What books changed your outlook on how you should invest?

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Wildebeest
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What books changed your outlook on how you should invest?

Post by Wildebeest » Fri Feb 23, 2018 8:17 pm

Once upon a time I read John C Bogle's " Bogle on mutual funds" and it made so much sense and I was ready. And I was sold.

At the time I did not have much money but I went all in. Index funds it is and it will be.

I reread the book 20 years later and while I was taken by the logic it was not the same. I wondered: did I loose a step? may be my brain did not adapt as it did as before. Why did I think the book was earth shattering before and now not anymore?

May be I read to many books.

The current book that changed my perspective is "Fooled by randomness" by Nassim Taleb.

What book changed book your perspective on how to invest?
Last edited by Wildebeest on Fri Feb 23, 2018 8:47 pm, edited 1 time in total.
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Re: What books changed your outlook on how you should invest?

Post by MotoTrojan » Fri Feb 23, 2018 8:22 pm

Most of the ones I have read had similar themes, but Random Walk Down Wallstreet resonated the most for me.

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Portfolio7
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Re: What books changed your outlook on how you should invest?

Post by Portfolio7 » Fri Feb 23, 2018 8:22 pm

Unconventional Success is one that I keep returning to in one way or another, and The Intelligent Asset Allocator.
An investment in knowledge pays the best interest.

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Taylor Larimore
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"Bogle on Mutual Funds"

Post by Taylor Larimore » Fri Feb 23, 2018 8:29 pm

Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
Once upon a time I read John C Bogle's " All about mutual funds" and it made so much sense and I was ready. And I was sold.

At the time I did not have much money but I went all in. Index funds it is and it will be.
Wildebeest:

Your memory (like mine) is slipping. Mr. Bogle never wrote a book with the title, "All About Mutual Funds." Perhaps you mean his first book, "Bogle on Mutual Funds." It is one of two books (the other was Random Walk Down Wall Street) that put us on the road to financial success.

Thank you Jack!

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Wildebeest
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Re: What books changed your outlook on how you should invest?

Post by Wildebeest » Fri Feb 23, 2018 8:31 pm

MotoTrojan wrote:
Fri Feb 23, 2018 8:22 pm
Most of the ones I have read had similar themes, but Random Walk Down Wallstreet resonated the most for me.
I loved a "Random walk down Wall Street". A great book. It would have been even a greater book if we never heard of Malkiel again and I had not read "The (Mis) behavior of markets" by Benoit Mandelbroit.
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Re: What books changed your outlook on how you should invest?

Post by iceport » Fri Feb 23, 2018 8:35 pm

Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
I reread the book 20 years later and while I was taken by the logic it was not the same. I wondered: did I loose a step? may be my brain did not adapt as it did as before. Why did I think the book was earth shattering before and now not anymore?
That should be the expected experience, Wildebeest. The second time around you were already familiar with the concepts and had internalized the lessons. Frankly, you should be more surprised (and concerned) if you feel the same sense of sudden insight and comprehension the second time around. That would be more indicative of a lost step or two!
Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
What book changed book your perspective on how to invest?
I have to give shared credit on this to Malkiel's A Random Walk Down Wall Street and Bernstein's The Four Pillars of Investing.
"Discipline matters more than allocation.” ─William Bernstein

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Taylor Larimore
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Re: What books changed your outlook on how you should invest?

Post by Taylor Larimore » Fri Feb 23, 2018 8:36 pm

Wildebeest wrote:
Fri Feb 23, 2018 8:31 pm
MotoTrojan wrote:
Fri Feb 23, 2018 8:22 pm
Most of the ones I have read had similar themes, but Random Walk Down Wallstreet resonated the most for me.
I loved a "Random walk down Wall Street". A great book. It would have been even a greater book if we never heard of Malkiel again and I had not read "The (Mis) behavior of markets" by Benoit Mandelbroit.
Wkildebeest:

Can you tell us why the second book changed your mind ?

Thank you and best wishes.

Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

benway
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Re: What books changed your outlook on how you should invest?

Post by benway » Fri Feb 23, 2018 8:39 pm

Not a book, but the WSJ article Taylor references in this thread:

Dr. Bernstein, How to Tell if Your Retirement Nest Egg is Big Enough
viewtopic.php?t=198079
Last edited by benway on Fri Feb 23, 2018 9:02 pm, edited 1 time in total.

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Wildebeest
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Re: "Bogle on Mutual Funds"

Post by Wildebeest » Fri Feb 23, 2018 8:45 pm

Taylor Larimore wrote:
Fri Feb 23, 2018 8:29 pm
Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
Once upon a time I read John C Bogle's " All about mutual funds" and it made so much sense and I was ready. And I was sold.

At the time I did not have much money but I went all in. Index funds it is and it will be.
Wildebeest:

Your memory (like mine) is slipping. Mr. Bogle never wrote a book with the title, "All About Mutual Funds." Perhaps you mean his first book, "Bogle on Mutual Funds." It is one of two books (the other was Random Walk Down Wall Street) that put us on the road to financial success.

Thank you Jack!

Best wishes.
Taylor
Taylor,

You are right. I stand corrected. Thank you for correcting me so gently,


Thank you and thank you Jack C. Bogle.

W.
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Re: What books changed your outlook on how you should invest?

Post by Grt2bOutdoors » Fri Feb 23, 2018 8:47 pm

The Little Book of Common Sense Investing. Fees matter.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: What books changed your outlook on how you should invest?

Post by jminv » Fri Feb 23, 2018 8:56 pm

I agree with all of the above and would add:
Valuation: The Four Cornerstones of Corporate Finance - it's by McKinsey and it's a good, easy read. Not boring at all like the title might signal.

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Re: What books changed your outlook on how you should invest?

Post by WildBill » Fri Feb 23, 2018 9:28 pm

Howdy

Two.

The Intelligent Investor, by Benjamin Graham, and Winning the Loser’s Game by Charles Ellis.

Happy reading.

W B
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Re: What books changed your outlook on how you should invest?

Post by randomizer » Fri Feb 23, 2018 9:32 pm

Bogleheads Guide to Investing -- brought me here.

William Bernstein’s stuff -- pushed me to 75:25 (down from 90:10).
87.5:12.5, EM tilt — HODL the course!

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Re: What books changed your outlook on how you should invest?

Post by Robert T » Fri Feb 23, 2018 9:52 pm

.
If I were to point to a single piece it would be a paper not a book. It was written 25 years ago - still relevant today https://faculty.fuqua.duke.edu/~charvey ... n_risk.pdf

Robert
.

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Re: What books changed your outlook on how you should invest?

Post by stlutz » Fri Feb 23, 2018 10:06 pm

Erik Falkenstein's, "The Missing Risk Premium". Not that well written from the perspective of someone with an English degree, but interesting, well-researched, and provocative. Bottom line argument is that taking a lot of risk does not pay off.

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Re: What books changed your outlook on how you should invest?

Post by delamer » Fri Feb 23, 2018 10:17 pm

Not a book, but (now retired) Scott Burns’s syndicated personal finance newspaper columns introduced me to index investing.

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Re: What books changed your outlook on how you should invest?

Post by kramer » Fri Feb 23, 2018 11:34 pm

Many books, of course, have had an influence. Recently, this book had a major impact on my investments:

Michael McClung, Living Off Your Money: The Modern Mechanics of Investing During Retirement with Stocks and Bonds.

https://www.amazon.com/Living-Off-Your- ... 0997403403

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Re: What books changed your outlook on how you should invest?

Post by catdude » Sat Feb 24, 2018 1:45 am

.The Index Fund Solution, by Richard Evans. That led me to Mr. Bogle’s Common Sense on Mutual Funds. I’ve been a Boglehead ever since.
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Re: What books changed your outlook on how you should invest?

Post by Sockpuppet » Sat Feb 24, 2018 2:17 am

The Bogleheads Guide to Investing

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Re: What books changed your outlook on how you should invest?

Post by captpete » Sat Feb 24, 2018 2:52 am

As a teenager I invested in actively managed mutual funds then as a young adult, early to mid 20's, I invested in individual stocks. When I got married at 26 I took a hard look at my inability to invest wisely and so went with a retail investment group Raymond James. I felt good with Raymond James, I felt I was being responsible with the fruits of our labor. Even the fees, which were exorbitant, seemed to somehow make the investment seem "worth" it, as if paying a high fee added value to the investment choice. The first year with RJ we made over 29k and paid 4k in fees. It made sense, "you have to pay to play", I told myself. But something underlining seemed to erk me a bit. The sales pitch of my "Financial Adviser" seemed too "sales pitchy". He said something about how the market has returned an average of 10% in it's history and thru mutual funds I can get that kind of return. He said mutual funds are the only way to get that return because you can't simply "Buy the Market". He also spoke of a "guru" that will invest in individual stocks for people with over 250k to invest.
He seemed to be talking out of both sides of his mouth and I was confused. Stocks have never made sense to me, I am not an analyst. I just bought companies that I and many others used on a daily basis. The theory of the mutual funds at RJ made sense but something was not right.

One day I was in the library and I walked past the "Suggested reading" shelf and there was a book called "The Lazy Persons Guide to Investing". I thought, "what the hell" . I read it, and it got me seriously thinking. Then I ordered Bogle's "The Little Book of Common Sense Investing" and I knew I was finished with RJ and playing the market like a gambler.
Finally something that made sense, total sense. Even after moving everything to VG and divorcing RJ it still took me 2 years to get to a 3 fund portfolio. I would tilt to small caps and mid caps and emerging markets. I had no set AA. A year ago I went 3 fund, my wife is Target 2055. I am thinking about moving all our retirement accts to TG55 just for ease. Then I am down to just managing the Taxable Acct.

I am very grateful for John Bogle. We need more people with his level of character, integrity and devotion to his fellow man in leadership roles throughout industry.

I was impressed with the returns from RJ, but after back-testing I would have made even more had I just been in a 3 fund portfolio. Not only did the actively managed funds under-perform, they cost a lot.

Regards

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Re: What books changed your outlook on how you should invest?

Post by livesoft » Sat Feb 24, 2018 5:39 am

We started investing with Vanguard in the very early 1980's. I still have my copy of "Random Walk Down Wall Street" from back then. So there was no need to change my outlook on how I should invest. But then I read William Bernstein's "The Four Pillars of Investing" in this century and that book alone made me switch to a small-cap and value-tilted portfolio. I became a much more tax-efficient investor then as well.

But imagine investing in 1982. That was one of the best years to start investing. There was no internet. One could watch Louis Rukeyser on PBS's "Wall $treet Week" and get books from the library or read things like Money magazine. The economy didn't do so well and there was the Savings & Loan crisis a few years later. CDs were paying over 10% soon enough, too.
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Re: What books changed your outlook on how you should invest?

Post by fennewaldaj » Sat Feb 24, 2018 6:29 am

I read Fooled by Randomness and The Black Swan early in my 20s which made me kinda scared of stocks. I road through the financial crisis in the G fund though that was mostly by accident (TSP defaults to 100% G). In around 2011 I read a random walk down wallstreet and gained a more realistic view of stocks and the importance of low cost funds. At somepoint I read a bit of the bogleheads wiki. I changed my now legacy TSP to some % of C fund at that point but I did not really understand rebalancing so it kinda just sat there for like 6 years (though I did put some in I and S around 2014) By mid 2017 when I looked at it it was up from something like 50% stocks to 80% stocks. When I got a work 401k in 2011 I started to put more index funds than other stuff. In mid 2017 I graduated pharmacy school and increased my savings rate from about ~8-12k a year to 60k a year. Given that i decided to get super serious about learning about investing at this point. I have read like 20ish books on the subject since then. The most influential on me in this last round were
All about asset allocation - Rick Ferri
Rational Expectations - William Berstien
Asset Management - A Systemic Approach to Factor Based Investing - Andrew Ang
Stocks for the Long Run Jeremy Siegel

I also read a whole bunch of Larry Swedroe articles on ETF.com and I found them very useful. I read his factor book and enjoyed it but had been exposed to most of the data presented by the time I read the book.

I also got a lot out of the other books I read but the four I listed first were my favorites
The investors manifesto - William Bernstein
The intelligent asset allocator - William Bernstein
Skating where the puck was (The correlation game in a flat world) - William Bernstein
Deep Risk - William Bernstein
Rational Expectations - William Bernstein
Your complete Guide to Factor‑Based Investing-Andrew L. Berkin and Larry E. Swedroe
Pioneering Portfolio Management - David Swenson
Global Asset Allocation - Meb Faber
Asset Allocation: Balancing Financial Risk - Roger Gibson
Expected Returns: An Investor's Guide to Harvesting Market Rewards - Antti Ilmanen
Asset Management: A Systematic Approach to Factor Investing - Andrew Ang
The Bond Book - Annette Thau
Common Sense on Mutual Funds- Jack Bogle
The Little Book of Alternative Investments - Ben Stein and Phil DeMuth
The Bogleheads Guide to Investing - Taylor Larimore, Mel Lindauer, Michael LeBoeufr
The Only Guide You'll Ever Need for the Right Financial Plan -Larry Swedroe

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Re: What books changed your outlook on how you should invest?

Post by sixtyforty » Sat Feb 24, 2018 7:45 am

The Little Book of Commons Sense Investing - John Bogle
"Simplicity is the ultimate sophistication" - Leonardo Da Vinci

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Re: What books changed your outlook on how you should invest?

Post by Toons » Sat Feb 24, 2018 8:17 am

The Only Investment Guide You'll Ever Need.
Andrew Tobias








:idea: :idea: :idea: :idea:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: What books changed your outlook on how you should invest?

Post by deltaneutral83 » Sat Feb 24, 2018 9:28 am

I was unaware that the returns for active (zero sum game) was the same as passive, it was a concept I'd never thought about and not knowing mechanically how the market works. You only see firms saying they beat the market yada, yada, yada. When you realize mathematically that all the combined active funds must return the same amount as the passive funds, you realize active is a zero sum game EXCEPT for the AUM fees, loads, high ER's and tax inefficiencies in taxable accounts. You can't knowingly choose the good managers in advance and they will revert back to the mean and over 20 years they have very little chance of beating the market, in a taxable account, it's nearly impossible (<2%). So reach into a bag of 50 marbles and pick out the 1 that wins. No thanks. I think I read that in a Swedroe article or Bogle book, but its certainly a common-sensical concept but unfortunately it was eye opening for me.

As far as single stocks for the cowboys out there, reading about how there are just a few of the companies of the S&P that represent the majority of the gains was eye opening. So if for example you have 10 companies, something like 2 of them are doing the heavy lifting, 1 more is close to the market average, and then the rest are dogs. The deck is mathematically stacked against you in single stock picking, you have less than 50% chance of finding a winner, what you buy is something an institution is likely selling, and what you sell is likely what an institution is buying. What do you know that these Ivy league quants and analysts who spend 80 hours a week analyzing companies don't. Answer: Nothing.

For me it was understanding the mathematical concepts behind why active funds and single stock picking is a loser's game over time.

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Re: What books changed your outlook on how you should invest?

Post by welderwannabe » Sat Feb 24, 2018 9:38 am

Annette Thau 'The Bond Book'.

Obviously Bogleheads Guide to Investing was a great read too.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: What books changed your outlook on how you should invest?

Post by bobcat2 » Sat Feb 24, 2018 9:56 am

Before I started investing an article about investing greatly influenced how I would invest. It was a column in Newsweek by economist Paul Samuelson in the summer of 1976 on how the small mutual fund company Vanguard would soon by introducing the first retail index stock mutual fund.

By the time I was investing for myself and my parents in the early 1980s I had both portfolios partially invested in Vanguard's index stock fund and my investing was guided by Burton Malkiel's A Random Walk Down Wall Street. The book that later significantly changed my perspective on saving and investing was Worry-Free Investing by Zvi Bodie and Michael Clowes.
Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
The current book that changed my perspective is "Fooled by randomness" by Nassim Taleb.
For someone whose perspective was changed by Fooled by Randomness I suggest gaining alternative perspectives on investing by further reading from the following list. :wink:

Pensionize Your Nest Egg - Milevsky et al.
Risk Less and Prosper - Bodie et al.
Spend til the End - Kotlikoff et al.
Worry-Free Investing - Bodie et al.
Retirement Portfolios - Zwecher (Somewhat more advanced than the above books, but little math.)

Strategic Financial Planning over the Lifecycle - Charupat et al.
Also somewhat more advanced than first four books on list. Can be used as advanced undergrad text. There is some advanced math but it is limited to two chapters, which can be skipped with little lost except deeper mathematical understanding of material.

Personal Life-Cycle Economics - Stevens
Undergrad textbook that applies life-cycle economics to your personal situation. Math is kept to a minimum and there is no advanced math.

Financial Economics - Merton et al. (or its first and cheaper edition) Finance - Merton et al.
Excellent undergraduate textbook on finance. I have over 100 books on finance and investing. Most of the time I rely on this one book rather than any of the others when needing help with personal financial problems. Well-written with little math involved other than TVM problem solving, but you do have to do some hard thinking, which is never a bad thing IMO.

BobK
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Re: What books changed your outlook on how you should invest?

Post by Caduceus » Sat Feb 24, 2018 11:34 am

I've gone through several stages.

When I first started, I changed my life by reading personal finance books. Books by Jonathan Clements, Jane Bryant Quinn, even David Bach and Dave Ramsey.

Then when I became more interested in the mechanics of how to invest, I found John Bogle, the Bogleheads, Burton Malkiel, and William Bernstein fairly quickly. I was a hardcore Boglehead indexer for a long time.

Then I started reading Ben Graham and Phil Fisher, and as a result of Alice Schroeder's biography of Buffett got sucked into Buffett's shareholder letters. I then decided to study accounting and finance on my own and now my investing style is very different. My default is in index funds, but I have a significant proportion of my funds in undervalued companies. Over the last five years, the "self-managed" part of my portfolio has significantly outperformed the index portion. But who's to say that this isn't just luck? Time will tell.

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Re: What books changed your outlook on how you should invest?

Post by Sandtrap » Sat Feb 24, 2018 12:20 pm

Og Mandino, Think And Grow Rich, Acres of Diamonds.
Taught me the value of saving, thinking about money.

Millionaire Next Door.
I'm not alone, many paths to similar goals.

aloha,
jim :D

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Re: What books changed your outlook on how you should invest?

Post by engineerartist » Sat Feb 24, 2018 3:22 pm

The Little Book of Common Sense Investing - John Boggle
The Indomitable Investor - Steven M. Sears
The Single Best Investment - Lowell Miller
The Dividend Growth Investment Strategy - Roxann Klugman
Retire like a Dairy Farmer - Evan Hoobchaak
Enough - John Boggle
Retired - dividend growth investor

Bud
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Re: What books changed your outlook on how you should invest?

Post by Bud » Sat Feb 24, 2018 3:32 pm

Four Pillars of Investing
Coffee House Investor
John Bogle's various papers and articles
https://www.vanguard.com/bogle_site/bogle_lib.html
http://johncbogle.com/wordpress/academic-articles/

Random Walker
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Re: What books changed your outlook on how you should invest?

Post by Random Walker » Sat Feb 24, 2018 4:03 pm

Econ 101 and Chemistry 1. I didn’t know it at the time, but the model of perfect competition from Economics and equilibrium from Chemistry perfectly positioned me to easily buy into the efficient markets hypothesis when I read about that many years later. Charles Ellis’ Winning The Loser’s Game revealed just how competitive the markets are with 90% of trading between big institutions with pros, computers,PhDs, on each side of the trade. All this made Bogle’s “Cost Matters Hypothesis” crystal clear from the start of his books. As I’ve evolved to a huge factorized, alterated, slice & dicer, I’d say one of the biggest influences is Roger Gibson’s Asset Allocation: Balancing Financial Risk. The book has given me a framework for considering new portfolio additions: increasing the likelihood of my portfolio landing in the northwest corner of a risk return plot. Lastly, Larry Swedroe’s You Complete Guide To Factor Based Investing has crystallized my criteria for new portfolio additions. I would note that Larry Swedroe in Reducing The Risk Of Black Swans (new edition very soon) looks at portfolio efficiency from the point of view of Sharpe ratios, standard deviations, expected returns, maximal drawdowns. I believe this is just another way of seeing the same issues represented in Gibson’s Asset Allocation with his risk-return plots.
After one has the Bogle CMH basics down, I strongly recommend Gibson’s Asset Allocation and Larry’s Black Swans for guidelines on building a more efficient portfolio. Each investor will decide for themselves where they lie on the spectrum of trade offs between improved portfolio efficiency and cost.

Dave

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Re: What books changed your outlook on how you should invest?

Post by Howard Donnelly » Sat Feb 24, 2018 4:14 pm

The Millionaire in You, by Michael LeBoeuf.

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Wildebeest
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Re: What books changed your outlook on how you should invest?

Post by Wildebeest » Sat Feb 24, 2018 8:21 pm

Taylor Larimore wrote:
Fri Feb 23, 2018 8:36 pm
Wildebeest wrote:
Fri Feb 23, 2018 8:31 pm
MotoTrojan wrote:
Fri Feb 23, 2018 8:22 pm
Most of the ones I have read had similar themes, but Random Walk Down Wallstreet resonated the most for me.
I loved a "Random walk down Wall Street". A great book. It would have been even a greater book if we never heard of Malkiel again and I had not read "The (Mis) behavior of markets" by Benoit Mandelbroit.
Wkildebeest:

Can you tell us why the second book changed your mind ?

Thank you and best wishes.

Taylor
Hi Taylor,

I thought that a random walk meant the stock market would go up and up if I would have the nerve and stay in the market and stick it out. I had not considered that a fat tail/ black swan may/ will occur in my life time till I read Mandelbrot.


Best wishes

Wildebeest
The Golden Rule: One should treat others as one would like others to treat oneself.

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Wildebeest
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Re: What books changed your outlook on how you should invest?

Post by Wildebeest » Sat Feb 24, 2018 8:55 pm

bobcat2 wrote:
Sat Feb 24, 2018 9:56 am
Before I started investing an article about investing greatly influenced how I would invest. It was a column in Newsweek by economist Paul Samuelson in the summer of 1976 on how the small mutual fund company Vanguard would soon by introducing the first retail index stock mutual fund.

By the time I was investing for myself and my parents in the early 1980s I had both portfolios partially invested in Vanguard's index stock fund and my investing was guided by Burton Malkiel's A Random Walk Down Wall Street. The book that later significantly changed my perspective on saving and investing was Worry-Free Investing by Zvi Bodie and Michael Clowes.
Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
The current book that changed my perspective is "Fooled by randomness" by Nassim Taleb.
For someone whose perspective was changed by Fooled by Randomness I suggest gaining alternative perspectives on investing by further reading from the following list. :wink:

Pensionize Your Nest Egg - Milevsky et al.
Risk Less and Prosper - Bodie et al.
Spend til the End - Kotlikoff et al.
Worry-Free Investing - Bodie et al.
Retirement Portfolios - Zwecher (Somewhat more advanced than the above books, but little math.)

Strategic Financial Planning over the Lifecycle - Charupat et al.
Also somewhat more advanced than first four books on list. Can be used as advanced undergrad text. There is some advanced math but it is limited to two chapters, which can be skipped with little lost except deeper mathematical understanding of material.

Personal Life-Cycle Economics - Stevens
Undergrad textbook that applies life-cycle economics to your personal situation. Math is kept to a minimum and there is no advanced math.

Financial Economics - Merton et al. (or its first and cheaper edition) Finance - Merton et al.
Excellent undergraduate textbook on finance. I have over 100 books on finance and investing. Most of the time I rely on this one book rather than any of the others when needing help with personal financial problems. Well-written with little math involved other than TVM problem solving, but you do have to do some hard thinking, which is never a bad thing IMO.

BobK
My parents only had bonds and did very well through the fifties, sixties, seventies and eighties. They were very suspicious of the stock market and associated costs and there was no John C Bogle Vanguard index funds where we lived.

I am sold on life cycle economics but did not think it would apply to me. After reading Mandlebrot and Taleb I realize how at risk we are. And I better plan accordingly.

Thanks for the reading list. I am half way through "Enlightenment Now" by Steven Pinker ( Great so far) and I still have Nate Silver's " The signal and the noise why so many predicitions fail, but some don't" to read but I will order Merton " Financial economics" next .

Wildebeest
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cfs
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Re: What books changed your outlook on how you should invest?

Post by cfs » Sat Feb 24, 2018 9:08 pm

Bogle on Mutual Funds. Read that book about 20 times. Had it on bunk during several deployments, finally gave it to one of my junior Sailors just before I left my warship on retirement. Gracias por leer / cfs
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Taylor Larimore
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Re: What books changed your outlook on how you should invest?

Post by Taylor Larimore » Sat Feb 24, 2018 10:02 pm

Wildebeest:

Thank you for your reply.

Best wishes.
Taylor
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220volt
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Re: What books changed your outlook on how you should invest?

Post by 220volt » Sat Feb 24, 2018 10:43 pm

More different investing books I read, less I'm sure about my strategy and more I want to fiddle with my investments. Value vs growth investing, Index investing. dividend investing and just goes on and on. Maybe I should just pick one strategy and read only books that reinforce that particular area. Not sure how else to avoid the influence of mental anchoring that a well-written book will have on me.
"If I had only followed the advice of financial analysts in 2008, I'd have a million dollars today, provided I started with a hundred million dollars" - Jon Stewart

MrPotatoHead
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Re: What books changed your outlook on how you should invest?

Post by MrPotatoHead » Sat Feb 24, 2018 11:30 pm

Two odd selections, both by Robert Ringer:

“Looking out for number one”.
“Winning by intimidation”

It took me a while to absorb the import of Ringer’s simple lesson, but it paid off over a lifetime by making me skeptical of the veracity of experts and also how to position myself in my own consultancy business for maximum effect.

With that foundation made, Andrew Tobais' “The Only Investment Guide You'll Ever Need” reinforced not only what Ringer stated but applied it to a wide range of financial matters while introducing new foundational principles.

Burton Malkiel's classic: “A Random Walk Down Wall Street” gave backing to Tobais guidance and explained the why.

Benhamin Graham’s classic “The Intelligent Investor”, it really set a solid foundation on what could be achieved, and to me was appropriate in the pre-etf and low cost index world.

A lifetime game changer for me was Vanita Van Caspel’s books, especially her classic: ”Money Dynamics for the New Economy”; her books motivated me to change my major’s in college to Finance and pursue a short lived career in the finance industry. Really at the time, Vanita Van Caspel’s works had very sound advice.

Frank Armstrong’s “The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio” In my opinion Armstrong essentially covers the same material as Swedroe, below, only in a more digestible manner. I would recommend this book as the best at explaining the tenets of modern portfolio theory to a general audience.

Larry Swedroe’s “The Only Guide to a Winning Investment Strategy You'll Ever Need”. I’ll contend this remains Larry’s best work.

For serious thought, there is Roger C. Gibson’s classic: “Asset Allocation: Balancing Financial Risk” , this book has enough meat to make it suitable for academic study.

I credit John Bogle’s masterpiece “Common Sense on Mutual Funds” for making me strongly question the merit of slice and dice presented in Armstrong and Swedroe’s works. I also like the honesty of Jack' s book and the ideas he puts forth, one on creating your own stock porfolio. And Bogle’s Telltale Chart still haunts my thinking. I seem to be coming home toward simplicity.

The other odd book that had a major effect was:

The Millionaire Next Door: The Surprising Secrets of Americas Wealthy
by Thomas J. Stanley Ph.D., William D. Danko Ph.D

At the time I had a plan I was executing, but my spouse was not in tune, did not care, or to a great extent was adverse to my plan. This book gave me the fortitude to ignore the peer pressure and spousal pressure and to stick to my plan. Without knowledge that others did not bear the trappings of wealth I may have succumbed. Today, 23 years after I wrote the plan we went from zero to some 75X expenses. I may not have gotten there if I did not realize that those around me simply had the trappings of wealth and no real financial resources to back their appearances.

Now I contemplate retirement, as a 50 something. My personal thanks to all the authors listed above. I truly have been honored to stand on the shoulders of giants.

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Re: What books changed your outlook on how you should invest?

Post by workerbeeengineer » Sun Feb 25, 2018 10:58 pm

Probably all mentioned already:

Don't Count on It! (Saint Jack)
Winning the Losers Game (Ellis)
Random Walk Down Wall Street (Malkiel)
Living Off Your Money (McClung)
The Millionaire Next Door (Stanley & Danko)
Unconventional Success (Swenson)
Smart Couples Finish Rich (Bach)
Get What's Yours (Revised) (Kotlikoff, Moeller, Solman)
Intelligent Investor (Graham & Dodd)

Finridge
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Re: What books changed your outlook on how you should invest?

Post by Finridge » Sun Feb 25, 2018 11:59 pm

iceport wrote:
Fri Feb 23, 2018 8:35 pm
Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
What book changed book your perspective on how to invest?
I have to give shared credit on this to Malkiel's A Random Walk Down Wall Street and Bernstein's The Four Pillars of Investing.
For me also, these two books, and in that order.

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Re: What books changed your outlook on how you should invest?

Post by smectym » Mon Feb 26, 2018 12:56 am

At The Crest of the Tidal Wave, by Robert Prechter (1996). Subtitled “ A Forecast For the Great Bear Market”

Denser and more thoughtful than his subsequent, opportunistic “Conquer the Crash” (rushed into print in the wake of the dot.com implosion), “Tidal Wave” is full of interesting insights. Prechter’s robust defense of cash as an asset class resonates again today. You can take Elliott Wave or (like me) leave it alone: this is a forgotten (or perhaps, never remembered? Am I the only guy who bought this book?) classic.

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Re: What books changed your outlook on how you should invest?

Post by gd » Mon Feb 26, 2018 5:11 am

Formed more than changed: Bendat & Piersol, "Random Data", and a few other Probability and Statistics & Pattern Recognition texts revealing to me the remarkable ability of the human brain to perceive patterns in anything. Honorable mention to "Your Money or Your Life", presenting the idea of a frugal life funded by very safe income investments. Dishonorable mention to Morgan Stanley's research reports, in which I could never find continuity from one edition's recommendations to the next. A classic renewal process (see #1).

On the second, the idea of a government bond ladder didn't hold up, sadly, nor did the movement as such. It was presented as "simple living", but is anything but. I wandered off when it was overrun by housing bubble people, drowning in home equity debt, claiming the revelation that true simplicity was eating out in restaurants and paying someone to clean your house (didn't work...). I suppose Mr. Money Mustache is the movement descendant.

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Re: What books changed your outlook on how you should invest?

Post by longinvest » Mon Feb 26, 2018 8:33 am

Here's a list of four writings which had a deep impact on my investing approach:
  • The Arithmetic of Active Management by William F. Sharpe (short article): This article, written in clear simple words, provides the mathematical foundation of market-cap index investing.
  • The Four Pillars of Investing by William Bernstein: This books provides a comprehensive mental framework for investing, covering the theory, the history, the psychology, and the business of investing.
  • The Great Depression: A Diary by Benjamin Roth: This books is a personal diary written by a young lawyer during the great depression. It reveals surprising investment risks that are almost never considered by investors.
  • Risk Less and Prosper by Zvi Bodie: This book presents a different approach to investing. Its goal-based approach guarantees that one's minimal financial objectives will be met regardless of future stock and bond market performance. It completely departs from the conventional probabilistic approach to investing.
Last edited by longinvest on Tue Feb 27, 2018 9:19 am, edited 1 time in total.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international) stocks / (nominal/inflation-indexed) long-term bonds | VCN/VXC/VLB/ZRR

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iceport
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Re: What books changed your outlook on how you should invest?

Post by iceport » Mon Feb 26, 2018 8:49 am

Finridge wrote:
Sun Feb 25, 2018 11:59 pm
iceport wrote:
Fri Feb 23, 2018 8:35 pm
Wildebeest wrote:
Fri Feb 23, 2018 8:17 pm
What book changed book your perspective on how to invest?
I have to give shared credit on this to Malkiel's A Random Walk Down Wall Street and Bernstein's The Four Pillars of Investing.
For me also, these two books, and in that order.
That was the order for me, too. The only prior personal finance book I read was Jonathan Clements' You've Lost It, Now What?, which I thoroughly enjoyed and pointed me in the right direction. But it served more to whet my appetite than to provide the same sort of investing-life-changing revelations of the next two classics.
"Discipline matters more than allocation.” ─William Bernstein

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Re: What books changed your outlook on how you should invest?

Post by LateStarter1975 » Mon Feb 26, 2018 2:20 pm

I've read >100 books on investing. By far the greatest impact on me was "The Boglehead's Guide on Investing"
Debt is dangerous...simple is beautiful

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Re: What books changed your outlook on how you should invest?

Post by SGM » Tue Feb 27, 2018 8:56 am

Many of the books previously mentioned have had an impact on how I invest. Two of the larger issues when approaching retirement and after 2010 included when to take SS and the how and why of Roth conversions. Regarding those specific issues I was influenced most by Kotlikoff's book on Social Security and James Lange's book The Roth Revolution.


My research was not just confined to books however. I read many blogs and newspaper articles on various aspects of retirement planning. Among my favorite financial authors are Jack Bogle and Bill Bernstein. The Boglehead guides are excellent. I agree with Mike Piper that you can read too much about finances. I find there are too many good arguments on both sides of an issue.

I have a good plan, not the perfect plan.

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Re: What books changed your outlook on how you should invest?

Post by asif408 » Tue Feb 27, 2018 9:15 am

The book that changed my outlook the most was "A Random Walk Down Wall Street". I wouldn't even say it is my favorite investing book now, but it was one of the first investing books I read (actually listened to on audio book) that drew me in, because at the time I didn't know or have much interest in investing. It has a broader appeal than most investment books, IMO, and has plenty of anecdotes and jokes, as well as storytelling aspects which make it less dry than many others. I just found it to really set the foundation for the important aspects of investing that I keep in mind today, e.g., keeping costs low, diversifying, and sticking to primarily index funds. Looking back, I can find things I don't agree with, but the big lessons I learned from that book are good. I've suggested this book to people that are somewhat interested but not very interested to get started learning, as I think the writing of other investment authors would not have as broad an appeal to those without an interest.

Bill Bernstein's "Four Pillars" book is second on my list, because it really guided me on how and where to educate myself about the four pillars (theory, history, psychology, & business). Since then, I've found other books from Bill Bernstein, along with books such as "Devil Take the Hindmost" by Edward Chancellor, to have provided additional historical perspective about what markets are capable of.

I spent a lot of time learning 3 of the four pillars (theory, history, & business), and feel like I've covered most of those areas, so I'm now reading lots of behavior finance books and literature.

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Re: What books changed your outlook on how you should invest?

Post by lt1948 » Tue Feb 27, 2018 9:17 am

The Intelligent Investor, by Benjamin Graham

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Oak&Elm
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Re: What books changed your outlook on how you should invest?

Post by Oak&Elm » Tue Feb 27, 2018 10:17 am

I love to go to my public library and I very often select financial books, I think I have read just about every book mentioned in this thread. Let me add my favorite which I have given to each of my 4 adult age children;

Millionaire Teacher by Andrew Hallam, this book not only explains the basics of a simple 3 fund portfolio it tells you how to "find" the money in your everyday budget to invest.

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