Reading List

Charles

After The Quants (audiobook), a rave by Scott Patterson, here's my current reading list:

Beat the Dealer, by Ed Thorp
Beat the Market, by Ed Thorp
Hedge Fund Market Wizards, by Jack Schwager (audiobook)
Running Money, by Andy Kessler
Security Analysis, by Ben Graham and David Dodd
What Do I Do with My Money Now? (Collection by notable investors, edited by Clint Willis.) Just finished this one actually, very quick read by diverse bunch. From believers in efficient market theory to the non-believers, timers/non-timers, famous traders, self-effacing billionaires, value versus growth champions. And one very humbling article, called "The Ego Trap."

My next audiobook will be Dark Pools, another by Scott Patterson, recommended by our own scott.

Accipiter

I read the quants a couple of years ago. quite good. If you haven't read any of Michael Lewis's books (Boomerang and Big Short) or Ben Mezreich's books check them out if you are looking for other good reads.

I'm a third of the way thru this one.


THE REVENGE OF GEOGRAPHY:What the Map Tells Us About Coming Conflicts and the Battle
By Robert D. Kaplan


http://www.nytimes.com/2012/10/07/books/review/the-revenge-of-geography-by-robert-d-kaplan.html

so -so. Not sure if I'd recommend it, plenty of other great books to read.
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THE WRECKING CREW:The Inside Story of Rock and Roll’s Best-Kept Secret/ By Kent Hartman

http://www.nytimes.com/2012/02/20/books/the-wrecking-crew-by-kent-hartman-on-60s-studio-musicians.html

pretty good, so far 1/3 of the way into it. entertaining.

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Ghosts of Empire: Britain’s Legacies in the Modern World by Kwasi Kwarteng
http://www.nytimes.com/2012/03/04/books/review/ghosts-of-empire-by-kwasi-kwarteng.html

after I finish the other two listed here.
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Charles

Cool. Thanks Accipiter for sharing.

chip

If anyone else has anything to add, I'll be happy to put them on the Book Page at http://www.mutualfundobserver.com/resources/books/

Currently, I'm deeply involved in Management of Marketing by Geoff Lancaster and Paul Reynolds, as well as Online Marketing Heroes: Interviews with 25 Successful Online Marketing Gurus by Michael Miller, and several other marketing page-turners. It's all part of my e-Business class.

catch22

Hi chip,

Okay, perhaps a strange question; but do you find any relationship to your current work in I.T. and all that is needed in this area of understanding and knowledge, that could translate into a better understanding or feel for investing.
I am always curious as to apptitudes and inclinations for one's work; and whether particular career areas may lend themselves to a bit more of an intuitive nature towards investments.

If I am too personal with this question..............sincerely tell me to "buzz off".

Take care,
Catch

VintageFreak

I am a big audiobook fan. My last one - Griftopia.

chip

Hi, Catch.

It's not at all too personal, and it's an interesting question. I guess that there are certain logical thought processes that I.T. folks follow that might help a bit with investing, but it's certainly not anything magical or even what I would consider intuitive. I could see that we might have a bit of an easier time learning some of the concepts and recognizing patterns in investing and behavior. Really though, I wouldn't think of it being different than anyone working in a field that necessitates a strong math background.

Best,
chip

Accipiter

not an investing book.

An excellent satire though
‘They Eat Puppies, Don’t They?,’ by Christopher Buckley

http://www.nytimes.com/2012/05/13/books/review/they-eat-puppies-dont-they-by-christopher-buckley.html

Flack

Charles,
The Thorp book will show you how to count cards.
Blackjack Secrets by Stanford Wong will show you how to PLAY to win.

Flack (once a full-time blackjack player)

Charles

Cool.

I got interested in Ed Thorp because of Scott Patterson's portrail of him in The Quants. He is also interviewed, profoundly and at length, by Jack Schwager in Hedge Fund Market Wizards. Amazing man.

He once exploited the odds at Blackjack, but later he moved on to exploit the odds at the biggest casino in the world...Wall Street.

I personally have never been much of a card player. My poker friends in our "Stochastic Club" started inviting me I think because I'm most likely to lose, but I enjoy the attendant wine, food, and most of all, comradery. (Perfect scam!)

I will give Blackjack Secrets a try after finishing Thorp's Beat the Dealer (and Beat the Market). Hey, maybe it will change my luck.

Thanks for sharing Flack.

Charles

Enjoyed recently The Little Book That Still Beats the Market, by Joel Greenblatt, founder and managing partner at Gotham Capital and adjunct professor at the Columbia University Graduate School of Business.

Quick read (listen). Easy to understand, so especially good for me. Basically, a two-component value system for picking above-average companies at below-average prices resulting in a 20-30 stock portfolio that over longer term (5 or so years) will beat the market. Again, made good sense to me. That said: about 1 in 10 blasted the book on Amazon.

I think Mr. Greenblatt is pretty amazing man, because of his investing record, his articulation of the value approach, and his charity/volunteer work in elementary education.

Charles

Took a while but just finished Dark Pools, by Scott Patterson. Not a great read, like his earlier book The Quants. But nonetheless, enjoyed learning about the plumbing behind the markets, Josh Levine, Island and Datek, high speed trading, front-running, trading rules, maker-taker kickbacks, algo wars, exchanges, etc. Thanks Scott!

And, finished Reminiscences of a Stock Operator, by Edwin Lefèvre, which apparently is a fictionalized account of Jesse Livermore, first published in 1923. Had to read it after being mentioned several times in Jack Schwager's Hedge Fund Market Wizards. Mr. Schwager actually provides the forward. Not a day goes by that I do not think of a line from this book, usually in the context my own ill-timed actions, or better and wiser inaction.

Mentioned previously, but also finished an old text I'd carried around for years and just got to: The Dow Jones-Irwin Guide To Common Stocks, by Chris Mader and Robert Hagin. Written 1976, but still relevant today...came out about the time Professor Fama's work was becoming recognized. That said, I'll reiterate some key takeaways:

...you must avoid downside losses and be in the right instrument at the right time.

...you must move out of bad investments before losses become serious.

...monitor performance relative to your expectations and cut off significant losses.

Just started When Genius Failed: The Rise and Fall of Long-Term Capital Management, by Roger Lowenstein. Like The Quants, burns from the first bar.

Investor

Reply to @Charles:

...you must avoid downside losses and be in the right instrument at the right time.

...you must move out of bad investments before losses become serious.

...monitor performance relative to your expectations and cut off significant losses.

Yeah, it makes good advice on surface. It leaves important details out however. You need to be market timer but they will not tell you that important little detail that getting the timing right is the difficult part. Some of these offer backtested strategies that appear to work until everyone tries the same and it stops working.

Many have tried and lagged reasonably diversified buy, hold rebalance strategy. In their quest to be a superior investor they lose to average joe investor with a passive portfolio. It is not about smarts either. I am sure Hussman has above average IQ but his performance leaves a lot to be desired. He has constructed a large number of charts, strategies etc. that fits the past data very well but in turn proved not very useful for investment decision making. A know nothing investor in a balanced portfolio has done much much better. Being fancy often do not get rewarded.

scott

I'll throw in the book from Google's Eric Schmidt and Jared Cohen, "The New Digital Age", about their views regarding how tech will evolve and influence daily life in the coming years. Not a book without a few issues, but an enjoyable read so far that provides a good view of pros and cons, not just "Tech Will Make Everything Super Wonderful" (although there are definite pros in their views.)

It makes me want to add to what tech/media/mobile positions I have.