Books That Pay Dividends

Organizing the bookshelf is long overdue. There is an entire shelf dedicated to financial information even though the hardcopy collection is now smaller than the 'electronic book' collection. Out of the thirty or so that are in front of me, here is a list of some of the books that have had a positive influence on the trading accounts.

Reminiscences of a Stock Operator, Edwin Lefevre
A staple and obvious first choice, as well as a reminder that ignorance, hope, fear, and greed still exist, same as they always did.

The (Mis)Behavior of Markets, Benoit Mandelbrot
A re-evaluation of financial theory from the inventor of fractal geometry.

Extraordinary Popular Delusions and the Madness of Crowds, Charles MacKay

Confusion de Confusiones, Joseph De La Vega
These two case studies in crowd psychology underscore the lessons of the first two books.

The Visual Investor, John J. Murphy
A decent technical analysis primer.

More Than You Know, Michael J. Mauboussin
As the sub-title states, "Finding Financial Wisdom in Unconventional Places". Covers investment philosophy, psychology of investing, innovation and competitive strategy, and science and complexity theory. An entertaining book if you like to skip around or read the last chapter first.

Trader Vic - Methods of a Wall Street Master, Victor Sperandeo
A 70.7% nominal annual rate of return over a ten year period? Not bad.

The Motley Fool Investment Guide, David and Tom Gardner
I bought this book years ago so that I could learn the magic of their Foolish Four Method (Double the Dow Method). It had something to do with buying some of the highest yielding Dow stocks, I think, and rotating them annually. As it turned out, the Gardner brothers admitted that "after further review, this method doesn't outperform as we had thought". Nice try. I empathize. The book has plenty of other more useful information, but more importantly, it was an early inspiration to actually try to double the Dow, or better yet, never lose another dime regardless of which way the market tends. Of course, the biggest inspiration of all was the 2008 crash.

The book shelf is looking better already. The financial shelf is above the various textbooks collected over time that have not been used to prop up the computer monitor or level a table; and right below the shelf full of self-help books. Seems like a good place for them.

Currently reading: New Ideas From Dead Economists, Todd G. Buchholz

Always reading: Webster's New Collegiate Dictionary, Copyright 1974
No trendy techno-words, or boobonics in this edition.

Word(s) of the Day: powder monkey: one who carries or has charge of explosives (as in blasting operations)

...right between powder metallurgy and powder puff. Seems like a good place for him.