Your 2021 summer reading list
5 books you should take on your beach vacation
Summer is the season of reading. These long lazy days offer the opportunity to carve out some time to catch up on those books you’ve been meaning to read all year—whether on the beach in Hawaii, lounging on a hammock in the backyard or lying on a comfy couch in an air-conditioned house.
If you don’t mind mixing business with pleasure, I have some recommendations for a few books on investing that are not only enjoyable but educational as well.
1. How to Buy Stocks by Louis Engel & Peter Wyckoff
This book has special meaning to me because it was the first book my father gave me to read about investing in the stock market. I read it in 1982, but there have been eight revised editions since then.
The book is incredibly well-written, easy to understand and a great primer to get started on becoming an investor. It got me hooked and inspired me to get my first job on a bond trading desk on Wall Street in 1984. I recently gave it to one of the rising stars of our firm to read. If you only have time to read one book about investing, start with this one.
2. One Up on Wall Street: How to Use What You Already Know to Make Money in the Market by Peter Lynch
Peter Lynch was the Warren Buffet of his era. In fact, on some levels, he was a far better investor. Most investors in the last 20 years may not have heard of Peter Lynch but in the 1980s and 1990s he was the investment guru at Fidelity Funds when the company was the vanguard of today.
Everyone wanted to work at Fidelity and if you couldn’t work there, at least you had an account there. Peter looked like Andy Warhol, but he made investing easy. He argued that you could beat Wall Street just by investing in companies of products you used and like every day.
For example, my nephew was a fan of iTunes, so he bought Apple stock back in 2003 and still has the stock today. Easy book to read. Lynch takes a common-sense approach to investing by taking out the mystery of picking stocks.
3. The Millionaire Next Door by Thomas Stanley and William Danko
Stanley and Danko make the case that anybody can be a millionaire if you save enough money and do not waste it on private schools or fancy cars and houses. Americans want to appear rich to others with material goods, in effect trying to keep up with their friends or neighbors, but, if you never save any money, you will end up quite poor. You may have graduated from an Ivy League college and have a high-paying job, but this forces you to live in a big house, drive an amazing car and send your children to private schools.
All these things cost a ton of money. The Millionaire Next Door argues that if you put away 20 percent of every dime you make and live well below your means, one day you can be a millionaire. The authors suggest investing in things that produce cash flow, like rental properties. This book inspired me to buy rental properties as a side business. At one point in time, I owned five and it was fun and quite profitable.
4. Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System–and Themselves by Andrew Sorkin
As a student of history and a manager of money, I could not put this book down. If you lived through the financial crisis of 2008-2009, you cannot find a better summary of what happened. Sorkin takes you through why it happened and who the key players were. More importantly, you realize how close we came to another Great Depression.
Lessons learned from Federal Reserve Chairman Ben Bernanke, Treasury Secretary Harry Paulson and New York Fed Governor Tim Geithner were applied by our current Federal Reserve Chairman Jerome Powell in the spring of 2020 when the coronavirus shut down the U.S economy. He knew what to do and how to do it because of those three American heroes. It’s a fascinating book and I highly recommend it. There was an HBO film made about the book in 2011.
5. Liar’s Poker by Michael Lewis
This was the first book published by Lewis, who has been a prolific writer and speaker ever since. Liar’s Poker chronicles Lewis’ first job was working as a bond salesman in the late 1980s at Salomon Brothers, which was the JP Morgan of the day. I liked the book because it captured the culture and atmosphere of what it was like to work on Wall Street when it was considered the only place to work.
He mixes in humor and real-life characters of the titans in the business world at that time in history. Author Tom Wolfe wrote about bond salesmen being “masters of the universe” in his terrific novel Bonfire of the Vanities, and Lewis makes this come to life with his own personal experiences. While Lewis’ Wall Street career was short-lived, Liar’s Poker still proves to be a quick and clever read.
During my 37 years in the financial services industry, I bet I have read over 100 books on the economy or the markets, so it was difficult to pick just five to recommend. Each of these books resonated with me at different times in my career, broadened my understanding of investing and made me a more well-rounded advisor. Take a moment to read one or all these books, and you will be glad that you did. Now hit the beach!
Fred Taylor co-founded Northstar Investment Advisors, LLC in 1995. The firm specializes in managing personalized investment portfolios for individuals, families, and retirees with a focus on income generation. He is a member of the Colorado Forum and also served as an economic advisor to Colorado Governor Bill Ritter from 2008 to 2010.