8 smart books for investors
It’s great to keep abreast of relevant reading on any topic, but it’s particularly difficult to find worthwhile books on investing. You want to find something that is thoughtful and breaks new ground, but doesn’t end up touting the latest investing fad. For 2015, my colleagues and I – and some of our sharp interns who run a book club here at Russell Investments – offer the following recommendations.
Expected Returns: An Investor’s Guide to Harvesting Market Rewards by Antti Ilmanen. A dense book, but worth the time and effort. Ilmanen does an excellent job of explaining market opportunities where investors may exceed standard benchmarks. If you’re interested in an active approach to investment management, this book is for you.
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, by Burton G. Malkiel. First published in 1973, Malkiel’s book remains one of the classics on investing. His no-nonsense, gimmick-free advice will give any investor – whether a rookie or a veteran – a fresh perspective on how to succeed.
Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies, by Jeremy Siegel. This fifth edition of a modern classic looks back at the financial shock of 2008, the rise of China, the global economy, and explores ways to profit from it all.
Dispatches from the Investing Front
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, by Nassim Taleb. Taleb is perhaps better known for writing “The Black Swan,” but this is a lighter read that still covers some of the same themes. Taleb examines opacity, luck, uncertainty, probability, human error, risk, and decision-making in a world that’s difficult if not impossible to understand.
When Genius Failed: The Rise and Fall of Long-Term Capital Management, by Roger Lowenstein. The collapse of Long-Term Capital Management (LTCM) in the late 1990s prefigured the fall of Lehman Brothers and others in 2008. In this book, Lowenstein shows how even the smartest people – LTCM was run by a team of brilliant academics – can make terrible investing decisions.
The Snowball: Warren Buffett and the Business of Life, by Alice Schroeder. Buffett has never written a memoir, but he gave writer Schroeder extensive access to his life and papers. Anyone interested in how the “Oracle of Omaha” got to where he is financially will find this book fascinating.
Our interns weigh in
The Signal and the Noise: Why So Many Predictions Fail – but Some Don’t, by Nate Silver. Silver – who built a reputation forecasting baseball and parlayed that into dead-on predictions of the 2008 and 2012 presidential elections – writes about how to make sense of all the noise in today’s world and investing climate.
Thinking Fast and Slow, by Daniel Kahneman. Kahneman a psychologist and Nobel prize-winner, examines recent research on intuition and systematic thinking. He writes that thinking fast and intuitively is “lazy” – not to mention usually wrong – and that we’d be better served to think more slowly and deeply, regardless of the decision we’re considering.
Successful investing relies on sound knowledge of our markets and the forces that influence them. If you agree, consider adding these suggestions to your 2015 reading list.