Well, it’s nearly May and as everyone in Chicago knows, brutal winters finally come to an end (although this one was relatively mild), the grass greens up and the trees begin to sprout their foliage. As people plan their summer vacations and other outdoor activities, I look forward to settling down with a good book along the lakefront, or at the ocean front in Southern California. Readers and friends have asked for book suggestions—sort of a summer reading list—to help them get a better handle on investing and on healthcare/medicine in general. For me, it was books that opened the door that allowed me to transition from molecular biology to the world of high finance…
In one of my job interviews for a position in the financial markets, the interviewer remarked “Hmmm…University of Chicago MBA; you went to the right school!” I prompted him to take a closer look, as I had a BA – not an MBA. He then noticed I had a BA not in Business but in Molecular Biology and was puzzled that I was quite conversant in matters regarding world financial markets. He wanted to know how I obtained the equivalent of an MBA without the formal training. I had to be honest and told him I was self-taught – I buried myself in the library and learned a new career by reading as much as I could.
Moreover, the financial markets, in my opinion, are the best teacher you can have. You can read about investing via annual reports, financial research, books and magazines. You can take classes and ask questions of brokers and financial advisors. But in all honesty, nothing cuts to the heart of business education like investing your hard earned capital in the markets.
The list that follows is part of the journey I took to gain the knowledge to invest and subsequently work in the financial markets. After 25 years studying the markets I am still learning. I encourage all of you to NEVER STOP LEARNING. Some of these books are legendary and on everyone’s must-read list. Others have nothing to do with investing, but will educate you on items like the Affordable Care Act or other intriguing topics in the healthcare / pharmaceutical field. We trust you find this a beneficial list of highly educational and interesting books. This week’s focus is investing; another list provides titles on healthcare topics.
First, any serious discussion of investing must include Warren Buffett. He is the most successful investor of the last 100 years and one of the great capital allocators of our time. There are at least two dozen books on Buffett. These four are the best in my opinion.
Buffett: The Making of an American Capitalist by Roger Lowenstein
The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
Of Permanent Value: The Story of Warren Buffett by Andrew Kilpatrick
The Essays of Warren Buffett: Lessons for Corporate America by Lawrence Cunningham.
The books by Lowenstein and Schroeder are the seminal works on Buffett.
A Random Walk Down Wall Street by Burton G. Malkiel
A terrific read about efficient markets. This book helped give rise to the passive investment strategy movement known as indexing. Instead of trying to beat the market as measured by the S&P 500, “join” it by buying the entire index. Index funds and ETFs allow one to do this for virtually no cost. And the kicker, over the long run you will beat many professional investors.
Stocks for the Long Run by Jeremy J. Siegel
Great book by Wharton Professor Jeremy Siegel about merits of a longer term investment plan. Great detail with statistics and charts by a professor that is highly regarded.
One Up on Wall Street by Peter Lynch and John Rothchild
One of the greats, Peter Lynch who ran the famed Fidelity Magellan fund to one of the best track records in active management (active management is stock picking-or trying to beat the maket-as opposed to passive management, which buys an entire index such as the S&P 500). His mantra: Invest in what you know. And don’t just buy a company’s products, perhaps you should invest in the stock. Lynch also wrote a sequel to this book called Beating the Street, also with John Rothchild.
The Intelligent Investor by Benjamin Graham
A classic for fundamental-based investing and Warren Buffett’s favorite book.
The Money Masters by John Train
A classic book that highlights nine great investors. It was this book that turned me on to Warren Buffett. Of the success I enjoyed as an investor, I would have to say that Buffett’s teachings have had the most influence on me. In fact, my net worth would be considerably less without him since I have coat-tailed many of his investments. The book also talks about Larry Tisch, Paul Cabot, Philip Fisher, Ben Graham, John Templeton, T. Rowe Price and a few others. Read it!
How To Buy Stocks by Louis Engle and Brendan Boyd
For the beginner. As a biochemist/molecular biologist right out of the University of Chicago, I went from poor college student to a nice salaried job. I wanted to learn how to invest and it was this book that taught me the basics.
John Bogle on Investing—The First 50 Years by John Bogle
From the founder of the Vanguard Group. They laughed at him when he suggested starting the first index fund in the 1970s. The Vanguard 500 Index fund went on to be a huge success and beat the majority of money managers over that time span. Bogle’s mantra: COSTS MATTER!! His book is a treasure trove of information for investors of all levels.
Investment Biker by Jim Rogers
I love this book partly because I rode motorcycles as long as Jim has and partly because Jim Rogers is one of the smartest guys in the world when it comes to investing. He and George Soros ran one of the most successful hedge funds in the world and had a track record that blew away the competition. A few years later, Rogers went out on his own. This book chronicles a motorcycle trip he took to nearly every country in the world. His brains and perspective make this a worthwhile read. Rogers opened my eyes to investing beyond the borders of the United States.
Street Smarts—Adventures on the Road and in the Markets by Jim Rodgers
A sort of updated version of his world travels since much has transpired from when he published Investment Biker. He has a tremendous knowledge of the international scene and believes so much potential rests in the Asia/Pacific region, that he moved his entire family to Singapore from NYC.
Health-Care Investing: Profiting from the New World of Pharma, Biotech, and Health-Care Services by Les Funtleyder
Basic book on investing in Healthcare stocks of all types, and good background information, not only for the novice, but for those less versed on the macroeconomics of healthcare – the regulation, politics, and reimbursement that impact companies and investors.