In the world of investing, possessing the right knowledge can distinguish success from failure. Interviews with seasoned investors often unveil a wealth of insights, particularly through the books they hold in high regard. By examining their reading lists, aspiring investors can uncover perspectives that may shape their investment strategies.
Recently, I contacted a range of successful investors to gather their top book recommendations for those seeking to hone their investing skills. The responses were enlightening and varied, providing a rich tapestry of wisdom.
Books that build foundational knowledge
One prominent figure in the investment community, David Abrams, founder of Abrams Capital, underscores the necessity of understanding numbers. He strongly recommends Innumeracy by John Allen Paulos. Abrams asserts that a fundamental grasp of numbers is essential for anyone aiming to navigate the financial landscape effectively. He states, “If you lack this fluency, your progress in finance will be severely hindered.” This book serves as a primer, offering readers a solid entry point into the world of numerical literacy.
Additionally, Abrams highlights Black Box Thinking by Matthew Syed. This book draws a parallel between the airline industry, which learns from its mistakes, and other fields that often do not. Syed’s work encourages readers to acknowledge hidden data and learn from failures, a crucial mindset for continuous improvement in investing.
Understanding human behavior and forecasting
Another expert, William Bernstein, co-founder of Efficient Frontier Advisors, suggests two enlightening reads. The first, The Secret of Our Success by Joe Henrich, explores human behavior and societal structures. Bernstein believes that understanding these aspects can significantly enhance one’s investment judgment.
His second recommendation, Expert Political Judgment by Philip Tetlock, delves into the art of forecasting. Bernstein points out that most forecasters struggle to deliver accurate predictions, highlighting the complexity of making well-informed investment decisions.
Learning from the legends
When it comes to legendary insights, Tobias Carlisle, founder of Acquirers Funds, emphasizes the importance of reading Warren Buffett’s Letters to Shareholders. He describes these letters as a free MBA, filled with practical wisdom. Carlisle humorously critiques traditional MBA teachings, stating that Buffett’s insights guided him on the right path long before he entered the business world.
Ric Dillon, founder of Vela Investment Management, echoes this sentiment but with a specific twist. He recommends The Essays of Warren Buffett: Lessons for Corporate America, compiled by Lawrence Cunningham. Dillon regards this curated work as invaluable, offering a structured overview of Buffett’s thoughts on investing and corporate governance. He even gifted copies to his board members, underscoring its significance in the realm of finance.
Adapting to change and psychological insights
Bernard Horn, founder of Polaris Capital Management, presents Adaptive Markets by Andrew Lo as essential reading. Horn likens investing to sailing, where the winds of market conditions constantly shift. He stresses the importance of ongoing education in a rapidly evolving landscape, warning that complacency can lead to missed opportunities.
Barry Ritholtz, founder of Ritholtz Wealth Management, recommends Thinking, Fast and Slow by Daniel Kahneman. Ritholtz argues that understanding the psychological factors at play is crucial for successful investing. He notes, “Your brain can be your greatest obstacle in the investment arena,” emphasizing that awareness of cognitive biases can help investors make better decisions.
The lessons of history
Recently, I contacted a range of successful investors to gather their top book recommendations for those seeking to hone their investing skills. The responses were enlightening and varied, providing a rich tapestry of wisdom.0
Recently, I contacted a range of successful investors to gather their top book recommendations for those seeking to hone their investing skills. The responses were enlightening and varied, providing a rich tapestry of wisdom.1
Recently, I contacted a range of successful investors to gather their top book recommendations for those seeking to hone their investing skills. The responses were enlightening and varied, providing a rich tapestry of wisdom.2