This Saturday is National Book Lovers Day, so we thought we’d put together a list of beloved and valued books on investing, business and finance — as shared by portfolio managers on Covestor and members of the Covestor senior management team.
Check out the list of ten books below for some recommendations for National Book Lovers Day:
1. The Art of Asset Allocation by David Darst
Selected by Charles Sizemore – CFA, RIA, and manager of the Strategic Growth Allocation portfolio on Covestor
“This is distinctly not a ‘how-to-trade-stocks’ book. As its name implies, it is a guide to building a comprehensive portfolio from the top-down. It is important to remember that, while a savvy stock pick can make you wealthy, studies have shown that more than 90% of your portfolio returns are explained by asset allocation.”
2. Active Portfolio Management by Richard Grinold and Ronald Kahn
Selected by Jane Edmondson – MBA, RIA CEO, and manager of the Mid Cap Quant portfolio on Covestor
“This is the book that many quantitative investment managers consider their ‘handbook.’ I am a strong proponent of active management, but too often, emotional biases and subjectivity can detract from investment performance. The quantitative approaches discussed in this book illustrate how to potentially produce superior returns on a consistent and repeatable basis, while managing risk. These basic principles have helped me manage money for my clients year after year.”
3. Wall Street: How It Works and for Whom by Doug Henwood
Selected by Asheesh Advani – Oxford doctorate, and CEO at Covestor
“This great book is a coherent, although somewhat biased, critique of everything that’s wrong with Wall Street. The good news is that for every abuse of power and every misaligned incentive, there is an opportunity for entrepreneurs and new ventures to provide investors with a better deal.”
4. The Intelligent Investor by Benjamin Graham
Selected by Aaron Pring – commercial construction VP, and manager of the Buy and Hold portfolio on Covestor
“Like a lot of value investors, may favorite book on investing is the classic by Benjamin Graham. My investment style is a direct reflection of the lessons and ideas taught in this book. This book essentially creates a framework for value investing that is still relevant in modern day investing. While my particular value investing style has been derived from various information and educational sources, this book stands at the top of the pyramid as one of the most useful resources I have ever come across.”
5. One Up On Wall Street by Peter Lynch
Selected by Drew Steinman – CPA, and manager of the Leveraged Value portfolio on Covestor
“Lynch was a true contrarian and master of avoiding groupthink. I’ve applied his teachings in avoiding high-flying stocks that everyone loves, and instead investing in out-of-favor companies with attractive value.”
6. When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein
Selected by Sanjoy Ghosh – Wharton Ph.D., and Chief Investment Officer at Covestor
“It’s a fascinating story that highlights that there is no such thing as a ‘riskless’ arbitrage, at least not one that can scale. Once a strategy starts leaving a footprint in the market, it carries with liquidity risks that become extremely difficult to hedge.”
7. The 100 Best Stocks to Own in America by Gene Walden
Selected by Robert Freedland – MD, optical surgeon, and manager of the Healthcare portfolio on Covestor
“One of my favorite books on investing is about picking stocks.The last edition was published back in 2001 but Walden’s philosophy influenced me by suggesting that there isn’t any one particular way to identify a good stock. Walden discusses financial metrics like earnings growth and dividends. He then identifies some of what I would call the ‘great stocks’ of all time, and some of these I now call my own. These are the companies that show great price and earnings momentum and have consistency — all rather important features in an investment. He developed his own approach of scoring them and then ranked them accordingly. Today I do not use any particular scoring system, but try to look at this persistence of performance to determine stock ideas. Gene Walden was one author who made a big impact on my own philosophy.”
8. The Big Short: Inside the Doomsday Machine by Michael Lewis
Selected by Bhargav Shivarthy, Covestor Director of Client Relations
“This is a read that’s both fun and fascinating. I devoured it over a weekend. For me, the book really drove home the point that investment talent is spread across geography and backgrounds. In other words, you don’t have to have an Ivy League education or live in a financial capital like New York to be a great investor.”
9. I Am Right, You Are Wrong: From This to the New Renaissance, from Rock Logic to Water Logic by Edward de Bono
Selected by Bimal Shah, Covestor Chief Technology Officer
“I read this at the start of my career and it has deeply influenced me. Specifically, the book taught me the value of multiple perspectives, even if they contradict each other. Perhaps more importantly, I realized I did not always need to be right in order to do the right thing.”
10. The Little Book of Behavioral Investing by James Montier
Selected by John Spence – MarketWatch reporting alum, and Head of Content at Covestor
“This is a tough one, because I’m a big fan of books on the history of financial markets, and biographies of famous investors. However, if you want to be a better investor, I’d go with this gem. We’re all just a jumble of emotions and instincts left over from our hunter-gatherer roots. As humans, it feels good to run with the pack, but that may not be the best approach to investing. It just seems our hard wiring and emotional biases almost doom us to fail as investors. The theme of the book is how not to be your own worst enemy, and Montier points out all our behavioral traits that can trip us up when investing. He weaves in funny anecdotes and his own experiences as an investor and strategist. Each chapter also has quizzes designed to illustrate our emotional biases – I failed every one.”
Hopefully these books inspire you to celebrate National Books Lovers Day with a new read to increase your investing acumen…
What are your favorite financial and business books that didn’t make the list?
—
To learn more about investing with the portfolio managers on Covestor, contact our Client Advisers at clientservices@interactiveadvisors.com or 1.866.825.3005. Or you can try Covestor’s services with a free trial account.
DISCLAIMER: The information in this material is not intended to be personalized financial advice and should not be solely relied on for making financial decisions. All investments involve risk, the amount of which may vary significantly. Past performance is no guarantee of future results.
