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Six Investment Classics for Lazy August Days

Marek Fuchs

Summer reading lists can be notoriously light and thin when it comes to the books that are on them. And this goes double for business books, which are often light and thin to begin with.

That is why out of August desperation -- I mean, with an august inspiration, The Business Press Maven is going to take a step back.

A number of readers have asked me to go beyond current books to recommend a classic reading list to them consisting of business books that, if read together, can give an investor a well-rounded look at the history, spirit and methods of investing. So consider this The Business Press Maven's literary canon, and I will be happy to make an appearance to cut a ribbon at the first business school to adopt it.

This list is not presented in any particular order. It is designed to give beginner investors the best flavor possible of Wall Street and investing, but if there is anything you advanced souls have missed on this list, bring it along on one of our fast-waning beach days. Anyone can learn from these:

Liar's Poker and Bombardiers are, in a sense, a non-fiction and fictionalized version of each other. For anyone interested in capturing the look, feel, smells, sights, sounds, ids and egos of trading desk life -- well, this pair of books is indispensable. And enjoyable.

Michael Lewis, who wrote Liar's Poker, worked for Salomon Brothers long enough to have a cup of coffee ... and write this book. It captures the start of a young man's journey on Wall Street and bull market headiness better than most, and though Lewis would go on to a nearly unrivaled career writing interesting books about business, this stands as his finest work.

In Bombardiers by Po Bronson, you get the comic spirit of bond desk life in one of the few -- perhaps only? -- business books that has ever had me laughing out loud on a train. You business school hacks -- if you don't read these two books before you interview, let alone start working on a trading desk, The Business Press Maven will personally seek you out for a series of particularly painful noogies.

Another must-read book is Extraordinary Popular Delusions and the Madness of Crowds, by Charles MacKay. You can read 100 books on everything from the tulip bulb craze to the more recent run-up in real estate. Or you can just read this book and understand how collective madness is born. This is an indispensable read.

So you want to be a stock trader but you don't know much about either math or the media? That's a potential problem. Actually, that's a potential pair of problems. That's why you should, lickety-split, pick up a copy of John Allen Paulos' A Mathematician Reads the Newspaper.

Though only a portion of the book is about business news, it hardly matters. Mathematical reason and the ability to correlate the proper subject with the most appropriate verb are rarely talents held in common, so as The Business Press Maven always point out, it's always reader beware. This book helps you learn to be more aware.

You really can't miss Security Analysis by Benjamin Graham and David Dodd. What is there to say here? If it is Warren Buffett's bible, you need to at least delve in reverently and reserve a place of honor for it on your shelf. Here's what you have to keep in mind: Even if their fundamental analysis does not hold you or appears outdated or not relevant to stronger markets, realize that this is a tested method. That does not mean, by any token -- mine or yours -- that you need to adopt the method as your own, as Buffett did, with his own tweaks.

Just realize that every investor, while building in flexibility, must also derive a method, an overriding, overarching theme for how to invest. If this tome puts you in the spirit of developing a method, which will make you more capable and less prone to sloppy mistakes made on that awful enemy of all good investors -- emotion -- then it has done its job once again. Forgive it the stilted writing.

My final recommendation is One Up on Wall Street. Peter Lynch offers an alternative method in this classic investment guide, where the writing and advice is not stilted but rather occasionally too-folksy-by-half. Since it offers such a good point/counterpoint, it should be read before or after Graham and Dodd. And again, understand that Lynch is not offering an easily imitated road to success.

In fact, some of what he recommends -- following your children through malls, investing in what you know -- is a bit simplistic. And certainly it does not account for Lynch's built-in advantages as a Fidelity money manger who corporate officials would beg to have audiences with to talk about the inner workings of their businesses intimately.

Moreover, investing in what you know can be limiting. An investor, like a journalist, does not have to be a know-it-all. But they can and should be a learn-it-all. If you don't know about technology, but the world is changing and there are great opportunities, well, take the time to learn.

But again, Lynch has a method that works. As do Graham and Dodd. There are no set answers, but everyone needs a set method. Your method can be better informed by your sense of how Wall Street works, thanks to Lewis and Bronson. Just be careful not to misread the news because journalists don't get math. And whatever you do in this late summer heat: Don't go mad with the crowd.