Book Notes

The book, published in 1920, shows how little human nature changes in markets, especially around speculation, gambling, and greed. It also offers historical context on how markets operated pre-SEC and warns about the dangers of widespread leverage that led to the 1919 to 1921 crash and the 1929 bubble and bust a decade later.

The Buffett Essays Symposium is an annotated transcript of a 1996 symposium held in concert with the release of The Essays of Warren Buffett to discuss Buffett’s thoughts on corporate governance, M&A, investing, accounting, and more found in his shareholder letters.

Jean-Marie Eveillard explains why value investing was the reason for his long-term success. From his introduction to Ben Graham to his transition to a Buffett-style approach, he shares the investing principles and experiences that led to a successful career.

Freeman-Shor studied over 1,800 investments made by fund managers under his leadership to see if there were similar habits that led to their success or failure. He shares the common habits found around losing and winning investments that improved and hurt returns.

Thomas Phelps studied past companies in existence from 1932 to 1971 that grew at least 100 times in size to see what they had in common. He shares the key characteristics found in compounding machines as well as the key traits investors need to invest for the long run.

Thomas Gibson’s 1909 classic breaks down the market cycles of the 1800s, the speculative behavior behind them, and the typical errors speculators make each step of the way.

The 1922 investing classic offers an introduction to new investors and sits as a reminder that the basic investment principles have remained the same over the past century.

The guide digs into the growing factor zoo to find the factor premia worth considering in a portfolio. The authors introduce five criteria any factor should meet, discuss the seven factors that qualify, and why other factors fall short of consideration.

The book looks at the persistence of the low-volatility anomaly throughout market history. The author explains why the anomaly exists and how to construct a portfolio of low-volatility stocks to take advantage of it.

The book tells the story of Peter Cundill’s life and career. A chance reading of SuperMoney led him to Ben Graham’s deep value approach, which he adapted for global stock markets.

Bharat Shah breaks down compounding machines. He points out the characteristics that drive companies to compound over long periods of time and the characteristics investors need to profit from them.

John Moody’s 1906 classic is a guide to the hazards, mistakes, and lessons of investing in the early 1900s. It’s a detailed account of how much, and yet how little, investing has changed over the last century.

William Green draws from the greatest investors to teach not only the lessons of their investment success but how those lessons crossover into how we make decisions in other areas of our lives.

Thomas Gibson’s 1906 classic is the result of studying thousands of speculative accounts over a ten-year period. It sits as a timeless warning on the numerous mistakes investors make in the stock market.

The Davis Dynasty is a story about Shelby Collum Davis and his family. The author mixes Davis’s story of how, over a 47-year investing career, he made a fortune with the market history he faced along the way.

Big Mistakes shows even the best investors make costly mistakes. It tells the stories of how some of the most famous, and infamous, investors failed miserably and the lessons we can learn from their biggest mistakes.

Gregory Zuckerman tells the story of Jim Simons and the brainpower behind Renaissance Technologies and the Medallion Fund — the most successful hedge fund ever.

Arthur Crump warns of the many obstacles, behavioral and otherwise, speculators face in the markets. The 1874 classic sits as another example that speculating has been a difficult endeavor for a very long time.

Bogle’s Enough draws from a lifetime of wisdom to reflect on the excesses of a financial system that led to the 2008 crisis and reminds readers of the benefits of a less greedy, long-term, client-first system (society) where success in life is defined by more than just money.

Deep Value explains, through numerous case studies and backed by data, why the counterintuitive approach of a traditional (deep) value strategy uncovers the most promising investment opportunities with limited risk.

Capital Account is a selection of reports by Marathon Asset Management. The reports introduce their capital cycle approach to investing and explain the impact the cycle had on businesses, markets, and investors during the late 1990s bubble.

Thomas Gibson warns of the repeated mistakes often made when people speculate in the market. The classic, written in 1923, adds historical context to what’s been known for a long time.

Howard Marks’s The Most Important Thing lays the groundwork for being a successful investor. He details the investment principles needed to tackle the complexity of markets and investing.  

Howard Marks explains the pattern of cycles found throughout market history. An investor who understands the different cycles — the history, the driving factors, their interconnectedness, and the role of psychology — can avoid common errors and best position their portfolio for success. 

Edwin Lefevre’s fictionalized account of Jesse Livermore is a classic. It shares timeless principles on trading in markets while warning of the biggest obstacle that plague speculators and investors alike — human nature.

Published in 1937, Ben Graham covers the basics of accounting and financial statements. It’s a condensed guide on reading the balance sheet and income statement, explaining common metrics, and tips on how to determine the soundness of a company.

Seth Klarman’s rare classic is about managing risk. Borrowing Ben Graham’s primary concept for the title, the book expands on the value investing philosophy and why it’s so successful.

The Buffett Partnership Letters are classic reading for any value investor. Readers get an inside view of Warren Buffett’s investment philosophy — seeing where it did and did not evolve — early in his career.

Joel Greenblatt explains why the average investor has an advantage over the pros with this introduction to investing. He covers the different methods for valuing a business, the limits of mutual funds, how different index fund weightings work, the (mis)behavior of investors, and why a long term perspective is so important.

Gray and Vogel introduce the theory behind momentum, what drives the effect, why it should persist, and how to build an improved quantitative momentum strategy that exploits the sustainable edge in investor misbehavior.

Benjamin Graham’s classic was first published in 1949. Graham wanted to teach investors the basic principles needed to navigate markets. In doing so, he teaches investors how to manage themselves.

Edgar Lawrence Smith set out to prove a theory, only to fail. But, in failure, he discovered that stocks had a hidden advantage over bonds in the long run. His work was published in 1924 and influenced the late ’20s market boom.

Gerald Loeb takes the contrary view that preservation capital requires some level of speculation to earn a return high enough to overcome the inevitable “losses” investors will experience in their lifetime.

All investors are susceptible to behavioral mistakes that then leads to poor returns. Gray and Carlisle create a quantitative value strategy that exploits the typical investors’ flaws while building temperament into the model.

John Ferguson Hume warns readers on many ways to lose money investing and speculating. The book represents a historical glimpse into Wall Street of the late 1800s and the timeless lessons of investor behavior.

Tobias Carlisle breaks down how investors like Warren Buffett, Carl Icahn, and others take advantage of the powerful force in markets known as mean reversion, why it exists, the opportunities it creates, and how a deep value strategy captures it. 

Fred Schwed delivers a cynical, sarcastic, insiders perspective on the business of Wall Street. His book stands as a timeless warning to investors and speculators alike.

G.C. Selden’s timeless book describes the influence human nature has on markets and what investors/traders must do to overcome potential behavioral errors to be successful. It’s as relevant today as it was when it was published in 1912.

John Kenneth Galbraith journeys through the recurring theme of speculative mania and financial ruin inherent in markets, His big picture view describes the common features associated with most euphoric episodes.

Concentrated Investing profiles eight investors with different investment styles to figure out the principles behind their returns. Was it due to their behavior, the source of capital, the number of investment, or position sizing? The authors answer those questions then look at what the data says.

The Zurich Axioms is a book about managing risk and reward. Twelve “axioms” define how to think about risk and uncertainty in such a way that you’re more likely to be rewarded than not.

Joseph De La Vega’s Confusion De Confusiones is the earliest known book on the trading practices of a stock market. Set as four separate conversations between three people, you get a sense of what investing and speculating was like in the mid to late 1600s.

Joel Greenblatt’s Little Book delivers a crash course in value investing. He covers how to view the market, why most people fail to beat the market, metrics for quality and low priced stocks, and how his Magic Formula works.

Nick Murray delivers the timeless “simple truths” of investing that never change regardless of where things stand with the markets.

The Money Game is a series of stories on the games people play with money and markets. Told by Adam Smith (aka George Goodman), the stories uncover the emotion, error, myth, and irrationality that surrounds it all.