I have to lead off with a few flying books, of course, but most of the books here relate to business, economics, or finance.
Most business books are, in my humble opinion, a waste of paper. But a few are worth having, particularly if they're insightful, a good reference book, or a good exciting business story. So here's a few of those. I'll start with the more general-interest business books before I get into the finance and reference stuff. After that, to lighten things up, some business gossip seemed in order! I'll also throw in a couple of general-reading recommendations at the end. (If you decide you'd like to buy one of the books, click on the cover art.)
Most business books are, in my humble opinion, a waste of paper. But a few are worth having, particularly if they're insightful, a good reference book, or a good exciting business story. So here's a few of those. I'll start with the more general-interest business books before I get into the finance and reference stuff. After that, to lighten things up, some business gossip seemed in order! I'll also throw in a couple of general-reading recommendations at the end. (If you decide you'd like to buy one of the books, click on the cover art.)
Flying
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The Hang Glider's Technical Notebook (Sheehy) - I couldn't very well NOT have my own book here, could I?
The definitive text on the technical aspects of hang gliding, long the biggest-selling hang gliding title in Amazon's Kindle store. Covering aerodynamics, stability and control, structure, performance and glide calculations (including performance in a turn), the physics of landing, slope and thermal soaring, the book translates aeronautical engineering into practical insights from a hang glider pilot's point of view. Not a training manual, this book does not teach flying techniques; it is for pilots who want more insight into what is happening when they fly. Available only in Kindle format. |
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The Fundamentals of Sailplane Design (Thomas) - Absolute engineer-pilot-geek-fest stuff! Even more obscure, by far, than my own work on hang glider engineering! Originally written in German, so you'll want to get the Judah Milgram translation.
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Cross Country Soaring (Reichmann) - Helmut Reichmann wrote his book (in German, so you'll want the English translation) before the arrival of electronic soaring computers. His theories have been refined considerably by such authors as John Cochrane (an economist at the University of Chicago, who rather unfairly has a whole suite of math at his disposal when analysing pilots' need to make decisions under uncertainty). The book is, frankly, harder to read than I'd like, but it is widely acknowledged as THE reference on how to fly sailplanes.
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Business
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Competitive Strategy (Porter) - A classic, in which Porter expounds at length around his famous 5-forces model. While it makes my must-read list, it isn't one of the easiest or most entertaining reads on there. I read it once, early in my business career, and loved it, but I confess I've barely opened it since. If the world of competitive business strategy is new to you, and you need to learn about it, read this book first.
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The Innovator's Dilemma (Christensen) - I could barely put this book down. Christensen has what I believe to be genuinely useful insights here on the question of why some small innovative companies seem to be immune to attack by giant competitors - and others not. The book may have been responsible for introducing the notion of "disruptive innovation" and that term is loosely used today, but Christensen gives it a clear and useful definition that's worth keeping in mind: a disruptive innovation is one that is useful enough to be a viable business, but - crucially - useless to the best customers of the incumbent industry leaders.
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Inside the Tornado (Moore) - Another excellent book. And that's in spite of the fact that Moore uses some of the worst, most mixed metaphors I've ever come across. Says something for the thinking behind the metaphors, I guess!
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The Art of M&A (Reed & Lajoux) - This is a brick of a book: just holding it in your hand will make you feel smart. Take the dust jacket off to get the really serious look! While it's a reference book, the early chapters aren't a bad casual read. Later chapters will be of interest only if they're of interest, if you know what I mean.
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Cash and tell
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Barbarians at the Gate (Burrough & Helyar) - Perhaps the classic business gossip book, the story of the LBO of RJR/Nabisco. I used to have a copy: wonder what happened to it?
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The Smartest Guys in the Room (McLean & Elkind) - The subtitle is more informative: "The Amazing Rise and Scandalous Fall of Enron". Come on, aren't you dying to know what really happened? Lots of personality stuff here, a bit thin on the details of some of the transactions though (afraid of losing the readers?)
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When Genius Failed (Lowenstein) - Another rise & fall book - "The Rise and Fall of Long-Term Capital Management." LTCM had Nobel Laureates on the management team, and became one of the most spectacular blow-ups in trading history (how embarrassing is that?). For all of us who said "how on earth could that happen?" - this is how. Or at least, it's one version of it. Good bedtime story if you're a mega-money voyeur!
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Liar's Poker (Lewis) - A memoir of a bond trader at Salomon Brothers in the 1980s. A mixture of journalism, autobiography and gossip, it's a concoction with a humorous flavor but that leaves a bitter aftertaste. Which, clearly, was Lewis' intent.
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High Stakes, No Prisoners (Ferguson) - Ferguson and his team developed the first version of what became FrontPage and their company was bought by Microsoft. This is a dirt-dishing tale of gloves-off, no-holds-barred value-grabbing in the early days of the Internet. It was more fun to read when I knew less about startups - now it makes me cringe!
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Investment
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The Intelligent Asset Allocator (Bernstein) - No relation to Sanford Bernstein, this is William Bernstein, a neurologist who took up the study of investment management on the side and has written a pretty solid, readable, informed book on the subject. He even has a website where you can get into fairly deep stuff and get software that will calculate where the efficient frontier was over the last few years, given security performance data. The book itself avoids esoterica, so if you're into finance, you won't find anything much here you haven't heard before, but he covers the ground fairly thoroughly. I know I'll want to read it again
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A Random Walk down Wall Street (Malkiel) - This classic is, of course, practically the efficient market theorist's manifesto. Entertaining, if you're interested in investments, and yet distressing as it reviews all the many creative ways in which you can fail to beat the market. Not ideal stuff for unwinding, but not at all a bad use of a wet Saturday
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The New Finance (Haugen) - This book probably gives fits to efficient market theorists, because Haugen basically asserts that the market is no such thing. And gives examples. No, please don't drag me into this, I'm just reporting what's in the book!
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Value Investing (Greenwald, Kahn, Sonkin, van Biema) - The most satisfying book I've read on value investing, it presents an interesting and useful - but not necessarily better - way to think about valuation. Books on value investing tend to either present statistical evidence that value investing "works in the long run" (low P/E, low P/B stocks outperform), or give largely outdated advice on buying stocks that are high quality and demonstrably deeply undervalued - and rarely found today (sorry, Graham & Dodd fans). Greenwald's approach is distinctive, building valuation in layers of increasing uncertainty - but in the end he avoids the uncertainties of earnings forecasting and terminal valuation by replacing them with a host of new estimation problems! So, an interesting way to think about valuation, but not a quick fix to anyone's frustrations with DCF!
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Fooled by Randomness (Taleb) - Taleb has written an entertaining book here, in which he uses an array of fictional and historical characters to look at the role of chance in the markets. There's quite a bit of overlap with Paulos, but in a very different style. Underlying Taleb's entertaining tales is the issue of "fat tails" and the fact that people consistently underestimate the probability of highly unlikely market events (which he refers to as "black swans") - a fact that he used to his advantage when trading. You can frighten yourself thinking about this stuff, or just sit back and enjoy a good read! (Unfortunately, Taleb's follow-up,The Black Swan, didn't do much for me, and I would recommend sticking with the first book.)
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Reference
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Valuation (McKinsey / Koller et al.) - This is a reference book, not really something you'll want to read for entertainment, but every office at McKinsey seemed to have a copy in my day! The book is solidly on mainstream intellectual ground in its insistence that valuation should be based on discounted cash flows. Certainly, many people have doubts about whether DCF analysis is an especially practical tool, as it tends to involve either a) projecting results too far into the future for comfort or b) tremendous sensitivity to the assumptions for the terminal value calculation (which really amounts to the same thing). Basically, the concern is that it's too easy to "justify" almost any half-reasonable price with a DCF analysis. However, even if DCF is a touchy thing, the authors offer a wealth of evidence that either DCF or - perhaps more useful - its drivers, are indeed relevant to managers seeking to increase the value of the companies they run. Since DCF is a (the?) major valuation technique, everyone should have a book on the subject, and this is the McKinsey bible on it.
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Modern Investment Theory (Haugen) - Unlike "The New Finance" this book isn't (or shouldn't be) controversial. It's a textbook and it presents Modern Finance Theory for introductory graduate level students. It's aimed at aspiring investment professionals rather than corporate finance management. Quite readable.
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Fixed Income Mathematics (Fabozzi) - This is one of several titles on fixed income securities by Fabozzi: the biggest of them is not this one, but the Handbook of Fixed Income Securities. For my money, this one is better: it's easier to carry and goes right to the details. Easier than Wilmott, but that's partly because it tends to punt on the more difficult stuff. Definitely a reference book, not something to take on vacation!
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The Entrepreneur's Guide to Business Law (Bagley & Dauchy) - For a reference work, this one is highly readable. It takes you through the legal issues at each stage of entrepreneurship, from leaving your employer to structuring a business entity to raising money, forming a Board, writing contracts, etc. The style is easy to read, and there are examples "from the trenches." It's not a big book, so there isn't much depth on most topics, but it can act as a starting point for when and why to involve an attorney.
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All About Hedge Funds (Jaeger) - This isn't what I'd consider a great book, as such, but it's as good an introduction as any I've read to hedge funds and what they're all about. It has a point of view on why hedge fund managers claim they can beat the major indices (and there's evidence that, in mean-variance space, they can, although that doesn't necessarily mean what they'd like you to think it means); the basic tools of leverage and hedging they use; the strategies they use, and how they're organized. Interesting, but not something that's going to hold your attention unless you actually want to know.
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Variety...
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Godel, Escher, Bach (Hofstadter) - This is a beautiful, interesting, entertaining, virtually incomprehensible book. Hofstadter may well be the mathematicians' answer to Pirsig. He ties art, music and mathematics together in his "eternal golden braid" and it's hard to put the book down at times. When you do, you realize you have no idea what he's talking about! I've half-read it twice and gotten through it once (it's not easy), always enjoyed it, and I think I actually understood it the last time!
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The Code Book (Singh) - This is a book that manages to make cryptography, of all things, really interesting - it even manages a fair bit of human interest (and after all, what are secrets without people?). At the end, I even felt I had some insight into public-key encryption (although at the last minute he does get evasive about the details). If you have a secretive (or geeky) side to you, you'll enjoy it.
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The Ancestor's Tale (Dawkins) - I'm not much for biology, never could quite get a handle on it, but this book gripped me. Dawkins follows evolution, but tracks it backward, starting with the present day and describing the science behind finding the common ancestors (he calls them "concestors") we share with other animals, plants, fungi, amoebae, bacteria, and classes of life I didn't know existed. Along the way, he stops off to describe all sorts of creatures, the way they live, how we're related to them and how we know that. Fascinating - a bit too long, but I'm dying to see the TV series (there isn't one - maybe I should call PBS...).
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Declaration of Independence and the Constitution of the United States of America (Jefferson et al) - Subversive and controversial stuff when it was written, and arguably it still is! It's surprisingly short, just a few small pages really, and you can actually get a pocket edition from the Cato Institute (doubly useful for one-upping your friends during a political debate: you'll stop 'em dead in their tracks when you whip out your pocket Constitution!) I don't actually carry it around with me, but it is amazing that something so important could be so small!
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The Laws of our Fathers (Turow) - Turow writes courtroom thrillers, which I have found well worth settling down with. The people are flawed, the evidence sketchy, the resolution of the legal cases generally a mess! For those who like these kinds of books, worth checking out.
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The First Man in Rome (McCullough) - This is the first of a series of 5 historical novels about ancient Rome. The author is Colleen McCullough of "The Thornbirds" fame. These books are quite different: while McCullough naturally colors the story to keep it "interesting," the facts are thoroughly researched: in fact she includes 139 pages of notes and references at the end! The 5 books cover the end of the Roman Republic and the beginning of the Roman Empire, a fascinating period that challenges our natural assumption that Democracy is here to stay, and quite an exciting story too. One caveat: the books are quite confusing to read at first, because there were only about 10 common first names for aristocratic Roman men at the time, and the women were all known by their family names (any woman from the Julian family was called Julia). Still, worth the effort, but tackle the first few hundred pages over a reasonably short time, or you'll get hopelessly confused!
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