Favorite reads of 2015, Curated for the Curious Investor

On-the-books advice on reads
Barry Ritholtz
Washington Post, February 7, 2016




Late last year, in a fit of pique lamenting poor financial advice in the media, I wrote a column headlined “Bah humbug to ridiculous year-end financial advice.” In it, I urged people to read books.

I mentioned that my favorite of 2015 was Last Ape Standing: The Seven-Million-Year Story of How and Why We Survived by Chip Walter. A few readers reached out to ask for more book ideas, wondering whom I might ask for their recommendations. So I did that. I sent out a request to my favorite strategists, fund managers, economists and others, asking “What was the best book you read in 2015?”

What follows is my lightly edited version of their answers.

A few things stand out. There is a strong bias toward nonfiction, especially biographies and history. To be sure, a wistful “I used to read fiction” sigh can be read between the lines. But these are busy folk who want to derive the maximum benefit from their reading. Indeed, there was only one serious fiction title, not counting the response from an unnamed hedge fund manager, claiming his favorite read in 2015 was “50 Shades of Grey, now that it’s finally out in large print.” (We know that the Kindle and iPad allow for font-size changes, so I have to assume this quant was kidding).

The result of the survey is a wonderful collection of books.

Vanguard Group chief executive and chairman Bill McNabb’s favorite book for the year was David McCullough’s The Wright Brothers. “What captivated me was that at every turn the deck seemed stacked against them, but they had this incredible drive to see their dream come to fruition,” he said. “The creativity, brilliance, and most importantly, grit, that they exhibited reminds us of what made this country great. I believe there are ‘Wright Brothers’ among us today and that great things are still possible.”

By coincidence, I gave this same book to Michael Batnick (head of research in my firm) as a holiday present. He liked it as much as Bill did.

Financial Engines co-founder and (recently retired) chief executive Jeff Maggioncalda selected “Sapiens: A Brief History of Humankind” by Yuval Harari. “Its arc spans from how we outcompeted Neanderthals to what future human life might look like as cyborgs and along the way suggests how and why our species has been such a unique phenomenon on planet Earth,” he said.

Fisher Investments founder and chief executive Ken Fisher liked “The Intel Trinity: How Robert Noyce, Gordon Moore, and Andy Grove Built the World’s Most Important Company” by Michael S. Malone: “It tells the inside story of the driver behind most of the last four decades’ productivity improvements — how it happened and the people involved, focused foremost on Noyce, Moore and Grove,” he said. “But I was a semiconductor analyst temporarily in the ’70s, knew two of the three and lots more people cited in the book and it was a great read about a phenomenal cadre of folk who will likely in their ilk never be reproduced in kindred spirit and soul again.”

Years ago, I enjoyed reading “Inside Intel: Andy Grove and the Rise of the World’s Most Powerful Chip Company,” but this looks even more interesting.

Charley Ellis of the Yale Foundation and Vanguard Group selected “The Aspirational Investor,” by Ashvin B. Chhabra. “This book provides investors with a clear and compelling new way to think through their objectives in investing that will help them align all their investing with their true values,” he said. Ellis also reread one the all-time classic novels, “Don Quixote” by Miguel de Cervantes; he also demonstrated how much this crew went for biographies, adding “any book on Lincoln. I read three.”

There was only one book mentioned by more than one person, and that too was a biography: “Reagan: The Life” by H.W. Brands. Dimensional Funds Chairman David Booth said: “I liked the new bio of Reagan, by H.W. Brands. Reagan showed how to be a leader even if the other party controls both houses.” Nick Murray, who has spent the past 20 years as a consultant to financial advisers, said: “I loved the book as I loved the man: a president who actually believed in America as a moral force, who had limitless faith in its future and whose own unshakable confidence empowered ordinary Americans to be optimistic.”

One last bio was worth mentioning: “Life” by Keith Richards was suggested by Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. She said, “It’s only rock and roll, but I loved it,” but was left pondering: “How in the world is that guy still alive?!”

Jack Schwager, author of the “Market Wizards” books, as well as chief research officer of Fundseeder.com, enjoyed “My Promised Land: The Triumph and Tragedy of Israel” by Ari Shavit. “An extremely well-written, strikingly objective history of modern Israel written by an Israeli journalist,” he said, “which combines fascinating historical insights and human narratives.”

Venture capitalist Bill Janeway of Warburg Pincus and the University of Cambridge enjoyed Jonathan Levy’s “Freaks of Fortune: The Emerging World of Capitalism and Risk in America.” “Consummate scholarship that transcends the boundaries of economic, financial and political history,” he said.

Beyond the history and biography, philosophy was a big part of the list. Stephen Roach, now of Yale University, formerly of Morgan Stanley, liked“The Road to Character” by David Brooks. “Character is the anchor to a moral and just society that sadly appears to be adrift in our increasingly ADD world,” he said. “Brooks challenges our increasingly self-absorbed cultural norms with a clarion call for humility — a staggering pause for thought in our hyper-kinetic era that seems to pause for nothing.”

Grant Williams, author of “Things That Make You Go Hmmm,” called Liaquat Ahamed’s “Lords of Finance: The Bankers Who Broke the World” “a truly exceptional read.” He notes that “history holds all the answers to the questions of today — you just have to know where to look. ‘Lords of Finance’ does that brilliantly, going back to the 1920s and ’30s to examine the state of the world which was then controlled (surprise, surprise) by four central bankers. The parallels between the post-WWI world and that of today are startling.”

That is our top-10 list. A few other books were suggested that merit mention.

University of Chicago professor Richard Thaler enjoyed “Economics Rules,” by Dani Rodrick, (but he noted that it was best suited for econ wonks).

Meb Faber of Cambria Investment Management liked “Happy Money: The Science of Happier Spending” by Elizabeth Dunn, noting: “as money managers we spend so much time thinking about making and protecting our money, when in reality, most spend very little time thinking about how to spend it.”

Lastly, Rob Arnott of Research Affiliates reread — on its 50th anniversary — Thomas Kuhn’s “The Structure of Scientific Revolutions.” Kuhn coined the expression “paradigm shift.” Arnott said that Kuhn “challenges the standard notion that science advances incrementally, a step at a time. Instead, he demonstrates, through an examination of the history of science, that it advances by widely separated leaps, then stalls due to stubbornness and dogma.”

That is enough intelligent reading to keep you busy with a new and highly regarded book every month for the rest of the year. Get busy!

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