Unforgettable Business Classics of the 20th Century
A selection by our reviewer Gregory Bresiger
You may have read it a long time ago and forgot it. Or, somehow in the crush of work and other responsibilities, you always have been meaning to read it, but never have. Herewith is a list of business and investment classics that no intelligent mind and no well-stocked library should be without.
Since this is a small column, I do not pretend to present a comprehensive list. This is merely a short list of books written in the last century, but designed to be read by intelligent people, interested in investing, in every century. Some of these, unfortunately, may be out of print. However, they will likely be available in almost any large library with a good business or economics section.
The Intelligent Investor
by Benjamin Graham
Has value investing gone out of style? Don't worry it will come back. And then this little 1949 tome-written in a clear, simple, unthreatening style–will be back in vogue. Graham goes through the steps of how one separates the junky companies from the pretty good companies and then finds the superior ones. A few extraordinary ones are all that Graham wants, which is why Graham and his most famous student, Warren Buffett, became some of the most successful investors ever.
Common Stocks and
Uncommon Profits
by Philip Fisher
This book, as well as Graham's book, had a tremendous influence on Buffett. With Fisher, the emphasis was on quality, not quantity. He argues that a highly focused portfolio — one that was non diversified–was the way to succeed. "Great stocks," Fisher said, "are extremely hard to find. If they weren't, then everyone would own them." When an adviser finds these gems, Fisher said, the adviser should load up.
The Art of Speculation
by Philip L. Carret
Carret founded the Fidelity Investment Trust with $25,000 of his own money in the 1920s. He would see his original investment grow to $2 billion in assets as it mutated into Pioneer Fund. Besides managing a fund, he was a bond salesman and a financial journalist. Born in 1896, Carret was an intensely curious and bright man with many interests. He made it to 100 and saw it all. Here, in a slender, well-written book, is the wisdom of his many years. How to understand bear and bull markets, how to trade in unlisted securities, how to read a balance statement are just some of the subjects that Carret treats in a fascinating manner.
A Random Walk Down Wall Street
by Burton Malkiel
The fancy theories of active management come and go, but the market – in its cumulative wisdom – is smarter. Here is one of the bulwarks in the case for passive management and for index funds. Malkiel, in this fascinating book that was updated in a 1995 edition, shows how relying on past performance for selecting the correct investment is usually a bad decision. Better to stay fully invested across several different lines than to try to pick the next hot manager, stock or category of investing. Finally, Malkiel reminds the reader of something that should be remembered, not just in investing, but also in every aspect of life: The experts are often wrong.
"It was the steady investors who kept their heads when the stock market tanked in October 1987, and then saw the value of their holdings eventually recover and continue to produce attractive returns. And many of the pros lost their shirts during the mid-1990s using derivative strategies they failed to understand," the author writes. As one sage says of the football picking experts – in an assessment that could also apply to the experts of the investing world: "Listen to who they are picking, then go the other way."
Bogle on Mutual Funds. New Perspectives for the Intelligent Investor
by John Bogle
He knows where the bodies are buried. Where the gimmicks are tried. Where are the worst excesses of the fat and sassy fund industry? Many of the unpleasant truths of the investment company business are here. And there are many in the business who would prefer that you – as well as your customers – not read and re-read this book and ask so many unpleasant questions (Why is the expense ratio of my fund so high? Why do funds so infrequently beat indexes? Why must we suffer through 12b 1 fees? Why do fund companies, in their ads, pick such odd reporting periods?). This book is well worth your time because Bogle so entertainingly throws spit balls at the industry that has fed him.
The Millionaire Next Store. The Surprising Secrets of America's Wealthy
by Thomas J. Stanley and
William D. Danko
A new classic, which could be retitled: "Wealth is not where you think it is." A book that tells us where and how the new wealth in America is generated. Stanley, who runs an Atlanta-based institute that studies affluence, comes up with some very interesting answers. The conclusions of this book are as surprising as they are interesting. More importantly, this well documented book will be used for many years. It will be instrumental for those who expect to sell to the well heeled.
The Money Masters; Nine Great Investors: Their Winning Strategies and How You Can Apply Them
by John Train
How did the best come to be the best? Where did they come from? How did they start? This is a kind of "Plutarch's Lives" of modern investment masters. These mini-biographies are fascinating because the author is an investment counselor who has selected excellent representatives of various styles: John Templeton, T. Rowe Price, Paul Cabot, Warren Buffett, Benjamin Graham and Larry Tisch. If one doesn't have the time or the inclination to go through the books on each of these giants, then here is a shortcut that won't make the reader feel guilty and will probably lead the reader to go on to more challenging texts.
Stocks for the Long Run: A Guide to Selecting Markets for Long-Term Growth
by Jeremy J. Siegel
An essential book for advisers because it gives them the long-term perspective required for intelligent thinking. What can one expect from equities? How have they performed in tough and good periods? What are their strong and weak points? It's all here. And, more importantly, the reader can be reminded of how equities perform in disappointing times. This caveat is more important than ever at a time when few advisers and investors, until recently, had any institutional memory of a time when equities were not the investment of choice; when they were, in fact, hated and reviled, thought by most investment players to be the worst option around.
A last word: Why read any or all of these books? Ultimately, the reason to read is a selfish one: You enrich yourself and make yourself a better trader, adviser or broker. It is a kind of investment education, but it is also a fascinating, enjoyable experience.
