Invstment Professional's "must read" list of books from FT

Festive reading
Posted by Neil Hume FT Alphaville

Looking for something to read over Christmas? Or perhaps you are struggling to find a pressie for the banker in your life?

Well, FT Alphaville can help — with a little assistance from SocGen strategist Dylan Grice.

In his latest Popular Delusions notes he has drawn up a list of six books that every investment professional (including his colleague Albert Edwards) must own.

In the short time I’ve been doing this job, a recurring conversation I have had with clients has been about my favourite books. One client asked me what books we would recommend to a university graduate coming into the industry. Albert has passed on this onerous task, claiming he only reads “chick lit”; but since James Montier made book lists a bit of a SocGen tradition I’ve come up with the six broadly financial titles which fundamentally changed the way I view the world.
It’s very difficult to come up with a list of favourite investment books that doesn’t change each time I think about it. But the ones which have, I think, made the biggest impression on me are as follows:
1. Manias, Panics and Crashes, by Charles P. Kindleberger;


2. The Essays of Warren Buffett, edited by Richard Cunningham;


3. Reminiscences of a Stock Operator, by Edwin Lefevre;


4. Fooled by Randomness, by Nassim Taleb;


5. The Case against the Fed, by Murray Rothbard;


6. Judgement under Uncertainty: Heuristics and Biases, eds Kahneman, Slovic and Tversky.


Grice says the theme running through all of the books is that people are flawed in their ability to think rationally:

‘Heuristics and Biases’ proves, for example, that our preferences change when the context in which they arise changes, that we see patterns in random data; that we are even more prone to see patterns in random data when in possession of a theory predicting such patterns; that we overweight outcomes we can imagine easily; that even though we prefer more information to less we are hopeless at processing it; that we are hopeless at gauging correlations until they are very obvious. It proves, in other words, that we are flawed as rational thinkers, which is why the above authors are right.
And here’s what Grice will be reading on his skiing holiday this Christmas.

7. ‘The Panic of 1819′ by Murray Rothbard
8. ‘Once in a Golconda’ by John Brooks
9. ‘Lords of Finance’ by Liaquat Ahamed
Happy Xmas.

This entry was posted by Neil Hume on Thursday, December 17th, 2009 at 10:47 and is filed under Capital markets, People. Tagged with albert edwards, Christmas, Dylan grice, SocGen.