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Summer shutdown

Posted on July 21, 2009 by Richard Beddard
Filed Under Investing |

In practice:

We’re all going…

CostOfCapitalism I’m taking an extended break this summer and although I don’t usually make predictions, I confidently predict the next blog will be on Wednesday 26 August, one month from now.

In the meantime, and in time honoured tradition, here’s some summer reading.

I’m taking two books away:

Nassim Nicholas Taleb’s Fooled by Randomness. Since Taleb’s catch phrase “I don’t know” is unusual among pundits, I’m determined to find out what he does know.

The White Tiger by Aravind Adiga. A novel selected because it looks like it has little to do with finance and my cousin liked it enough to give it to me.

If I hadn’t just read it, I’d smuggle Anthony Bolton’s Investing Against The Tide into my suitcase too, and there are two more books I’m really keen to read, but for the sake of a relatively finance-free break, they’re staying on my wish list.

They are The Cost of Capitalism by Robert Barbera and  The Myth of the Rational Market by Justin Fox.

The Cost of Capitalism brings the economist Hyman Minsky to a wider audience, and thereby explains the mess the financial system and the global economy are in.

The Myth of the Rational Market is an antidote to A Random Walk Down Wall Street, the classic popular explication of the conventional financial theories that helped bring about financial crisis.

The blurb quotes Robert Shiller who once said efficient markets represent:

…one of the most remarkable errors in the history of economic thought…

Efficient market sceptics could have done with this ammo a few years ago.

We had it, of course, in James Montier’s Behavioural Investing, still one of my favourite books. I’ve quoted Montier so many times on this blog I feel like apologising, but now he’s moved to GMO from Soc Gen I don’t think he’ll be sending out his weekly notes, so sadly we’ll be hearing less from him.

However, here’s a penultimate hurrah, Montier’s summer reading list of the year’s best books, which features The Myth of the Rational Market and…

On the financial crisis

  1. Greenspan’s Bubbles by William Fleckenstein,  “the perfect antidote to the fawning ‘Maestro’ by Bob Woodward”
  2. More Mortgage Meltdown by Whitney Tilson and Glen Tongue, “explains clearly how we ended up in this mess… an added bonus is the insight into Tilson’s investment process provided by the case studies.”
  3. Mr Market Miscalculates by Jim Grant, “His insights lay bare the fallacy of Greenspan’s view that bubbles can’t be analysed ex ante.”

On investment

  1. Memo to Oaktree Clients by Howard Marks, “The topics covered in this collection include investment processes, bubbles and the folly of forecasting”
  2. Distressed Investing by Marty Whitman and Fernando Diz, “Despite the US focus, I think the book contains enough perspective to be worthy of an international audience”
  3. The Snowball by Alice Schroeder, “Schroeder often leaves me wondering if I would actually like Buffett as a person.”

Psychology

  1. Animal Spirits by George Akerlof and Robert Shiller, “attempts to flesh out some of the psychology behind Keynes’ infamous animal spirits.”
  2. Think Twice by Michael Mauboussin, “…a tour de force of behavioural
    decision errors and some clever suggestions as to how we might be able to protect ourselves.”
  3. Dance with Chance by Spyros Makridakis, Robin Hogarth and Anil Gaba, “…when we stop seeking to control the things we can’t, we free up time to concentrate to the things we can influence.”

Hidden gems

  1. Ghost Map by Steven Johnson, “Part medical thriller, part detective story, part history lesson, this book tells the story of the cholera epidemic in C19th London.”
  2. The Tao of Pooh and the Te of Piglet by Benjamin Hoff, “Hoff uses the medium of the much-loved Pooh bear to expound and explain the essence of Taoism”
  3. A Gift to My Children by Jim Rogers, “The wisdom packed into this little book is 85 pages is wonderful.”

And here, by way of a parting gift perhaps, are Montier’s lists of required reading for all investors, all-time classics in other words:

Investment 101

The classics

Modern wonders

Psychological musts

Hidden gems

Investment 201

Finance

Psychology

Hidden gems

I wrote about my shelf of favourite books here. Since then, there’s been no change, but maybe when I return in August, I’ll add Fooled by Randomness to it.

Until then… Goodbye, and have a great summer!

Category: Investing

Comments

2 Responses to “Summer shutdown”

  1. Monevator on July 22nd, 2009 5:11 pm

    Fooled by Randomness is excellent - better than the merely good Black Swan that everyone keeps quoting.

    Look forward to your return - only recently discovered the blog, so plenty to read back through! :)

  2. Richard Beddard on July 22nd, 2009 8:46 pm

    Thanks Monevator, I’ve enjoyed getting acquainted with your blog too, catch you next month!

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