The following are books that have had the most significant impact on my investment philosophy. Though that philosophy is heavily influenced by a belief in Austrian School Economics, only two of these books deal with Austrian Economics specifically. What they do provide, however, is education and wisdom on how real-world markets work, which has allowed me to develop a philosophy that does incorporate the Austrian School.
I should note that I have provided links to Amazon where available, solely for the reader’s convenience. I have no affiliation with Amazon and do not receive any compensation for the sale of these books.
10) How to Make Money in Stocks, by William O’Neil (1988)
Mr. O’Neil’s CANSLIM system focuses on small-cap growth companies. In addition the book provides an interesting discussion on the problem of “over-diversification” and how it can affect mutual fund returns.
9) The (Mis)Behavior of Markets, a Fractal View of Risk, Ruin & Return by Benoit Mandelbrot and Richard L. Hudson (2004)
So you think the markets are random? The first three pages should quickly dispel you of that notion. Of course, non-random should not be mistaken for easily exploitable. But this book will challenge your current understanding of risk.
8) Unexpected Returns, Understanding Secular Stock Market Cycles by Ed Easterling (2005)
Get this book, turn to page 28, and study figure 3.1.
7) A Viennese Waltz Down Wall Street by Mark Skousen (2013)
One of two books on the list that deals specifically with Austrian School Economics. Let me share a simple rule, I learned a long time ago: If Dr. Skousen has written it, you should read it.
6) The Education of a Speculator by Victor Niederhoffer (1996)
This book holds the unfortunate distinction of being published just before a very public blow-up of Mr. Niederhoffer’s hedge fund. Don’t let that (or a subsequent high profile blow-up in the 2008 crisis) discourage you from learning how to “Niederhoffer” a class, or read his descriptions of the investment ecosystem and role of deception in nature.
5) Investment Psychology Explained, Classic Strategies to Beat the Markets by Martin J. Pring (1993)
Don’t be fooled by the ill-advised subtitle “Classic Strategies to Beat the Markets” this is not a how-to book on investing, but it will teach you how to think about investing.
4) The Indomitable Investor by Steven M. Sears (2012)
In the same vein as Investment Psychology Explained, a how to think about investing book. Insights on topics such as whether or not Warren Buffet’s favorite holding period really is forever, the shortfalls of Modern Portfolio Theory, behavioral investing, why regulation is likely to fall short of intentions, and more.
3) Trader Vic, Methods of a Wall Street Master by Victor Sperandeo with T. Sullivan Brown (1991)
The book that introduced me to the Austrian School of Economic Thought, I can’t do it justice with only a couple of lines, just read it.
2) The New Market Wizards, Conversations With America’s Top Traders by Jack D. Schwager (1994)
1) Market Wizards, Interviews With Top Traders by Jack D. Schwager (1992)
Jack Schwager’s Market Wizards series is the holy grail of trading and investment books. There is a saying that “Good judgment comes from experience. Experience comes from bad judgment.” The Market Wizards books literally contain thirty-five lifetimes of trading experience, wisdom, failures, and successes.
DISCLAIMER: Nothing in this article should be construed as a personal recommendation or advice. Nor should anything in this article be construed as an offer, or a solicitation of an offer, to sell or buy any investment security. Barnhart Investment Advisory clients and principals may hold positions in any securities mentioned in this article. Investors should conduct their own due diligence and seek the advice of a financial and/or investment professional before making any investment decisions.