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10 Finance Books All Investors Should Read

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Here's a list of books that address critical aspects of the marketplace.

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The Black Swan of Cairo by Nassim Taleb

Taleb has written many things that I would put on this list, but the best starting point for anyone unfamiliar with his writings is a short essay he wrote for the Council on Foreign Relations, titled The Black Swan of Cairo. Taleb examines and identifies the Arab Spring as a Black Swan event, and explains how trying to suppress volatility and uncertainty in society gives rise to these events. This paper has shaped my views on the crisis in Europe; the system is clearly not sustainable in its current form and the efforts of the ECB and European parliament to smooth things out, largely driven by the mentality that an exit from the euro by any country is unacceptable, mirrors the efforts of the middle eastern governments in their bid to suppress youth movements and change. This is a must-read for anyone and is available for free on Taleb's website (direct link here).

Santayana's Curse by Sean Corrigan

Sean Corrigan, of Diapason Commodities, explores our species' (pun intended) various attempts at using currencies of different forms, bubbles, low interest rates, and more. Although this book is not widely known or mentioned, it should be. One quote from the book reads, "Those who know no financial history are also doomed to repeat their mistakes." Needless to say, with central banks around the world in high gear, Santayana's Curse has a sense of prescience of how the global stimulation war might end.

The Signal and the Noise: Why So Many Predictions Fail -- But Some Don't by Nate Silver

The idea of information being either noise or signal is a favorite of mine. Silver examines what traits some of the world's best forecasters have in common. Two of the major traits are an above average understanding of statistics and probability, and an acceptance of the possibility of being wrong (which an understanding of probability is a prerequisite for). This is a must-read for any investor, trader or businessperson.

The Lessons of History by Will and Ariel Durant

Described by many as a "survey of the human experience," The Lessons of History frames our species' history (in a very concise 102 pages) in the context of several different topics including:
  • The Earth
  • Biology
  • Race
  • Character
  • Morals
  • Religion
  • Economics
  • Socialism
  • War
  • Growth and Decay
The summation of these topics leads to the question, is progress real? Several different definitions of progress are explored and are followed by several different answers. One such answer suggests that all technological advances are simply new means of achieving old ends.

The Five Dysfunctions of a Team: A Leadership Fable by Patrick Lencioni

Throughout the earlier part of my university career, I had the displeasure of working with many dysfunctional groups. Fortunately, group projects became enjoyable and productive towards the back end of my time in school. For one project in particular, I was lucky enough to work with two phenomenal people (and an equally phenomenal coach) in a business case competition that set the bar for the type of people I'd like to work with for the rest of my life.

Thousands of books about teamwork have been written, and I could sum them all up concisely as 'instruction manuals'. They all approach successful teamwork from a "make sure you do this" approach. The Five Dysfunctions of a Team takes a negative approach and examines the commonalities of teams that don't succeed and boils it down to five things that inhibit a group of otherwise capable people from achieving something bigger than they could on their own. The five dysfunctions are:
  • Absence of trust
  • Fear of conflict
  • Inattention to results
  • Lack of commitment
  • Avoidance of accountability
Again, this book is not directly related to finance, but I think you will find some strong themes that relate to successful trading desks, research/banking teams, and pretty much any successful business.

I hope you find some good value in my top 10 finance books and essays. Feel free share your comments and favorites below. Thanks for reading.

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No positions in stocks mentioned.
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