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Expert picks – investment books for the summer

Some of our experts give us a run down on what’s on their summer reading lists.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

We’ve asked a few of our experts for ideas of what’s featured on their summer reading lists in recent years. There’s quite a range, from history to hedge funds, and hopefully something to tickle most appetites.

Simplexity (Jeffrey Kluger)

Charlie Bonham, Senior Equity Analyst

If you found Freakanomics or Fooled by Randomness interesting reads, then Simplexity should feature on your reading shortlist. How the same thing can seem complex yet somehow very easy to understand is the nub of Jeffrey Kluger’s excellent book.

A series of short essays use historical examples to answer a number of questions through this lens of simplexity. Kluger looks at paradoxes like, ‘Why do bad teams win so many games and good teams lose so many?’ and, ‘Why do we worry about the wrong things?’

Of particular interest to many investors will be the first chapter, which tackles why the stock market is so hard to predict. Much of the rest of the book isn’t explicitly related to investing, but it certainly gives much food for thought and an interesting framework through which to think. The fluid style and abundance of historical examples make what could be a turgid subject an enjoyable and relatively easy read.

The Signs Were There (Tim Steer)

Sophie Lund-Yates, Equity Analyst

This book is a must-read. It explores the ways to spot the signs that a company is in trouble, and reiterates the importance of studying the annual reports of companies you want to invest in. That’s an ethos everyone on the equity research team would heartily encourage!

It’s easy for financial books to feel a bit dry, or even bewildering if you’re a beginner. Fortunately Tim Steer’s anecdotes are both easy to follow and interesting – it’s particularly helpful that it includes annotated examples of the more complex financials discussed.

Among other things the book looks at how management teams can manipulate revenue and profit numbers, and the problems caused by lacklustre reporting regulations. Of course with these things there’s an element of “well, hindsight is 20/20”, but The Signs Were There offers a solid – and accessible – grounding in where to look to help avoid share price disasters.

When Genius Failed – The Rise and Fall of Long-Term Capital Management (Roger Lowenstein)

Charlie Huggins, HL Select Fund Manager

Long-term Capital Management was once the beacon of the hedge fund industry. With an unrivalled roster of illustrious scholars and traders, clever quantitative models, superlative trading skills, and superior intellect – it seemed it could do no wrong. And at first, everything they touched turned to gold.

However, there’s nothing like success to blind one to the possibility of failure. The story morphs into one of astonishing greed, arrogance and reckless abandon. The twin cocktails of excessive leverage and over confidence bring the once mighty Long-Term crashing to its knees, blowing a trillion dollar hole in the international banking system.

Long-Term’s riches to rags saga is full of lessons for investors and had me hooked from the very first page. I couldn’t put it down.

Gender Equality By Design (Iris Bohnet)

Emma Wall, Head of Investment Analysis

This book centres on breaking down ingrained gender inequality – why you should care about it, and practical tips on how to overcome it. It’s packed with real life examples of gender bias through history and across the world – conscious and unconscious – and what happened when simple, inexpensive changes were made to break them down.

Bohnet shows that diversity leads to more robust decisions, and more successful outcomes.

While the book centres on gender, the central message is that diversity in all forms is more than a nice to have. It’s imperative for sustainable teams – in business, in the classroom and in government.

The 100 Year Life (Lynda Gratton & Andrew J Scott)

Nathan Long, Senior Pensions Analyst

As populations age we’ll increasingly have to work longer to fund our longer lives. This book gives a thought provoking insight into the future of work. It explores how technological disruption will impact on the services we need and the knock on this has to the labour market and the types of jobs that will be required.

Clearly the jobs required in the future will differ from those of the past. The book explores how people will work in the future, considering the interaction between work, personal life, health and retraining throughout a longer working life.

It's very relevant for people like me who obsess over how people will fund their financial futures. But will also be interesting for people who want to understand how future shifts in work will impact upon their investments.

The Great Crash of 1929 (John Kenneth Galbraith)

Nicholas Hyett, Equity Analyst

By complete coincidence I happened to pick this book up in a charity shop in mid-February – a surprisingly good source of investment books over the years. As a history of the Wall Street crash it turned out to be worryingly appropriate, with UK share prices falling some 33% in the following weeks and the world entering the “worst recession since the Great Depression”.

For all its fairly grim subject matter it’s an excellent read. Light anecdotes tell you a lot about the hubris and disaster that characterised one of the great stock market booms and busts.

Unfortunately Galbraith’s analysis of the causes of the crash includes some worrying similarities to subsequent crises and even current conditions – human nature never changes it would seem. Excessive debt and speculative investments feature prominently. All horribly familiar.


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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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