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Your Favorite Investing and Finance Books
Old 07-31-2003, 08:32 AM   #1
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Your Favorite Investing and Finance Books

My favorite: Tobias, "The Only Investment Guide You'll Ever Need."

Other good ones:
"The Wealthy Barber" (for beginners)
"The Complete Tightwadd Gazette"
"Your Money or Your Life"
"The New Rules of Money" (I disagree with virtually everything that Edelman says, but it's insightful to read his defence of high-cost financial planning)
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Re: Your Favorite Investing and Finance Books
Old 07-31-2003, 10:50 AM   #2
 
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Re: Your Favorite Investing and Finance Books

My current favorite (although probably due to recency) is:

"Why Smart People Make Big Money Mistakes" - Belsky & Gilovich

Some other good ones:

"Personal Finance for Dummies" - Eric Tyson
"Insurance for Dummies" - J. Hungelmann
"Common Sense on Mutual Funds" - John Bogle
"The Intelligent Asset Allocator" - W. Bernstein
"Four Pillars of Investing" - W. Bernstein
"Rational Investing for Irrational Times" - L. Swedroe
"Protecting Your Wealth" - R. Ferri
"All About Index Funds" - R. Ferri
"Random Walk Down Wall Street" - B. Malkiel
"Winning the Loser's Game" - C. Ellis
"Asset Allocation" - Roger Gibson
"The Bond Book" - Annette Thau
"J.K. Lasser's Your Winning Retirement Plan" - H. Hebeler

I'm trying to wade my way through "Strategic Asset Allocation", by Campbell and Viceira, with my limited knowledge of Utility Theory. I may have to come back to it. There should be a list of pre-requisites for this book.

Three cheers for the public library. My un-ending source of free reading. I too was highly disappointed with Edelman's books.

Alec
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Re: Your Favorite Investing and Finance Books
Old 07-31-2003, 11:23 AM   #3
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Re: Your Favorite Investing and Finance Books

Note: I'm linking book titles to Amazon.com not necessarily to promote them but to provide the reader a way to discover the author, publisher, ISBN# and comparative pricing info if they're interested.

A note about The Wealthy Barber: I hated it, but my sister and her then-husband loved it. It's a great personal finance book for people who hate reference books/manuals. But I'm a more fact-oriented person and found it annoying that all the information was tied into a story. But if you hate boring, dry, fact-filled manuals this would probably be great for you. The whole book is written as conversations in a barber shop, if I recall correctly. (That reminds me, I wanted to rent the movie "BarberShop", but I don't think there's any relation to this book :-) ).

When I first started learning about personal finance I read Personal Finance for Dummies and Get a Financial Life: Personal Finance In Your Twenties and Thirties. They both cover about the same information, but I found the latter particularly helpful with filing information; I never was sure how long I should keep paycheck stubs, credit card invoices and such, or how I should file them, but this book gave some solid recommendations that I followed.

I believe I have a copy of Tobias' book, but I haven't read it yet. (My dad gave an old copy to me.) Looking at Amazon.com it looks like the hardcover version (which I have) was published in February 1978 and the paperback was published January 2002. I wonder if it changed at all.

The Millionaire Next Door was good, but by the time I had read it I had already adopted the lessons in it. I know I read some Peter Lynch and Warrent Buffet stuff from the library, including a videotape of a Warrent Buffet interview, and much of that was good for stock investing information. However I've avoided individual stocks so far because I'm too emotionally involved when I pick them. If I had tried stocks back when I was thinking about doing it I would've sunk with Cisco, Nortel and Intel. I've been surprisingly comfortable, though, watching my VFINX nearly half in value. (I feel like it almost certainly will recover before I retire; I'm not as confident about Nortel or even Cisco even though I think Nortel has some VoIP (voice over internet protocol) technology that could change the world's phone systems in the next decade.) Next time I feel ilke reading I'll probably check out something by John Bogle (founder of Vanguard and the index fund).

One thing that strikes me about FIRE-minded people is that I infer that in many cases our personality is predisposed to this type of lifestye and these values. (I find johngalt a very interesting exception as a lifelong workaholic & high-roller suddenly reborn into live-below-your-means ER.) Intercst's Retire Early Hope Page did an unscientific poll a while back to see if certain personality types were more likely to retire early. It did seem to be the case. This is leading up to a couple of books I found interesting that aren't really finance or ER related but were about the Myers-Briggs personality types in REHP's poll.: Please Understand Me and Please Understand Me II. The latter explores the personality types deeper, but the former is an easier read and gets the point accross well. I have both and refer to both at times. I'm not very deeply into the "correctness" or Truth (capital T) of scientific analyses like these, but I found it a useful tool to find out my type (according to them) and read about that type and other types because most of the time I seem to perceive the world differently than the people around me (the FI/RE-minded people think more like me, though!). One thing I took from it personally that I hadn't really considered before is that I'm the type of person who can enjoy things like art, fine cars or motorcycles, etc. without having to own them; some people need to own them to enjoy them, but I can just enjoy that I get to see or use them from time to time. I also felt a bit validated by some other aspects of my personality that don't seem to exist in the people around me; the book says my type (INTP) is fairly rare, and there were some things I identified with when it talked about relationships and business.
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Re: Your Favorite Investing and Finance Books
Old 08-01-2003, 07:08 AM   #4
 
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Re: Your Favorite Investing and Finance Books

bongo2, I agree with your choices and would add:

"Financial Peace" - Dave Ramsey
"Rich Dad, Poor Dad" - Robert Kiyosaki
"Multiple Streams of Income" - Robert Allen
"Cashing In On the American Dream . . . " - Paul Terhorst

eigosensei
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Re: Your Favorite Investing and Finance Books
Old 08-01-2003, 10:09 AM   #5
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Re: Your Favorite Investing and Finance Books

Quote:
"Rich Dad, Poor Dad" - Robert Kiyosaki
I also enjoyed Rich Dad, Poor Dad. But later I read this rebuttal of the book. That site has become rather longer since I first read it, but in short it appears--according to John T. Reed--that Rich Dad is a fictional character and that Kiyosaki may be misrepresenting his wealth and his success stories may be fictional.

I think you can still find the book useful even if you realize it may be fiction, though.
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Re: Your Favorite Investing and Finance Books
Old 08-01-2003, 06:22 PM   #6
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Re: Your Favorite Investing and Finance Books

Quote:
A note about The Wealthy Barber: I hated it, but my sister and her then-husband loved it. It's a great personal finance book for people who hate reference books/manuals. But I'm a more fact-oriented person and found it annoying that all the information was tied into a story. But if you hate boring, dry, fact-filled manuals this would probably be great for you.

This is a great starter book and for those who don't plan on early retirement - it may be the only book they need. It was the first financial book that I read in the late 80's when I was young and my nose was tight to the grindstone on a career that I then loved. At that time I didn't have time to do much more than read this book - what time wasn't consumed by work (much of my time) went to play.

When I finally started to get serious about early retirement I would have been in a much worse starting position if it wasn't for this book. I have read much of what's available and useful since becoming serious. I think the only real reading I need to do to keep going is the moral/morale encouragement provided by posting and reading posts of FIREees and wanabes on the various FIRE boards.

I've given copies of the book to both of my younger sisters and one of them has taken the advice. The other one I worry about but as the saying goes "you can lead a horse to water but you can't make it drink".

Hyperborea
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Re: Your Favorite Investing and Finance Books
Old 08-04-2003, 06:35 AM   #7
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Re: Your Favorite Investing and Finance Books

If a person understands the basic concepts of market efficiency, and reduction of risk through diversification, there is no need to read 10 different books to confirm it. Just read Jonathan Clements's articles in the Wall Street Journal (or William Bernstein's or Vamguard's web site).

These sources all recommend index investing, which practically guarantees that a person, over an extended period of years, will experience higher returns than other investors.

If you want to substantially "beat the market" over the long term, you need to have a deeper understanding than most other investors of the fundamental social/economic/political forces that drive it (and then perhaps have some luck!)

In that regard, the most incisive (and readable) analysis that I have seen is "The Lexus and the Olive Tree" by Thomas L. Friedman. He makes the case that the U.S., more than any other nation, has the political/economic/cultural conditions that encourage long-term economic growth. Since reading his book, I have pared back my holdings of international stocks.
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Re: Your Favorite Investing and Finance Books
Old 08-05-2003, 04:08 AM   #8
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Re: Your Favorite Investing and Finance Books

Re. "read 10 different books to confirm it". Not only is it
not necessary, it may even be counterproductive, i.e.
information overload or even the dreaded paralysis
by analysis.
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Re: Your Favorite Investing and Finance Books
Old 08-05-2003, 09:47 AM   #9
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Re: Your Favorite Investing and Finance Books

Quote:
If a person understands the basic concepts of market efficiency, and reduction of risk through diversification, there is no need to read 10 different books to confirm it. *Just read Jonathan Clements's articles in the Wall Street Journal (or William Bernstein's or Vamguard's web site).
Of all the books/sources I've read I'd agree with Ted's picks. I also read Bernstein's monthly postings at his web site "Efficient Frontiers".
Another web source I found recently that does an outstanding job of interpreting academic studies on indexing and other investment strategies for us mere mortals is "IndexInvestor.com". They also have model portfolios that are worth studying.
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Re: Your Favorite Investing and Finance Books
Old 10-08-2003, 08:18 PM   #10
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Re: Your Favorite Investing and Finance Books

One of my favorites is "How to Retire and Early and Live Well with Less Than a Million Dollars" author is Gillette Edmunds.
Great information on designing your portfolio and figuring out your own personal equation to determine how much money you need.
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Re: Your Favorite Investing and Finance Books
Old 11-14-2003, 05:46 AM   #11
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Re: Your Favorite Investing and Finance Books

Did you find this book still valid considering the post bubble stock market and we are in a secular bear market? My though is that the bear will continue in 2005.
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Re: Your Favorite Investing and Finance Books
Old 11-14-2003, 08:25 AM   #12
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Re: Your Favorite Investing and Finance Books

Looking back thirty years - finance books tend to follow the market/interest/real estate cycle and whatever is currently popular - efficient frontier/asset correlation now a days. I went through a minor stock market flat from 1966 thru 1982 and read a lot of real estate books while steadily investing in the stock market - DCA ,401k,IRA from 1977 to 1993 in the index 500 got me to ER.

Reading is good - low cost and something to do while you DCA and LBYM - time in the market, not market timing.

While your reading The Lexus and The Olive Tree remember Charles De Gaul - "God Looks after Drunkerd's. Fool's and The United States of America".

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Re: Your Favorite Investing and Finance Books
Old 11-14-2003, 07:00 PM   #13
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Re: Your Favorite Investing and Finance Books

I didn't care for the format of the book "Rational investing in Irrational times" by L. Swedrowe, but I recently read "What Wall Street Doesn't Want You to Know" by him. I really enjoyed reading it. Because of it and Bogle's book on mutual funds, I am changing/refining the stock (mutual fund) part of my investment strategy. Some very interesting observations on mutual funds, which mirror my own experience with some of them.

I'm still sticking with 'hands on' real estate investment for 1/4 of my portfolio.

Wayne
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Re: Your Favorite Investing and Finance Books
Old 11-15-2003, 04:31 AM   #14
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Re: Your Favorite Investing and Finance Books

I'm pretty much down to Bogle and Berstein's website's. Don't get the WSJ.

I also went through a newsletter phase in the 1980's and went to AAII chapter meetings in the early 1990's-before Bogle's 1994 book.

Anybody a newsletter junkie? - as well as books?

Also I ran across a reference to 'Five Acres and Independance' which briefly influenced my father after WW II - anybody know the history of that version of frugile?
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Re: Your Favorite Investing and Finance Books
Old 11-15-2003, 05:58 AM   #15
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Re: Your Favorite Investing and Finance Books

Quote:
Looking back thirty years - finance books tend to follow the market/interest/real estate cycle and whatever is currently popular - efficient frontier/asset correlation now a days.

While your reading The Lexus and The Olive Tree remember Charles De Gaul - "God Looks after Drunkerd's. Fool's and The United States of America".
I agree that some "popular" books on finance attempt to cash-in on investing fads. *A good example was the one about the Dow Jones Industrial Averages reaching 40,000, which was published as the market was experiencing its bubble.

But I don't think that asset allocation, based on the limited correlation of asset returns, is a "fad." *It is fundamental financial economics based on a lot of good research starting with Harry Markowitz -- I think in the 1950's. *I suspect that one reason why it has taken so long to become recognized outside of academia is that it debunks the "sales hype" of "financial professionals," who have an interest in giving investors the false belief that the securities they are selling will "beat the market."

Regarding the "Lexus and the Olive Tree," (which was published in 2000) I agree with practically everything in it, but one place where Tom Friedman "blew it" was to cite Enron as a model for future corporations. *Just goes to show you that nobody's perfeck *
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Re: Your Favorite Investing and Finance Books
Old 11-15-2003, 08:20 AM   #16
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Re: Your Favorite Investing and Finance Books

I read one email newsletter, John Mauldin's. It is a though provoking, interesting letter. I often agree with his thoughts, and it is not a 'investment advice' letter. Take a look at his website, http://www.frontlinethoughts.com, if you are interested.

This weeks on mutual fund late trading is kind of lame, but more recent ones are available on his web site.

Wayne
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Re: Your Favorite Investing and Finance Books
Old 11-15-2003, 11:58 AM   #17
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Re: Your Favorite Investing and Finance Books

I've read most of the books recommended and generally agree with comments I've seen here (see my reply of a few months back).
I'd like to add a new one. I recently took a class called "Investments" as part of a CFP certification program. The text for the class is -- surprise -- titled "Investments" by Charles P. Jones (Wiley & Sons, publisher).
After reading all the other books, I found this book to be the most balanced, objective and through on what works and doesn't and why. It is also surprisingly readable even with the statistical sections (e.g., equations on standard deviation and expected return, etc. ). Its expensive (around $120) but well worth it for anyone who is serious about investments.
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