It's September -- back-to-school time. So what's on your money-making reading list this fall?
Here are several recommendations from
The House of Morgan by Ron Chernow
This is an extremely well-written and researched book that explains the roots of modern finance by focusing on the history of the large and powerful American banking empire created by J.P. Morgan (which includes what became
J.P. Morgan Chase
(JPM - Get Report)
) from its origin in 19th-century London to the stock market crash of 1987.
The book is good at explaining large concepts, such as why some of the world's most powerful banks do not seem like the places where we cash our checks, and it has vivid personal details, including how George Peabody, founder of what became the House of Morgan, would waste an entire afternoon dragging a cabbie to the police station for overcharging him.
Bad Money by Kevin Phillips and When Markets Collide by Mohammed El-Erian
As the title suggests,
is a look into how a financial avalanche can develop. The idea does not necessarily relate to Gresham's Law (bad money drives out good), but more to do with the evolution of money and how our economy is so dependent on it in an economic sense. Consider that decades ago, America was a manufacturing economy; now the bulk of growth comes not from making things, but creating pieces of paper that are traded over and over. The wealth creation is not concrete.
When Markets Collide
is written by one of the best risk assessors I know. I heard Mr. El-Erian speak years ago in New York (when oil was around $45 a barrel) and he made a compelling case as to why the global shift would lead to a substantial rise in oil. Now, what has the markets, especially the U.S, in a funk is that they were not prepared for such a quick and massive shock like the mortgage meltdown.
Conspiracy of Fools by Kurt Eichenwald and Cycles: The Mysterious Forces That Trigger Events by Edward Dewey
Conspiracy of Fools
is worth reading because it demonstrates how a company can cook its books and fool everyone. Enron was not the first and it will not be the last company to do this -- a good lesson to learn and remember. Personally, I think Eichenwald's book shows how business journalists can help in the process of bringing these stories to the public.
Another favorite is an out-of-print book called
Cycles: The Mysterious Forces That Trigger Events
by Edward Dewey. You can find and buy used, cheap copies online. This book explores various cycles that repeat and these principles can be applied to the market. Cycles, like corn prices and stock market movements, are tracked over long periods of time and show an uncanny ability to repeat themselves. Personally, I like
, and I find this book really makes a case for identifying patterns within the market.
The Prize: The Epic Quest for Oil, Money and Power by Daniel Yergin
This book is arguably the most comprehensive and crucial recount of the over 150-year history of the global oil industry. As the hardcover first edition of the book contains well over 800 pages and is about as comfortable to grip at eye level as, say, a decent sized Atlantic grouper, the fact that its subject matter is comprehensive shouldn't be all that surprising. What is surprising, is that Daniel Yergin's
is an absolute blast to read!
Yergin is as skilled at storytelling as he is at collecting data, and you are immediately swept with the sensation that you have a front-row, dead-center seat to one of the most hair-raising sagas of the modern era. Yergin's story begins with ranchers and woodsmen stumbling upon puddles of bubbling black oil in the Pennsylvania backcountry and ends in the modern-day geopolitical reality in which the survival of entire civilizations can be affirmed or denied by simply turning an oil spigot one way or another.