widely considered one of the today’s icons of value investing.
Against the Gods by Peter L. Bernstein: Peter Bernstein was one of the most insightful writers of our time. His book provides 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 theory. Barron’s describes the book as “an extremely readable history of risk.…”
The Aggressive Conservative Investor by Martin J. Whitman: Whitman’s classic book draws from his very successful experience as a deep value investor. This text discusses his perspective on being a minority shareholder, how to gauge risk and how to apply his four essential characteristics necessary for investing in a company—all built upon solid business and investing fundamentals that he describes in detail.
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. The book is both entertaining and enlightening about the need for a healthy skepticism of Wall Street. The movie by the same title is also well-worth the 130 minutes and stars Ryan Gosling, Steve Carell and Christian Bale with appearances by Brad Pitt.
Reminiscences of a Stock Operator by Edwin Lefevre: Long believed to be written by the legendary speculator Jesse Livermore in 1923, this book is the story of how speculators manipulated and profited from the stock market in its earlier days. Many of the principles Lefevre uses to pick stocks still echo today in the short-term mindset of Wall Street.
Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed: This text tells the story of how four central bankers once dominated the world of finance in the early 1900’s. Not only does Ahamed provide fascinating insight into their personalities, he also illustrates how these men were all too human, using tools and methods they believed were effective yet they were unable to prevent the financial crises that plausibly led to World War II. Highly readable, the book is relevant in our own time as central bankers continue their experiment with global monetary policy.
Principles: Life and Work by Ray Dalio: Dalio is the founder and co-chairman of Bridgewater Associates, the largest hedge fund in the world. His firm has been described as cult-like, so this new (2017) book provides some insights into his very unique and complicated approach to running a giant hedge fund and managing his life. Among its voluminous 569+ pages are probably some nuggets to help every investor.