This is not actually a list of books to read..but a sequel to a story I had done long back on books to read…

If I remember right, my original list may not included Fooled by Randomness, Black Swan, or The Bed of Procruses – all are Taleb’s books. If you are not too keen on making a career in risk (yet to meet really smart people with a clear understanding of portfolio risk and portfolio insurance, so please do not be upset) please skip black swan. Reading fooled by randomness is fine…

For those people who read a book only once, the original list is fine..I was re-reading 2 classics – 1. a book by Peter Bernstein – Capital Ideas – regarding understanding the mathematical part of risk, and tracing some of the origins and 2. Innumeracy by John Allen Paulos.

Of course if you do read Peter Bernstein there is a logical, alas almost fatal attraction to some of the others like Paul Sameulson (I still wonder what is the relationship between Economics and Equity prices, but that is the limitation of my intellect, not Prof. Sameulson’s fault). Also takes you to the history of Dow, Barrons, and the origin of the Dow Jones Industrial Index – still attractive because it is simple to calculate. Does not matter that it is not representative of the US economy :-).

Of course with due respect to all other readers I hope Prof. Pattu reads this post and one paper of interest for him has to be Louis Bachelier – who had a 70 page essay on why ‘market prices cannot be predicted’ – this is a year 1900 paper, and still has some statements which ring true. It has a lot of math, but still very relevant.

His one line conclusion saying “the probability of price rise is equal to the probability of price fall’ is perhaps the beginning of the MPT (Modern Portfolio Theory). He felt that all the players think ‘the current market price’ is the best price for the share – otherwise the price would have changed.

Now take the price of real estate – do we not see such a trend?

Well about real estate …it will be a different post !!

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  1. Two most interesting and informative book on recent financial crisis -‘The Big Short’ by Michael Lewis and ‘The Greatest Trade Ever’ by Gregory Zuckerman.

  2. Just finished The Big Short (finally) and am coming around to Subra’s opinion on Michael Lewis- great author but good in small doses. Liars Poker is of course a great first book. Wish there were books like The Undercover Economist in the 80s – would not have fled Economics as a subject!For public policy and admin Lee Kuan Yew’s From Third World to First is still the best I have read.Eternally grateful for introducing Taleb.

  3. I introduced Taleb to many people – and most are happy with the intro. He is in a diff category. If markets interest you Bernstein’s Against the Gods and Capital Ideas – both are super books. Most of these books I can re read and re re read as many times as possible. Actually when I read them, I feel ashamed calling myself a writer. I hush it up 🙂

  4. Getting back to the habit of reading books has admittedly been my greatest gain since i have started taking interest in the topic of investing and personal finance about a year back.

    Of the few books which i have read in the last year like Intelligent Investor, Poor Charlies Almanack, Tipping Point, Predictably irrational, One Up on Wall Street, Invest The Happionaire Way, Cash the Crash, few annual letter’s of berkshire hathway and few more books…

    I like the ‘Poor Charlie’s Almanack’ the most. It’s very common sensical yet very profound. At the end of the book the author has also suggested a list of books to read.. around 10-20 of them. So, my to read list has only been growing in the past year and am very eager to read each one of them. Have read about taleb but yet to read any of his books. Will get to one soon.

    Regards
    Raja

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