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Books on Investments

To purchase any of these books, just click on the title. Via the miracle of cyberspace, you will be transported to Amazon's cyberstore for a more detailed description of the book and instructions for purchase.

Most of these books are the basis for my investment philosophy. "So what?" you say. I haven't had a real job since 87.

Freakonomics : A Rogue Economist Explores the Hidden Side of Everything (Roughcut) by Steven D. Levitt, Stephen J. Dubner - about $15. William Garrett posted this on Amazon: Steven Levitt explodes the prevailing wisdom on a host of modern social questions and reaches fascinating conclusions by applying a simple formula: insightful questions + rigorous methods + data = startling new understanding. This approach may seem revolutionary but it's just the basic Scientific Method. The fact that it seems like a breakthrough says much less about Levitt's genius than about the sorry state of affairs today in the so-called social sciences. But hooray for Levitt for showing the power thoughtful discipline has to shed light on seemingly intractable issues.

What does all this have to do with investing? Basically, much of the prevailing wisdom is bunk. Most mutual funds don't beat the DJIA or S&P 500 average and much of the reason is that they overthink the problem spending lots of money on that overthinking and on the perpetual trading that it causes. Buy a good stock, hold it, sleep well at night.

The Intelligent Investor : A Book of Practical Counsel by Benjamin Graham, Warren E. Buffett (Designer) - Amazon sells this for $21 and you should have it if you are investing. Buffet has made more money for more people than anyone in this business. My condo in St Maarten owes at least half of its existence to my purchase of Berkshire-Hathaway stock at prices below $4000 a share (currently around $70,000). Nothing fancy, no get rich quick schemes, just good solid advice, originally from Graham (Buffet's mentor) and now with comments from Buffet.

Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies by Jeremy J. Siegel - Another book for about $21. In summing up his approach to investing, Siegel writes, "Poor investment strategy, whether it is for lack of diversification, pursuing hot stocks, or attempting to time the market, often stems from the investor's belief that it is necessary to beat the market to do well in the market. Nothing is further from the truth. The principle of this book is that through time the after-inflation returns on a well-diversified portfolio of common stocks have not only exceeded that of fixed income assets but have actually done so with less risk. Which stocks you own is secondary to whether you own stocks, especially if you maintain a balanced portfolio."

Contrarian Investment Strategies : The Next Generation : Beat the Market by Going Against the Crowd by David N. Dreman - Dreman is a Forbes columnist and I appreciate him only as someone who has watched $25000 invested in Fleet Financial grow to $80,000 in eight years. It is now paying an 8% dividend yield on my original investment. Dreman pays only cursory attention to a company's business fundamentals in deciding whether to invest in it. Instead he looks for stocks trading at below-market multiples of per-share earnings, cash flow, book value, or dividend yield. Historically, Dreman claims, stocks that are cheap by any of these measures have tended to outperform the market average, although this is disputed by those who believe the stock market is efficient and therefore impossible to beat except by accident. Dreman devotes many pages to debunking their research. He offers a new refinement of his low-price strategy, which involves picking the cheapest stocks within industries, to create a diversified, contrarian portfolio.

Reminiscences of a Stock Operator by Edwin Lefevre - Only $14. This is the thinly disguised biography of Jesse Livermore, a remarkable character who first started speculating in New England bucket shops at the turn of the century. Livermore, who was banned from these shady operations because of his winning ways, soon moved to Wall Street where he made and lost his fortune several times over. What makes this book so valuable are the observations that Lefèvre records about investing, speculating, and the nature of the market itself. For example: "It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon." Note that this link comes up blank as it is out of print. Enter the title and it usually pops up as a used book.

Where Are the Customer's Yachts?, Or, a Good Hard Look at Wall Street by Fred Schwed, Illustrated by Peter Arno - $13.56 - Humor for the Intelligent! If you are tired of so much seriousness as everyone discusses Wall St., you have got to read this book. Do it now! Before you send another check for investing your to your broker (or your brother-in-law). Very quick to read, the author keeps a quick pace as he jabs at everyone associated with "The Street"

Cover   Small Is Beautiful: Economics as if People Mattered by E. F. Schumacher - about $11. Wikipedia says that the book is a collection of essays by British economist E. F. Schumacher. The phrase "Small Is Beautiful" came from a phrase by his teacher Leopold Kohr. It is often used to champion small, appropriate technologies that are believed to empower people more, in contrast with phrases such as "bigger is better". First published in 1973, Small Is Beautiful brought Schumacher's critiques of Western economics to a wider audience during the 1973 energy crisis and emergence of globalization. The Times Literary Supplement ranked Small Is Beautiful among the 100 most influential books published since World War II. A further edition with commentaries was published in 1999. Small Is Beautiful received the prestigious award Prix Européen de l'Essai Charles Veillon in 1976.