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- In a year spent mostly in lockdown, Wall Street professionals, like many others, have turned to books for solace and wisdom.
- Business Insider asked 10 Wall Street fund managers, strategists, and finance executives for the best books they read in 2020 and why they would recommend that investors read them.
- Visit Business Insider’s homepage for more stories.
A common denominator among many Wall Street investors is their insatiable appetite for reading.
Buffett and Munger are only two of the hundreds of successful investors and business leaders who have sung praises for reading.
In 2020, reading took on a new meaning as the coronavirus-induced lockdown canceled most outdoor activities. For many investment and finance professionals, the contrast was especially distinct as they switched from frequent travels and in-person meetings to Zoom conferences and phone calls.
However, the silver lining to spending more time at home was that more time could be allocated to uninterrupted reading.
Business Insider asked 10 Wall Street investors, strategists, and executives to share the best books they read in 2020 and their biggest takeaways.
From business management books and investing classics to historical recounts, these books range across genre, style, time period, and geography.
In no specific order, their titles, authors, descriptions, and corresponding commentaries, are listed below.
Stock Market 1. ‘The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success’
Author: William N. Thorndike
Description: “In this refreshing, counterintuitive book, author Will Thorndike brings to bear the analytical wisdom of a successful career in investing, closely evaluating the performance of companies and their leaders. You will meet eight individualistic CEOs whose firms’ average returns outperformed the S&P 500 by a factor of twenty — in other words, an investment of $10,000 with each of these CEOs, on average, would have been worth over $1.5 million twenty-five years later.
“You may not know all their names, but you will recognize their companies: General Cinema, Ralston Purina, The Washington Post Company, Berkshire Hathaway, General Dynamics, Capital Cities Broadcasting, TCI, and Teledyne.
“In The Outsiders, you’ll learn the traits and methods — striking for their consistency and relentless rationality — that helped these unique leaders achieve such exceptional performance.” (Source: Amazon)
Recommend by Kent Insley, chief investment officer of Tiedemann Advisors.
Commentary: “I make everyone who joins my team read it when they join. And it gets to the reason why management and quality of management is such an important component of overall quality investing,” Insley said. “I find that one to be a good one for any time.”
Stock Market 2. ‘Radical Uncertainty: Decision-Making Beyond the Numbers’
Author: John Kay and Mervyn King
Description: “Some uncertainties are resolvable. The insurance industry’s actuarial tables and the gambler’s roulette wheel both yield to the tools of probability theory. Most situations in life, however, involve a deeper kind of uncertainty, a radical uncertainty for which historical data provide no useful guidance to future outcomes. Radical ncertainty concerns events whose determinants are insufficiently understood for probabilities to be known or forecasting possible.” (Source: Amazon)
Recommend by Di Zhou, portfolio manager at Thornburg Investment Management
Commentary: “It basically talks about risks and uncertainties,” Zhou said. “Some of the risks are quantifiable, but some risks are radical uncertainties that cannot be captured by using models or making up assumptions and whatnot. I highly recommend it.”
Stock Market 3. ‘Common Stocks and Uncommon Profits and Other Writings’
Author: Philip A. Fisher
Description: “Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies, introduced almost forty years ago, are not only studied and applied by today’s financiers and investors, but are also regarded by many as gospel. This book is invaluable reading and has been since it was first published in 1958.” (Source: Amazon)
Recommend by Alex Ely, chief investment officer of US growth equity at Macquarie Investment Management
Commentary: “I read some investment books. But as time has gone on, I really spend most of my time really focused on just what we do, and not listening to too many other people. But there is a book by Philip Arthur Fisher that’s called ‘Common Stocks and Uncommon Profits’ that was written in the 50s, about growth investing in general,” said Ely.
He continued: “And that analyzes a lot of the things we talk about when it comes to growth investing. Growth investing didn’t even really exist until the 50s and 60s, so we’re still new as a form of investment, but lots of ways to benefit over time.”
Stock Market 4. ‘Caste: The Origins of Our Discontents’
Author: Isabel Wilkerson
Description: “Beyond race, class, or other factors, there is a powerful caste system that influences people’s lives and behavior and the nation’s fate. Linking the caste systems of America, India, and Nazi Germany, Wilkerson explores eight pillars that underlie caste systems across civilizations, including divine will, bloodlines, stigma, and more.” (Source: Amazon)
Recommend by Peter Kraus, Chairman and CEO of Aperture Investors
Commentary: “I read a lot of history because I think history has interesting lessons in it. History never repeats itself but there are behavioral trends in history,” said Kraus. “I think this book has a very interesting view and she is a really good writer.”
Stock Market 5. ‘Option Volatility and Pricing: Advanced Trading Strategies and Techniques’
Author: Sheldon Natenberg
Description: “Covering a wide range of topics as diverse and exciting as the market itself, this text enables both new and experienced traders to delve in detail into the many aspects of option markets, including: The foundations of option theory; Dynamic hedging; Volatility and directional trading strategies; Risk analysis; Position management; Stock index futures and options; Volatility contracts.” (Source: Amazon)
Recommend by Scott Nations, president and chief investment officer of Nations Indexes
Commentary: “I hate to pick one because there are several good ones and people are going to end up being left out unfairly,” Nations said. “But there’s a book by Sheldon Natenberg called ‘Option Volatility and Pricing’. That is just a fantastic book.”
Stock Market 6. ‘Don Quixote’
Author: Miguel De Cervantes Saavedra
Description: “Don Quixote has become so entranced reading tales of chivalry that he decides to turn knight errant himself. In the company of his faithful squire, Sancho Panza, these exploits blossom in all sorts of wonderful ways. While Quixote’s fancy often leads him astray —he tilts at windmills, imagining them to be giants — Sancho acquires cunning and a certain sagacity. Sane madman and wise fool, they roam the world together — and together they have haunted readers’ imaginations for nearly four hundred years.” (Source: Amazon)
Recommend by Rafael Resendes, co-founder of Applied Finance Capital Management
Commentary: “While entertaining as a child cartoon due to Cervantes’ great caricatures, ‘Don Quixote’ provides a vivid reminder of the importance of balancing idealism and realism in life and markets,” Resendes said.
Stock Market 7. ‘The Wealth of Humans: Work, Power, and Status in the Twenty-first Century’
Author: Ryan Avent
Description: “Digital technology is transforming every corner of the economy, fundamentally altering the way things are done, who does them, and what they earn for their efforts. In The Wealth of Humans, Economist editor Ryan Avent brings up-to-the-minute research and reporting to bear on the major economic question of our time: can the modern world manage technological changes every bit as disruptive as those that shook the socioeconomic landscape of the 19th century?” (Source: Amazon)
Recommend by David Lebovitz, global market strategist at J.P. Morgan Asset Management
Commentary: “I think that it is an important book for every investor to read in order to really understand the technological revolution and digital transformation that the economy is set to go through over the course of the coming years,” Lebovitz said.
Stock Market 8. ‘Market Mover: Lessons from a Decade of Change at Nasdaq’
Author: Robert Greifeld
Description: “The former CEO and Chairman of Nasdaq shares insights and lessons learned from one of the world’s largest stock exchanges, detailing the company’s transformation from a fledgling U.S. equities market to a global financial technology company.” (Source: Amazon)
Recommend by Arianne Criqui, head of derivatives and global client services at Cboe Global Markets
Commentary: “This year I read a lot of non-markets books, but one in particular that I spent time reading was Robert Greifeld’s book “Market Mover: Lessons from a Decade of Change at Nasdaq,” said Criqui.
“I found it was very valuable to understand how the process evolved at Nasdaq and how they’re thinking,” she added, “or what their forward-thinking strategy has looked like and how it continues to evolve when you’re thinking about multiple different areas where an exchange can grow above and beyond the transactional side. That book was super interesting.”
Stock Market 9. ‘James Monroe: A Life’
Author: Tim McGrath
Description: “This magnificent new biography vividly recreates the epic sweep of Monroe’s life: his near-death wounding at Trenton and a brutal winter at Valley Forge; his pivotal negotiations with France over the Louisiana Purchase; his deep, complex friendships with Thomas Jefferson and James Madison; his valiant leadership when the British ransacked the nation’s capital and burned down the Executive Mansion; and Monroe’s lifelong struggle to reckon with his own complicity in slavery.
“Elected the fifth president of the United States in 1816, this fiercest of partisans sought to bridge divisions and sow unity, calming turbulent political seas and inheriting Washington’s mantle of placing country above party. Over his two terms, Monroe transformed the nation, strengthening American power both at home and abroad.” (Source: Amazon)
Recommend by Nancy Tengler, chief investment officer of Laffer Tengler Investments
Commentary: “As a long-term professional investor I have learned investing is not just numbers but a study in human behavior. Consequently I read history,” said Tengler.
“I was struck by the similarities in events during Monroe’s life and today. Published early this year (before COVID heated up) I was struck by the following passage re: the yellow fever outbreak of 1793: ‘Partisanship had grown so fierce even treatments for the disease became politicized.’ Historical and market cycles repeat. That should give us hope.”
Stock Market 10. ‘Citizens of London: The Americans Who Stood with Britain in Its Darkest, Finest Hour’
Author: Lynne Olson
Description: “The acclaimed author of Troublesome Young Men reveals the behind-the-scenes story of how the United States forged its wartime alliance with Britain, told from the perspective of three key American players in London: Edward R. Murrow, the handsome, chain-smoking head of CBS News in Europe; Averell Harriman, the hard-driving millionaire who ran FDR’s Lend-Lease program in London; and John Gilbert Winant, the shy, idealistic U.S. ambassador to Britain.” (Source: Amazon)
Recommend by Matthew Breidert, senior portfolio manager at Ecofin
Commentary: “Edward Murrow shows the importance of shining the light on truth and shining the light on issues that matter. I think there’s a lot of metaphor for what we do or what we’re trying to do that investors have a role to play here,” said Breidert.
“They’re ensuring that truth is out there and that we’re investing in things that are going to have some kind of a positive impact,” he added. “In a lot of ways, I think that that book captures the importance of storytelling, the importance of messaging, and the importance of integrity. It’s a great read.”