It's September -- back-to-school time. So what's on your money-making reading list this fall?Here are several recommendations from TheStreet.com. 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)) 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. -- Dan Freed Bad Money by Kevin Phillips and When Markets Collide by Mohammed El-Erian As the title suggests, Bad Money 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. -- Sham Gad Conspiracy of Fools by Kurt Eichenwald and Cycles: The Mysterious Forces That Trigger Events by Edward Dewey I think 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 technical analysis, and I find this book really makes a case for identifying patterns within the market. -- Debra Borchardt 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 The Prize 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.
The Prize will not teach you new tricks for investing in energy indexes, futures markets or exchange-traded funds. However, the wealth of data that is dispersed throughout the book will provide you with a new sense of context that will be invaluable to any energy investor. I guarantee one thing: After reading this book, you will never look at weekly supply and demand estimates from the Energy Information Administration the same way again. More importantly, The Prize is a near-perfect delivery system for providing a thorough-yet-manageable summation of the energy industry for anyone interested in conventional or renewable energy, macroeconomics, U.S. politics or macro-geopolitical forces. -- Chuck Marvin Freedom From Oil by David Sandalow I recommend David Sandalow's Freedom From Oil as it is important to keep up with the energy sector policy debate, while both looking ahead and understanding how we got here. Sandalow lays out the problem, some potential solutions and details what he believes could be a consensus plan that a strong, determined United States President might champion. Freedom From Oil is required reading for Senators John McCain and Barack Obama. Over the last two years, I have written more weekly articles on energy funds than any other single sector. The book presents viable alternatives I had not previously considered. It also serves as a reminder to investors that the purchasing and policy decisions of our government will create investment winners and losers and therefore merit close scrutiny and activism. -- Kevin Baker Techniques of Tape Reading by Chris Schumacher & Vadym Graifer and Smart Women Finish Rich by David Bach Writing Techniques of Tape Reading was a revitalization effort of learning the price-volume relationship in today's visualization of charts, and understanding the key principles of accumulation and distribution with the supporting principles that help investors learn to read crowd behavior versus retail behavior. Bach's Smart Women Finish Rich was written to provide women (and men, if they can read it applicably) the insight that smart financial decisions are emotional as well as intellectual, and how to use this understanding appropriately. This book also goes a step further and talks about investing in the context of an overall financial plan, driving the need to focus investments on specific goals, rather than just growing money to grow money. This bridging of planning and investing, as a piece to an overall financial puzzle, is gaining in popularity. -- Chris Schumacher When Genius Failed by Roger Lowenstein When Genius Failed by Roger Lowenstein is a history of the rise and fall of Long-Term Capital Management, the massive, highly-leveraged hedge fund whose collapse in 1998 nearly brought down Wall Street. Lowenstein does a great job explaining highly complex subjects, such as the byzantine derivative trades Long-Term bet the house on, and weaves a surprisingly compelling narrative for such a dense subject. I think it's a great book for investors to read, because its core message -- that even the smartest, most experienced traders and minds in academia just don't know for certain which way the market is headed at any given moment -- is a cautionary tale worth remembering. -- Michael Gannon
Intelligent Investor by Benjamin Graham and Buffettology by Mary Buffett Intelligent Investor by Ben Graham is a very concise look at the art and reasoning behind value investing, and it gives a very unique glance at the market before the Great Crash, which allows the reader to see how similar the 1920s market madness was to the technology bubble at the beginning of this decade. In my view, history does repeat and this will help investors gain a much broader look at economics and investment management through time and see that the current situation is likely to repeat at some point again in the future. Hopefully, readers will be able to detect the signals of mania as well as understand the art of value investing and hence be better prepared for the next bubble. I would also recommend Buffettology by Mary Buffett as a good inside look at Warren Buffett's technique in applying some elements of the value approach. This would complement Intelligent Investor quite well. -- Sam Patel Security Analysis by Benjamin Graham and David Dodd This is the bible of value investing. Warren Buffett lives by Graham and Dodd, and that should tell you volumes about this book. -- Scott Rothbort, " 20 Essentials for Achieving Financial Literacy" The Drunkard's Walk: How Randomness Rules Our Lives by Leonard Mlodinow In order to fully understand markets, you should possess an understanding of how the world works. And The Drunkard's Walk offers lessons in how random forces and events impact our lives. Whereas Burton Malkiel's classic, A Random Walk Down Wall Street focused on randomness in the securities markets, Mlodinow's book provides an understanding of how omnipresent randomness infects markets with such maddening unpredictability. Although the author is an accomplished mathematician well-versed in theoretical physics, the book's wisdom is related in lively, narrative form rather than through the use of complex equations. The book is entertaining reading, with great anecdotes that are likely to stay with the reader for years and logically reshape, to a degree, one's approach to life. "Thinking outside the box" has become almost a worthless cliché, yet this book provides clues on ways to modify our thinking process in order to confront a universe that is cursed and blessed by the omnipotent forces of randomness. -- Richard Widows