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A Summer Reading List From Expert Investors

Dagen McDowell

When it comes to trash, the investing section at Barnes & Noble passed the fiction department a long time ago.

I was strolling through my local B&N this weekend and I couldn't believe some of the goofball titles and topics among the how-to investment books.

Not that there aren't some great investment or business texts around. I asked a number of investment professionals to name the one book (some named more than one) they would suggest to an investor, seasoned or newbie. Consider one of these for your vacation reading as an alternative to the latest Stephen King novel:

Economist Merton Miller suggests Investments, co-authored by fellow Nobel Prize winner William Sharpe, creator of the eponymous risk measurement. "It is totally comprehensive," says Miller, professor emeritus of finance at the University of Chicago's Graduate School of Business. Sharpe's condensed academic wisdom makes this "an ideal reference book," Miller adds. "He is not selling anything, and he is telling you the way it is."

Steven Einhorn, vice chairman of Leon Cooperman's hedge fund Omega Advisors, recommends three tomes. First, Global Asset Allocation: Techniques for Optimizing Portfolio Management, edited by Jess Lederman and Robert Klein. "It is a terrific framework for assessing markets around the world" and building an asset allocation model, says Einhorn, the former head of global research at Goldman Sachs.

Second, Einhorn mentions The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy by Robert Hagstrom. The books details the Omaha master's approach to constructing portfolios. Lastly, Einhorn singles out The Digital Economy: Promise and Peril in the Age of Networked Intelligence by Don Tapscott, which covers the implications of the networked economy and investing.

Frank Zarb, chairman of the National Association of Securities Dealers suggests Business @ the Speed of Thought: Using a Digital Nervous System by Microsoft (MSFT) mastermind Bill Gates. "The book provides a clear view of the corporate tools, which will be available in the digital environment ahead," writes Zarb in an email. "It is a must-read for global CEOs."

Arden Armstrong, manager of (MPEGX)MAS Mid Cap Growth and (MSCGX)Small Cap Growth funds, points to a work by the famed Milton Friedman: Monetary History of the U.S. 1867-1960. Many investors are aware of financial events that occurred as far back as the 1960s, but that "is a pretty limited time frame," says Armstrong. This book will give you a broader historical perspective. It "will also give you some insight into the Federal Reserve," she adds. "[Alan] Greenspan is a student of history. You can see why the Fed bailed out Long-Term Capital and why the Fed pumped liquidity into the system."

Bill Nygren, manager of the (OAKLX)Oakmark Select fund, opts for more contemporary reading: Jack Schwager's Market Wizards: Interviews With Top Traders. The book profiles very successful investors from various types of investing. It explores "how many different ways of investing are successful, and how important it is to understand your own personality and match up the right style for you," says Nygren. "The important thing is matching your view of the world and your own personal biases with a style that maximizes your personal strengths and minimizes the impact of your personal weaknesses."

Plus, "it is very easy summer reading because of the way the chapters break out," Nygren adds. (For those of you who are interested, Market Wizards has a sequel called The New Market Wizards.)

Charles Scavone, a member of the team that runs the (CSTGX)AIM Constellation and (ASCOX)AIM Small Cap Opportunities funds, agrees with Nygren's pick. You "gain multiple lifetimes of experiences just for the price of that book," Scavone says. But he also offers a second choice: Reminiscences of a Stock Operator by Edwin Lefevre. Written in 1923, the book recounts the story of Jesse Livermore, a renowned speculator. It's great for "understanding the psychology of the market," says Scavone.

More than anything, the book market seems bloated by an excess of personal finance books. But the following volumes may be worth spending some time on.

Daniel Roe, a financial planner with Budros & Ruhlin in Columbus, Ohio, recommends Jane Bryant Quinn's Making the Most of Your Money for comprehensive personal financial planning. It covers "everything that makes up an individual's financial life."

Ben Tobias of Tobias Financial Advisors in Plantation, Fla., likes Andrew Tobias' The Only Investment Guide You'll Ever Need. "It is written in an easy-to-read format and is packed with common sense," says Ben Tobias. "I couldn't put it down. I read the whole thing. I wish I had written it. And no, I am not related to him."

David Foster of Foster & Motley in Cincinnati, suggests John Bogle's Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor. "It is a greater investing book and a great mutual fund book."

That should keep everyone busy for the next few months.

Send your questions and comments to deardagen@thestreet.com, and please include your full name.