Wall Street's Brightest Minds Share The Best Books They Read In 2013
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The responses vary — from works of fiction to nonfiction titles, both new and old.
Some deal with finance, but most don't, at least directly.
Brenda Kelly, IG Markets: "The Ocean at the End of the Lane" by Neil Gaiman
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"I don’t know what can be gleaned from my choice of book but I really enjoyed 'The Ocean at the End of the Lane' by Neil Gaiman. This was before it was made book of the year, might I add. I think it was a well-deserved accolade. I'm generally a fan of the dystopian and fantasy-themed novels. It evokes memories of my childhood (good and bad) and I think that’s the intention – you remember the way you thought as a child. It's a book I'll read again."
—Brenda Kelly, chief market strategist at IG Markets
Barry Ritholtz, Ritholtz Wealth Management: "The Success Equation" by Michael J. Mauboussin
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"The inability to distinguish between luck and skill has a huge impact on investors. They think they can select a stock that will outperform an index. Sometimes they can; most of the time they cannot. But distinguishing when it is the result of skill and when it's random is beyond most investors' abilities. Same with choosing a hedge fund or mutual fund manager — what is perceived as an ability to make a good decision turns out to be mostly random."
—Barry Ritholtz, CIO of Ritholtz Wealth Management
Peter Tchir, TF Market Advisors: "Animal Farm" by George Orwell
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"I re-read Animal Farm. I have this growing fear that we are reverting to a system that we tried to escape. A little far-fetched but can’t shake this feeling that something is wrong and what made this country great is being eroded bit by bit."
—Peter Tchir, founder of TF Market Advisors
Mebane Faber, Cambria Investment Management: "The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success" by William N. Thorndike
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"It focuses on the less sexy but equally important job of a CEO — capital allocation."
—Mebane Faber, CIO and portfolio manager at Cambria Investment Management
Byron Wien, Blackstone Group: "After the Music Stopped" by Alan Blinder
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Jack Bogle, The Vanguard Group: "Lawrence in Arabia" by Scott Anderson
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"Lawrence in Arabia by Scott Anderson, which describes the groundwork for today's upheaval in the Middle East."
—Jack Bogle, founder and retired CEO of The Vanguard Group
Dan Dicker, MercBloc: "Submergence" by JM Ledgard
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"The best book by far of the many I read in 2013 has to be Submergence, by J.M. Ledgard. Its main storyline tells of a romance between two seemingly random personalities, but through sweeping prose and intellectual acumen on subjects as broad and diverse as marine biology and middle eastern religion, the book accomplishes so much more. A book for adults."
—Dan Dicker, President of MercBloc
Aurelija Augulyte, Nordea: "The Great Wave" by David Hackett Fisher
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"'The Great Wave' by David Hackett Fischer was one of the best summer holiday reads, a must-read for those who love economic history. It is relevant today as inflation/deflation has been a key theme for a while, and even policymakers acknowledge they do not fully grasp why inflation is so low. The book is a 'zoom-out' on the topic, as the author examines long history, comparing price 'waves' of different centuries, and explains them through economic, political, cultural and other social phenomena. Bonus: over 100 charts with vintage historic data."
—Aurelija Augulyte, macro strategist at Nordea
David Rosenberg, Gluskin Sheff: "Lords of Finance" by Liaquat Ahamed
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John Brynjolfsson, CIO of Armored Wolf: "Exorbitant Privilege" by Barry Eichengreen
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"It defines eloquently and with huge authority the concept of a reserve currency, why the U.S. isn't experiencing much inflation or currency depreciation, and why it will be decades before the euro, yen or yuan will come close to unseating the dollar."
—John Brynjolfsson, CIO of Armored Wolf
Constantin Gurdgiev, Trinity College, Dublin: "Europe: The Struggle for Supremacy, from 1453 to the Present" by Brendan Simms
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"One of the most exciting books of 2013 was Brendan Simms' 'Europe: The Struggle for Supremacy, from 1453 to the Present' (Basic Books; 690 pages; $35). The importance of this substantial tome rests with its core theme and thesis: per Simms, the role of the German question has formed a pivotal axis for shaping European history, politics and economics since time immemorial. As such, the juxtaposition of Germany vis-a-vis other national and state interests across Europe is so entrenched in the European identity as to create a powerful framing bias for the entire region's raison d'être. This thesis is non-trivial in the context of European financial markets and economies future. As the EU, per Simms' thesis, was created to resolve the territorial and political dilemmas posited by the German question, the likely direction for the Union's political, social and economic evolution can also be traced along the same lines. This presents us with a rather clear dichotomies of choice faced by Europe: either a German-styled federalisation, or a disorderly dissolution of the broader Union; either a German-styled acceptance of failure and painful restructuring, or a disorderly economic and fiscal decline across generations; either a German-styled ascetic monetarism, or a disorderly plethora of currencies tied to their declining economies; etc, etc, etc. None of these are fully priced in the markets to-date and none are reflected in the current institutional infrastructure of Europe. The mis-match between the political objective (the German dominance) and economic purpose of the common currency is a tip of an iceberg when it comes to the internal contradictions contained with the EU systems. Post-crisis, absorption of Germany into Europe — the original project of the Union — is now increasingly likely to turn inside-out. The corollary of Simms' thesis is that instead of a Europeanised Germany we are likely to witness a Germanised Europe. The euro crisis, serving to magnify this process by increasing the relative importance of Germany in the euro area economy and decision-making, is only the beginning of end of this process that, per Simms, started some 560 years ago."
—Constantin Gurdgiev, adjunct professor of finance at Trinity College, Dublin and University College, Dublin
James von Simson, Thurleigh Investment Managers: "The Success Equation" by Michael J. Mauboussin
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"When a trade stops out, was it because your original hypothesis was wrong or because you were unlucky with the timing? When a trade is successful, was it for the reason you expected or did you catch a lucky break? If you can’t tell if you're clever or lucky, then you are nothing more than a passenger. Building on Kahneman’s 1973 paper ‘On the Psychology of Prediction’, Mauboussin’s latest, excellent, book attempts to show how to work out what decides the outcome of a given situation. Not through anecdote, but through concrete suggestions such as determining the value of different statistics. For useless statistics cloud judgements while useful ones are predictive and persistent. As Mauboussin reminds us; skill is controllable and repeatable, luck is not."
—James von Simson, portfolio manager at Thurleigh Investment Managers
Dan Baffoe: "The Great Gatsby" by F. Scott Fitzgerald and "The Liberty Amendments" by Mark Levin
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"Two books come to mind: 'The Great Gatsby,' which I re-read in honor of the movie's release, and 'The Liberty Amendments' by Mark Levin. I was struck by the year-end real estate industry parties, both in New York and D.C., that were described as almost ebullient and Gatsby-like. But it was Levin's well laid out argument that the Federal government has 'broken its banks' and his offer of solutions to rein it back in that made me think it was one of the best of the year."
—Daniel A. Baffoe, Treasury sales/strategist at large
Joseph LaVorgna, Deutsche Bank: "Stabilizing an Unstable Economy" by Hyman Minsky
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Emad Mostaque, NOAH Capital Markets: "How Will You Measure Your Life?" by Clayton Christensen
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"Best book I've read has been 'How Will You Measure Your Life?' by Harvard professor Clayton Christensen after he recovered from a heart attack, late-stage cancer and a stroke in a period of three years. This is an important book as, in the financial world in particular, we often lose focus of what is really important. It's also interesting in how he deploys his business model frameworks to address these issues."
—Emad Mostaque, strategist at NOAH Capital Markets
Conor Sen, New River Investments: "White Flight: Atlanta and the Making of Modern Conservatism" by Kevin M. Kruse
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"As Americans, talking about race makes us uncomfortable, and we assume it'll be unproductive at best or inflammatory at worst, so we choose not to do it. But so many of the challenges we're dealing with in 2014 — income inequality, growing gentrification pressures in our cities, views on Obamacare, Google buses as a symbol of the housing crisis in San Francisco — arguably have some root in the social and political crisis that was the de-industrialization of our cities and resulting white flight that took place from 1950-2000. This book goes into the micro stories that took place in Atlanta from the mid-1940s to mid-1960s, which touches on everything from shifting boundaries for schools and churches to political alliances [blacks and the white business class against lower-class whites] to the role of race in mortgage finance. With the near-term picture for large transportation infrastructure projects looking bleak due to tight budgets and a skeptical public, more urban density is our economic reality in the U.S. for the foreseeable future, and we need to learn to think beyond FRED charts to understand the human pressures this density will create."
—Conor Sen, portfolio manager at New River Investments
Matt Busigin, Macrofugue Analytics: "Wage Labour and Capital" by Karl Marx
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"The extraordinarily detailed mechanical description of what we would now call sectoral flows allowed me to far better understand our modern system, and also identify what worked with the modern mixed economy that we avoided the predicted collapse of capitalism. The analysis of the incentives of each actor in the system transcends economic religion associated with either studying or eschewing the work of Karl Marx."
—Matt Busigin, editor and principal author of Macrofugue Analytics
Rich Bernstein, Richard Bernstein Advisors: "The Orphan Master's Son" by Adam Johnson
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Jared Woodard, Condor Options: "Knowledge in an Uncertain World" by Jeremy Fantl & Matthew McGrath
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"Is it possible that what you know depends somehow on what's at stake for you personally? Under what conditions can you act on some belief when there's a tiny chance you might be disastrously wrong? The book deals with these sorts of topics and has had a big impact in academic epistemology."
—Jared Woodard, principal of Condor Options
Vince Foster: "Structural Traps, Politics and Monetary Policy" by Robert H. Dugger and Angel Ubide
"In their 2004 analysis of the Japanese experience, the authors explain how the current dysfunction in Washington coupled with monetary policy focused on stimulating aggregate demand has been ineffective in addressing deflationary conditions that are a product of too much excess capacity."
—Vince Foster, interest rate strategist
Michael McDonough, Bloomberg LP: "Salt" by Mark Kurlansky
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"While it isn't new, my favorite read this year was 'Salt' by Mark Kurlansky — he also wrote cod. The history of what's in that shaker on the table is amazing and quite important to the development of many ancient economies."
—Michael McDonough, chief economist at Bloomberg LP
John Stoltzfus, Oppenheimer: "The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes" by Ken Fisher
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Tadas Viskanta, Abnormal Returns: "The Success Equation" by Michael J. Mauboussin
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"'The Success Equation: Untangling Skill and Luck in Business, Sports and Investing' by Michael J. Mauboussin helps put into perspective the relative roles of skill (and luck) in a wide variety of fields. I always find it when findings outside of investing, like sports, helps highlight some obvious truths. The fact is that early all the outcomes we are see in politics, business, finance and investing have a big component of luck. Hard work and dedication may be necessary for success but unfortunately they are not sufficient. Mauboussin's has always been a must-read. His 2013 book is no exception."
—Tadas Viskanta, founder and editor of Abnormal Returns
Jim O'Neill, formerly of Goldman Sachs: "Mexico: The Great Hope" by Enrique Peña Nieto
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David Bianco, Deutsche Bank: "How Children Succeed" by Paul Tough
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Sam Stovall, S&P Capital IQ: "The Point of No Return" by John P. Marquand
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"The best book I read was written in 1949: 'The Point of No Return,' by John P. Marquand, about a Wall Streeter who has to revisit his childhood home and confront memories punctuated by the Crash of 1929."
—Sam Stovall, chief equity strategist at S&P Capital IQ
Millan Mulraine, TD Securities: "The Great Deformation" by David Stockman
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"'The Great Deformation' (by David Stockman) was the best book I have read this year. Its historical accounts of the policy missteps (both monetary and fiscal) taken in the decades leading up to the 2008 global financial crisis provide a cogent and provocative approach to understanding the scale of the problems we currently face, and a framework for benchmarking the optimal policy course to future prosperity."
—Millan Mulraine, deputy head of U.S. research and strategy at TD Securities
Stephen Kinsella, Agenda Research: "Doing Capitalism in the Innovation Economy" by William Janeway
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"'Doing Capitalism' by William Janeway is the best book I read in 2013. The book is part memoir, part market insight, part general theory of capital allocation. The book is engagingly written, sometimes very funny, and it gives the reader a sense of what's important when it comes to investing in an era of rapid technological change."
—Stephen Kinsella, economist at Agenda Research
Gabriel Sterne, Exotix: "The Default Line" by Faisal Islam
Amazon
"A book I enjoyed is Faisal Islam's 'The Default Line', an engaging non-technical interpretation of the global financial and euro crisis."
—Gabriel Sterne, fixed income economist at Exotix
Read more: http://www.businessinsider.com/wall-streets-reading-list-2014-1?op=1#ixzz2pUr1J1J2
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