LAST WEEK, we talked about finance books. I heard from a number of you suggesting additional books that you found helpful enough to recommend to others.
JF, a California reader, likes three of Ben Stein’s books because they are “short, entertaining and very informative.” First is “The Capitalist Code: It Can Save Your Life (And Make You Very Rich),” which J.F. gives to 20-somethings, the book’s target audience. J.F. adds, however, that anybody of any age will enjoy the book.
Legendary investor Warren Buffett agrees: “My friend, Ben Stein, has written a short book that tells you everything you need to know about investing (and in words you can understand).”
JF’s second choice is “How to Really Ruin your Financial Life and Portfolio,” which also received Buffett’s endorsement: “A wise man once said, ‘All I want to know is where I’m going to die so I’ll never go there.’ Ben Stein has applied this instruction to the investment world with his special brand of humor and insights. Pay attention!”
JF’S third recommendation is “The Little Book of Bulletproof Investing: Do’s and Don’ts to Protect Your Financial Life.” JF mentioned that he reads “all” of Stein’s books and articles, and views Stein as his “unofficial ‘financial adviser.’” Now that’s a real compliment.
Two readers recommended “Where Are the Customers’ Yachts? Or A Good Hard Look at Wall Street” by Fred Schwed Jr., which was written in the 1920s and rereleased in 2006. Schwed was a stockbroker who lost “a bundle” in the stock market crash of 1929, according to the book jacket.
To give you a sense of Schwed’s point of view, consider this: He starts the book with “Wall Street ... is a street with a river at one end and a graveyard at the other. This is striking but incomplete. It omits the kindergarten in the middle.”
Even Michael Lewis, author of “Liar’s Poker,” found this book compelling: “Once I picked it up I did not put it down until I finished ... what Schwed has done is capture fully — in deceptively clean language — the lunacy at the heart of the investment business.”
If you are wondering about the title, John Rothchild, author of “A Fool and His Money,” tells this story: “The title refers to a visitor to New York who admired the yachts of the bankers and brokers. Naively, he asked where all the customers’ yachts were? Of course, none of the customers could afford yachts, even though they dutifully followed the advice of their bankers and brokers.”
CW (no state) recommended the following books as being easy reads that offer excellent advice:
“A Random Walk Down Wall Street” by Burton G. Malkiel.
“The Richest Man in Babylon” by George Clason.
“Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets” by Nassim Nicholas Taleb.
As long as we’re talking about authors of days gone by, there is no better book to read about the stock market of the Roaring ‘20s than “Reminiscences of a Stock Operator” by Edwin Lefevre.
That book takes you through “A time when the Dow was about to soar from 90 in 1923 to a high of 381 in 1929. A time when a great journalist (Lefevre) combined forces with a great trader (Jesse Livermore) to explain to the masses how to make a fortune in the great game, and, above all else, not to be a sucker.”
If you buy this book, I recommend the 2009 version annotated by Jon Markman, since it brings the 1920s into a meaningful perspective. For example, “sugar was the basis for an exciting stock that traded with great volatility ... it was one of the most important crops in the development of industry and world trade in the 17th through the 20th centuries.”
Before leaving the subject, you should know that Paul Tudor Jones, chairman of Tudor Investment Corp., noted in the foreword that “Reminiscences” was given to him by his first boss as the most important book he could read. Why? He is “always looking for the next Jesse Livermore.”