Just in time for World Book Day, we’ve put together a list of our favourite books about finance. We can’t guarantee that reading them will make you any wealthier, but if you’re looking for something entertaining, insightful or provocative about he world of finance, these 10 pecuniary page-turners are a great place to start:
|Lords of Finance: The Bankers Who Broke the World
(Reviewed by Alyssa Ford)
Ahamed’s financial analysis of the inter-war years is a fascinating insight into the decisions of individuals that led to the Great Depression, and whether this crippling downturn could have been avoided. Alternative paths are explored, against chilling political developments, as central bankers grappled with the complexities of the gold standard, the hefty costs of the First World War and uncontrollable market sentiment. In the shadow of the ‘credit crisis’, investigating the financial steps and consequences of one of the most formative periods in recent history is as poignant as it is valuable.
|Flash Boys: Cracking the Money Code
(Reviewed by Niels Footman)
So there’s this cable running from Chicago to New Jersey, and it was really difficult and costly to build, and the banks using it get a four millisecond advantage when trading. If that sounds like the synopsis to a singularly dull and impenetrable story, prepare for a shock. Perhaps the most surprising thing about Flash Boys is just how hard it is to put down. In this story of high-frequency trading and its infinitesimally small time margins, Michael Lewis has created a thriller for the dark-pool age, whose main protagonist – a specialist in electronic sales and trading – goes through a character arc worthy of a blockbuster. Though some of Lewis’ analysis has come under question, Flash Boys makes the complex understandable and fizzes with tension throughout.
|Love Is Not Enough: A Smart Woman’s Guide to Making (and Keeping) Money
Merryn Somerset Webb
(Reviewed by Carmen Reid)
With its pink cover and high heels, this book was designed for women, and it’s packed with excellent female financial advice from asking for a raise, to funding career breaks, to not relying on Mr Perfect to feather your nest. Investing is totally demystified here as Merryn explains why women are good at it and why a pension is an excellent thing. For spendaholics who claim they’ve no money left to save, Merryn has stern words about designer clothes, handbags and beauticians. ‘Paint your own nails,’ she declares, ‘it really isn’t that difficult.’
|The Principles of Corporate Finance
Richard A Brealey and Stewart C. Myers
(Reviewed by Mae Igoli)
During my time at university, my finance modules were mostly based on this book. I studied financial calculations such as the Black-Scholes option pricing model. which is a very complex mathematical formula for financial instruments. After winning a Nobel prize for its founders, this model is blamed by many for crashing the financial markets. I also learned that a few powerful individuals could cause the next financial crisis and that Wall Street is certainly not a place for the faint hearted.
|More Money than God: Hedge Funds and the Making of a New Elite
(Reviewed by Duncan Black)
From quantitative analysis to instinct, intuition or simply ‘intensity’, this history of hedge funds shows that different managers attribute their success to different methods – whether that means placing one’s faith in algorithms, getting up at 3am, smoking two cigarettes at once, or ordering the same lunch every day. It’s also an excellent primer on hedging tactics and how they work – or don’t.
|On the Brink: Inside the Race to Stop the Collapse of the Global Financial System
(Reviewed by Mike McNaught-Davis)
Of the many books about the global financial crisis, this one is surprisingly entertaining. Compelling and succinctly written, it faithfully takes the reader through the crisis as it unfolded. Paulson has a gift for re-creating the pervading and almost surreal ‘end of days’ atmosphere of that time. And what do we learn? That the authorities’ response was made up on the hoof (but somehow worked), that Paulson often reverted to prayer before key meetings, and that he imbibed Diet Coke excessively!
|Black Swan: The Impact of the Highly Improbable
Nassim Nicholas Taleb
(Reviewed by Joanna Murphy)
I first read this book in 2008, shortly after the financial crisis struck. At that time, its central premise, that unpredictable and random phenomena, or ‘Black Swans’, are the true agents of our lives, did not strike me as particularly radical. I was wrong. For me, the joy of this book is the scale of the author’s ambition in expounding and defending this compelling idea, and the breadth of historical, philosophical and economic subject matter he draws upon in discussing its implications – and our inability as humans to fully grasp it.
|The Smartest Guys in the Room: the Amazing Rise and Scandalous Fall of Enron
Bethany Mclean and Peter Elkind
(Reviewed by Vered Zimmerman)
For a time, I loved reading books on financial crashes. The Smartest Guys in the Room, tracing the rise and fall of energy giant Enron, was by far my favourite. I found the detailed explanations of ‘“creative accounting’ practices so captivating that for several months afterwards, I read nothing but accounting-fraud books.
|The Age of Turbulence
(Reviewed by Kathryn Robertson)
The former Chairman of the Federal Reserve charts his rise from an economic statistician to one of the most influential policymakers of recent years. As well as being an interesting autobiography, it’s a good primer on modern financial history. It provides a great insight into government interaction with the Fed, and how that relationship can become fraught. His insider’s account of various presidencies, including those of Ronald Reagan, George Bush (senior) and Bill Clinton, is fascinating. Greenspan poses some interesting and prescient questions about the future of globalisation and the rise of populism. His book reminds us that no-one is infallible – even intelligent people with access to the best-quality data can’t foresee everything.
(Reviewed by Ross Hunter)
Some criticise this book for not being an exposé of Warren Buffett’s investment process. And that’s a fair point. The book does not detail the decision-making process by which Berkshire Hathaway whittles down the investment universe to 50 stocks. But what it does achieve is a unique insight into the philosophy of the Sage of Omaha. The one nugget that really stuck with me was the concept of ‘scuttlebutt’: it’s the idea of analysing a company by talking to its customers, suppliers, competitors, staff, shareholders (indeed, any stakeholders) in order to derive a more rounded picture of the stock and its value. So, is this tome worth a read? I’d say yes: if for nothing more than a peek inside the mind of one of the 20th century’s greatest investors.
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