Investment books: 7 books for highly effective investors
6 minutes reading time
With summer holidays around the corner, what’s on your reading list?
Whether your idea of a summer’s day well spent is reading by the pool or at the beach, or if one of your 2022 resolutions is to become a more effective investor, here are our investment-related reading recommendations for your holiday.
The Elements of Investing: Easy Lessons for Every Investor by Burton Malkiel and Charles Ellis
An essential 101 of index investing written by two of the godfathers of passive investing, and bestselling authors of A Random Walk Down Wall Street, and Winning the Loser’s Game.
This book shares insights that can carry investors all the way to, and through, retirement. It skilfully focuses on the golden rules for investment success.
A true manual of passive investing.
Just one thing by John Mauldin
A collection of investing wisdom delivered by twelve renowned financial experts.
There’s nothing quite like a personal guide who can show investors the most direct route to financial goals. This book conveys the most useful advice garnered from years of investing, in twelve clear and succinct essays.
It has been described as a ‘shortcut to prosperity’.
Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth
Oxford academic Rayworth lays out all the reasons why the economics we learnt at university are an existential threat.
From unforeseen financial crises to extreme wealth inequality and continuous pressure on the environment, she explains how the demands of the 21st century require a new approach to economics.
The Internet of Money by Andreas M Antonopoulos
A renowned text that explores beyond the technical functioning of the bitcoin network and spells out the philosophical, social and historical implications of bitcoin.
Through a collection of essays covering the thrilling maturation of the technology, Andreas explains how Bitcoin is enabling financial independence to billions worldwide and its disruption of all types of industries.
This book is set to open eyes on how decentralised technology may fundamentally change society’s approach to solving social, political, and economic problems.
A Man for All Markets by Edward O. Thorpe
The true story of the infamous card-counting mathematics professor Edward O. Thorpe.
Thorpe tells his story of how he proved the seemingly impossible: beating the dealer at the blackjack table, resulting in a gambling renaissance.
After inventing card counting, he went on to produce the Black-Scholes model for option valuations – before Black-Scholes!
Ultimately, as the first of the many great quantitative investors, it’s said that Thorpe ushered in a revolution on Wall Street. Throughout the book, he also offers practical wisdom to guide investors in uncertain financial waters.
Thinking in Bets by Annie Duke
Lessons from a poker champion and one of Mike Cannon-Brookes’ favourites.
Former World Series of Poker champion turned business consultant, Duke shares her learnings from business, sports, politics, and poker for people to use as tools to make better decisions and embrace uncertainty.
She aims to shift people’s thinking and reliance on certainty in life, hoping that these lessons can help people be less vulnerable to reactive emotions and bad habits in decision-making.
It’s said these learnings can be applied to investing, where there are some elements simply out of investors’ control, such as the social, political and business decisions which can affect investment markets.
Reset: Map to make Australia a renewable energy superpower by Ross Garnaut
Economist Ross Garnaut develops the idea of a renewable superpower and lays out how the pandemic offers Australia the opportunity to reset its economy, why the old approaches won’t work, and fresh, practical ideas to set Australia up for a better future.
Building Wealth in the Stock Market by Colin Nicholson
A straightforward, jargon-free, and systematic approach to investing safely and successfully in the Australian sharemarket by experienced investor and teacher, Colin Nicholson, who shares his own investment plan curated after 40 years of financial markets experience.
Brought to life through case studies, Colin focuses on improving decision-making skills when it comes to investing and explains the fundamentals of creating a successful investment plan or strategy, covering when to buy, when to take profits, how to build a position, and when to cut losses.
A Gift to My Children: A Father’s Lessons for Life and Investing by Jim Rogers
Legendary investor Jim Rogers, who was the co-founder of the Quantum Fund on Wall Street – an operation so successful that he retired at 37 – shares a heartfelt guide for his daughters (and all young investors) to find success and happiness in his or her chosen field in just 85 pages. The book is based on anecdotes and advice derived from his working life, successes, and challenges.
Crashed by Adam Tooze
A masterful account of the Global Financial Crisis and its global aftershocks by Columbia professor, Adam Tooze.
He lays out the depth of disaster by connecting the mortgage crisis to the American banking crisis to the European debt crisis.
He also interweaves the 2014 Ukraine crisis, the fallout of Brexit and the election of Trump in this highly descriptive, yet objective history, offering valuable reading for anyone interested in learning about the history of global politics and the financial system in order to understand the potential for the future.
The Psychology of Money by Morgan Housel
Morgan Housel shares 19 short stories exploring the strange ways people think, behave, and make decisions about money. He focuses on the idea that making clever decisions about personal finance is about behavioural psychology, as opposed to having studied or worked directly in finance.
Morgan also provides great arguments for indexing, buy and hold investing, regular contributions and the importance of asset allocation.
One up on Wall Street by Peter Lynch
The basics of investing in shares, written by one of the most successful investors in the world, Peter Lynch, who ran Fidelity’s Magellan Fund.
When Lynch took over the fund in 1977, Fidelity’s fund had about US$18 million in funds under management. It had grown to be the largest fund in the U.S. at the time with over US$14 billion when he retired in 19901. His return over the 13 years was 29% p.a., or a total return of over 2,700% – $100,000 invested in the fund would have been worth close to $3 million by the time he’d finished working his magic.
Lynch offers investors guidelines such as thinking long-term about the market and investing in what you know, and explains the fundamentals of the PEG ratio, or price/earnings to growth ratio – which he is famous for popularising.
Poor Charlie’s Almanack by Charlie Munger
Everyone has heard of Warren Buffett, probably the world’s most famous investor. But, while not as well known, Charles Thomas Munger has been his right hand man since 1978 as vice chairman of Berkshire Hathaway, and is described by Buffett as his ‘partner’.
Known for his multidisciplinary mind, Munger trained as a meteorologist during World War II and studied law at Harvard before entering the finance world.
Through his collection of thoughts, speeches and essays, Munger imparts wisdom by drawing on an array of disciplines including economics, psychology, physics, biology, and history, among others. The book has been described as a manual both of investing and also of life itself.
The Australian ETF Guide by David Bassanese
Written by our own Chief Economist, one of Australia’s leading investment analysts and former Australian Financial Review columnist, David Bassanese, this is the definitive book on the Australian ETF Market.
In his practical, easy-to-read guide, David outlines the range of funds available, how they can be used for either trading or building a diversified long-term investment portfolio, and offers tips on how to incorporate ETFs into your investment strategy.
1. 1. Fidelity Viewpoints. “Peter Lynch: Secrets to Success | Investing Lessons | Fidelity.” Fidelity, Fidelity Viewpoints, 18 Sep 2019, www.fidelity.com/viewpoints/investing-ideas/peter-lynch-investment-strategy