As The Mad Hedge Fund Trader, I am asked daily about my favorite financial books by the legions of subscribers who are using this site to educate themselves about the markets. That is one of my goals. I read about 100 non-fiction books a year, and below are my picks, which are entertaining if not insightful. I have left out books about specific trading systems guaranteeing windfall profits, because they all eventually blow up. The best trading strategies will never be written about, but only whispered of in poorly lit bars after work, the kind where your feet stick to the floor with the foul restrooms. Successful traders are a notoriously secretive bunch who don't want copy cats hanging on to their coattails spoiling their markets. When I do hear about these I pass them on to you through my newsletter. Give yourself an edge and a decent education and foundation by reading the list below.
Security Analysis
by Benjamin Graham and David Dodd
The Bible of security analysis. If you are only going to read only one book, make this it.
Making Sense of the Dollar: Exposing Dangerous Myths about Trade and Foreign Exchange
by Marc Chandler
The Ascent of Money: A Financial History of the World
by Niall Ferguson
Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks
by W. Edward Olmstead
The ETF Trend Following Playbook: Profiting from Trends in Bull or Bear Markets with Exchange Traded Funds
by Tom Lydon
A Random Walk Down Wall Street
by Burton G. Malkiel
The history of risk analysis on Wall Street.
The Black Swan: The Impact of the Highly Improbable
by Nassim Nicholas Taleb
An iconoclastic, rock throwing, in your face rebuttal to convention risk analysis theory.
The Snowball: Warren Buffet and the Business of Life
by Alice Schroeder
The biography of the greatest investor of our time.
Extraordinary Popular Delusions and the Madness of Crowds
by Charles MacKay
The history of bubbles, from tulip mania, to the South Sea bubble, to the 1929 crash. Boy, does history ever repeat itself!
The Great Crash 1929
by John Kenneth Galbraith
A must read history about the big one. You'll be amazed by the parallels with today.
Reminiscences of a Stock Market Operator
by Edwin Lefevre
Biography of one of the most famous speculators of the roaring twenties, who sadly committed suicide in a public bathroom in 1940. You won't believe what they got away with in the pre-SEC days.
The Strategic Bond Investor: Strategies and Tools to Unlock the Power of the Bond Market
by Anthony Crescenzi
The bond side of the equation. You need to know where interest rates are going and how they will get there.
Economics
by Paul Samuelson
What you missed by not going to the Harvard Business School. Your classic education about Keynesian economics that lets you ignore all that fluff in the broker reports. He got a Nobel Prize for this.
Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market
by Jim Rogers
The former George Soros partner tells you why you've been buying all that copper, wheat, and gold.
Crash Proof: How to Profit from the Coming Economic Collapse
by Peter Schiff
Nicely outlines the rationale for moving out of the dollar an into foreign stock markets, gold, and silver, although he is a little extreme in his views of the future of the US.
Market Wizards: Interviews With Top Traders
by Jack D. Schwager
How the pros do it.
The Complete Guide to Investing in Commodity Trading and Futures: How to Earn High Rates of Return Safely
by Mary B. Holihan
The abc's of commodity investing.
Liars Poker: Rising through the Wreckage on Wall Street
by Michael Lewis
My friend's first book, what it is like to work at Goldman Sachs, except then it was Salomon Brothers. When it first came out many thought I had written this book under a nom du plum.
Beat the Dealer: A Winning Strategy for the Game of Twenty-One
by Edwin O. Thorp
How to win at Black Jack by card counting. I put myself through college on this book, and so did Pimco's Bill Gross. Not so easy now. Every trader at Morgan Stanley was required to read this book. A nice introduction to probability analysis under stress.
The Money Game
by Adam Smith
How Wall Street Works. A peek into the Wall Street I grew up in during the sixties. How little has changed.
The Little Book that Beats the Market
by Joel Greenblatt
The traditional value approach to picking stocks
Other Worthy Purchases:
The 1/10th ounce 22 carat American Eagle Coin
To read my story, click here.
The 1 ounce .999 Fine Silver Buffalo Coin
To read my story, click here.
Greenspan’s Bubbles: The Age of Ignorance At The Federal Reserve
by William Fleckenstein
The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management
by Peter F. Drucker
The End of the Free Market: Who Wins the War Between States and Corporations?
by Ian Bremmer
The Fat Tail: The Power of Political Knowledge in an Uncertain World
by Ian Bremmer
The Next 100 Years: A Forecast for the 21st Century
by George Friedman
When Genius Failed: The Rise and Fall of Long Term Capital Management
by Roger Lowenstein
Why you're not shorting deep out of the money volatility in big size.
Against the Gods: The Remarkable History of Risk
by Peter L. Bernstein
How ancient trade routes grew into the global financial system we all know and love.
The Island: A History of the First Marine Division on Guadalcanal
by Herbert Laing Merillat
To read my story, click here.
The Pacific
by Hugh Ambrose
To read my story, click here.
The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century On-Line Pioneers
by Tom Standage
To read my story, click here.
Power, Faith, and Fantasy: America in the Middle East: 1776 to the Present
by Michael B. Oren
To read my story, click here.
Dossier: The Secret History of Armand Hammer
by Edward Jay Epstein, Armand Hammer
To read my story, click here.
Hiroshima
by John Hersey
To read my story, click here.
iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It
by Steve Wozniak
To read my story, click here.
The Edible History of Humanity
by Tom Standage
The long term bull case for food, and why you own wheat, corn, soybeans, MOO and the DBA
