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Essential Books for the Successful Investor

Essential Books for the Successful Investor

As always, tread carefully if you're getting your ideas on investing and economics from the media. I believe well-written, well-researched books (and professional articles) are considerably more valuable when attempting to understand something as diverse, dynamic, and complicated as the panoply of trends and entrepreneurial ideas that weave their way through the world economy propelling us to ever-increasing standards of living.

Any information provided is for informational purposes only and does not constitute a recommendation.  Raymond James is not affiliated with and does not endorse the opinions or services of these authors.   

Essential Books for the Successful Investor

I have followed professor Siegel for many years. His classic, Stocks for the Long Run is now in its Fifth Edition. His insights, logic, and rigorous academic research are as strong as ever. If anyone has ever written the “bible” on stock investing, this is it. And it’s written in a way that every investor can understand. This book is a comprehensive, outstanding treatise for every serious equity investor.

If you want a history of what led to our recent energy boom, then this book is for you. In general, I am suspicious of financial journalism and media, but Russell Gold did a terrific job. He is a Washington Times reporter, who has covered the energy industry for a about a dozen years. His parents live in oil-rich Pennsylvania and had to make the difficult decision of whether to allow their land to be “fracked” for oil and gas. This is a fascinating tale that includes plenty of history and, more importantly, a balanced discussion on a topic that tends to cause hyperbolic shrieking that crowds out reasoned, balanced discussion. Fracking actually goes back to the Civil War – torpedoes from the era were dropped into old gas wells. Over 40 years ago, the United States government – in what was clearly a misguided venture - detonated three nuclear weapons in the western U.S. trying to frack for oil and gas. What the frack was that all about? Anyhow, this is a fantastic book if you would like to get more informed on the U.S. energy megatrend.

For me, this book represents everything that’s going right with the world, and then some. You cannot read this book and come away with a pessimistic sense of the future. If you’re a chronic pessimist, you probably won’t be able to finish this book…it would destroy your sense of self and the all the reasons you like to complain.

Mr. Murray is another author and speaker I have for many years. I’ve always enjoyed his no-nonsense approach to investing. He is a former financial advisor who has influenced my thinking as much as anyone. He is unabashedly pro-equities. According to Mr. Murray, the most important reason people don’t reach their financial goals – with or without stocks - is because they don’t have the proper psychological approach to investing. This book is in its fifth edition, and it’s as good as ever. If you want a complimentary copy, I keep them in my office and would be glad to give one to you.

This is an outstanding and very interesting book on where science and physics will take us in the future. Enormous breakthroughs are happening and will propel society into an ever more Star Trek type environment. Mr. Kaku is not a Harry Dent-like demographer, rather he’s a professor of theoretical physics at City University of New York and hosts two radio programs. This book might even give your teenager or young adult child ideas on career choices.

I can’t say that I truly understood how instrumental Fannie and Freddie Mac were to the housing bubble and subsequent 2008 financial crisis until I read this book. Chronologically, it was political pressure that originated back in the 1970s, took shape in the 1990s, and was full-blown in the early 2000s that allowed Fannie and Freddie Mac to take outsized, enormous market risks. Politicians of any political party will always be tempted to start a program to get votes, and this was an ugly, sordid tale of political, economic cronyism that should cause every American to consider government’s proper role in markets. To be sure, Wall Street piled on at the end and blew the top off of things, and we ended up with an economic event that will be studied for decades.

If you want an unapologetic, politically incorrect view of why western civilization has prevailed on planet earth, then this book is for you. I must have slept through some of my western civilization studies in high school – or a lot of history was left out in school. This book starts out with the Greeks and works forward by discussing the major trends, inventions, ideas, cultures, and philosophies that catapulted the West to higher standards of living. I picked up new insights on the role the Church played during the last 1,000 years in fostering creativity and inventions by rigorously focusing on rational thought. Fast forward to today, and one can understand how, from an economic perspective, the West is culturally suited to economic success and ever-increasing standards of living. The other insight – or should I say reminder – was the brutality of war throughout the centuries. But like now, the West prevailed due to interesting technological advances and breakthroughs that evolved over the centuries.

This book is a fascinating read on how early colonial America transitioned from a fairly intolerant religious nation to a more tolerant religious nation by strictly separating church and state – something that the evangelicals wanted back then because they felt that government diluted – or perhaps polluted – religion. Plus, the leaders at the time did not want one dominant religion in America similar to what had happened in European nations. James Madison played the central role in this drama, and he and others saw how a cozy relationship between government and religion did not work out well in Europe. What does this book have to do with economics and investing? Probably everything. A more tolerant religious nation that kept government and religion separate and “pure” (the dominant view back then) led to more integrity in both government and the various religions that fostered a less corrupt culture. It also led to more ways to conduct commerce amongst groups of people with diverse religious backgrounds. Religious tolerance is yet another fascinating reason why the U.S. is uniquely positioned as a world economic leader.