Twelve Books Everyone in Finance Will Be Talking About in 2017
The last thing anyone needs right now is another “Holiday Book Round-Up for the Investor in Your Life” list. Tadas over at Abnormal Returns has already (per usual) done a fine job compiling all of the major year-end best-of book lists. 2016 brought us some awesome new additions to the libraries of investing and business book junkies. Next year will be no different with what appear to be some early contenders for instant classic status.
I spent some time combing through the “Coming Soon” section on Amazon and have put together a list of what I think are going to be the twelve most buzz-worthy books in finance circles to be released over the next twelve months.
I am a bit of an Ed Thorp groupie so there was no question in putting his memoir at the top of my wish list. The famed mathematician, gambler and investor became famous for his books Beat the Dealer and Beat the Market. Ed Thorp is a revered figure to fans of quantitative and probabilistic investment strategies and the profiles of him in such books as The Quants, Fortune’s Formula, and The Physics of Wall Street were riveting. I can’t wait to hear his story, directly from the horse’s mouth. Added bonus: Nassim Taleb wrote the foreward!
2. Narrative and Numbers: the Value of Stories in Business by Aswath Damodaran
If there is one thing 2016 taught us it’s that we live at the intersection of facts and feelings and when push comes to shove, it’s usually the latter that wins out. Aswath is a finance professor at NYU’s Stern School of Business and is one of the foremost authorities on the subject of valuation. From the book description:
“In business, there are the storytellers who spin compelling narratives and the number-crunchers who construct meaningful models and accounts. Both are essential to success, but only by combining the two, Damodaran argues, can a business deliver and sustain value.”
3. Rational Investing: the Subtleties of Asset Management by Hughes Langlois and Jacques Lussier
Jacques is also the author of a wonderful book called Successful Investing is a Process, a tour-de-force through the world of evidence-based investing. While it is a great read, it is definitely tailored to more advanced professionals. If the description of Rational Investing is any indicator, I imagine that a lot of the same concepts related to risk factors, portfolio construction and skill vs. luck will be presented, but in a much more approachable format.
4. The Fama Portfolio: Selected Papers of Eugene Fama edited by John Cochrane & Toby Moskowitz
Whether you are a disciple of the Efficient Markets Hypothesis or a staunch opponent of it, there is no denying that few people in academia have influenced the world of finance more than Gene Fama. This book, celebrating the Father of Finance and Nobel laureate’s fifty years at the University of Chicago, is a compilation of his most central papers. While the academic literature may be dry to some, the added commentary from his colleagues and peers such as Ken French, Cliff Asness, Toby Moskowitz and John Cochrane may make this worth the hefty price tag.
5. Finance for Normal People: How Investors and Markets Behave by Meir Statman
One of the first investing books I ever read when I was new to the business was Meir Statman’s What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions. Meir is a pioneer in the field of behavioral finance and this book should be a valuable resource for all investors looking to confront their emotional and cognitive biases head on.
Billionaire Steven Cohen is one of the most notorious and successful traders in the history of Wall Street. Black Edge is the story of the rise and fall of his hedge fund empire, SAC Capital.
I really enjoyed Brad Stone’s The Everything Store, which chronicled Jeff Bezos and the rise of Amazon. In The Upstarts, we will get a behind the scenes glimpse at Uber, Airbnb and other Silicon Valley darlings that have taken the sharing economy by storm. With IPO’s seemingly around for these privately held companies, it is only a matter of time before some of these names become common holdings in mutual funds and ETFs. Reading about their journeys from start-ups to tech giants should be fascinating.
8. The Land of Enterprise: A Business History of the United States by Benjamin Waterhouse
The description says it all:
“A new, gripping history of America—told through the executives, bankers, farmers, and politicians who paved the way from colonial times to the present—reveals that this country was founded as much on the search for wealth and prosperity as the desire for freedom”
9. Crude Volatility: The History and the Future of Boom-Bust Oil Prices by Robert McNally
Crude oil prices have been a roller-coaster ride over the last few years. Volatility is par for the course when it comes to black gold. This book aims to deliver a thorough historical perspective on the subject for anyone interested in the movement of oil prices and its impact on geopolitics and the global economy.
10. The Wisdom of Finance: Discovering Humanity in the World of Risk and Return by Mihir Desai
Written by Harvard professor Mihir Desai, The Wisdom of Finance looks to unexpected places – cinema, literature, history – to provide a unique perspective on an often dry subject.
11. Why Wall Street Matters by William Cohan
Nowadays, Wall Street doesn’t have many friends on Main Street – and in many cases for good reason. William Cohan, a former investment banker and now a respected financial journalist, was a Wall Street critic for many years. But now he thinks the pendulum has swing too far and has come to the defense of an industry that has seemingly been cast as a villain to the average person. I look forward to his take on all of the good things that financial institutions do that impact our day-to-day lives.
12. The Activist Director: Lessons from the Boardroom and the Future of the Corporation by Ira Millstein
We must be in the golden age of activist investing books. Last year brought us the delightful Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism and 2014 gave us Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations. With Jack Bogle, Michael Bloomberg and Sandy Weill all providing blurbs for the back cover, I have a feeling we’re in for a treat.
Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing by Joel Tillinghast
Hit Makers: The Science of Popularity in an Age of Distraction by Derek Thompson
Valley of the Gods: A Silicon Valley Story by Alexandra Wolfe
High Returns from Low Risk: A Remarkable Stock Market Paradox by Pim van Vliet
Pitch the Perfect Investment: The Essential Guide to Winning on Wall Street by Paul Sonkin & Paul Johnson
With all of these great new books on the way, wouldn’t it be nice to have a few more hours each day to get through all of them? We can’t create more time, but we could all use a few tips on how to become more productive and efficient readers. Luckily, Patrick O’Shaughnessy of O’Shaughnessy Asset Management has you covered with this great blog post/tweetstorm. No one I know is more qualified to dole out reading advice than Patrick, who reads over a hundred books a year and has become an industry go-to for thoughtful recommendations from all genres.
A truly memorable and thought-provoking book is a gift that keeps on giving. Hopefully this preview has provided you with a head start on next year’s holiday shopping season for your favorite finance geeks!
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