Last week we discussed 6 characteristics of a differentiated investment approach that supports the long-term growth of a multi-generational family’s assets. As the family investment office – i.e. the investing wing of the family office, is built out we wanted to highlight a few books that are excellent guides from world class investment programs.
Note – these books are not focused on specific investment strategies, but are instead focused on the process for building top-tier investment management firms. Below each book is a blurb from Amazon on each.
How to Articulate an Investment Philosophy
Charles Ellis
The go-to guide for serious investors seeking long-term success, Winning the Loser’s Game explains clearly the all-important lessons learned over half a century working with the world’s leading investment experts.
Called “Wall Street’s wisest man” by Money magazine, Charles Ellis converts the expertise he has developed as a consultant to the world’s largest pension, endowment and sovereign wealth funds and as a teacher at Harvard, Yale and Princeton into candid, pithy, easy to use chapters on how to succeed as an investor.
Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment
David Swensen
An indispensable roadmap for creating a successful investment program from Yale’s chief investment officer, David F. Swensen. In the years since the now-classic Pioneering Portfolio Management was first published, the global investment landscape has changed dramatically — but the results of David Swensen’s investment strategy for the Yale University endowment have remained as impressive as ever. Year after year, Yale’s portfolio has trumped the marketplace by a wide margin, and, with over $20 billion added to the endowment under his twenty-three-year tenure, Swensen has contributed more to Yale’s finances than anyone ever has to any university in the country. What may have seemed like one among many success stories in the era before the Internet bubble burst emerges now as a completely unprecedented institutional investment achievement.
Benjamin Graham
The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.
The Most Important Thing: Uncommon Sense for The Thoughtful Investor
Howard Marks
Informed by a lifetime of experience and study, The Most Important Thing explains the keys to successful investment and the pitfalls that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate his ideas, Marks teaches by example, detailing the development of an investment philosophy that fully acknowledges the complexities of investing and the perils of the financial world. Brilliantly applying insight to today’s volatile markets, Marks offers a volume that is part memoir, part creed, with a number of broad takeaways.
How to Structure an Investment Firm
In just 40 years this Brazilian trio built the biggest empire in the history of Brazilian capitalism and launched themselves onto the world stage in an unprecedented way. The management method they developed, which has been zealously followed by their employees, is based on meritocracy, simplicity and constant cost cutting.
Capital: The Story of Long-Term Investment Excellence
Charles Ellis
The Capital Group is one of the world’s largest investment management organizations, but little is known about it because the company has shunned any type of publicity. This compelling book, for the first time, takes you inside one of the most elite and private investment firms out there. It digs deeps to reveal the corporate culture and long-term investment strategies that have made Capital the one organization where most investment professionals would like to work and would most recommend as long-term investment managers for their family and friends.
The Idea Factory: Bell Labs and the Great Age of American Innovation
Jon Gertner
The definitive history of America’s greatest incubator of innovation and the birthplace of some of the 20th century’s most influential technologies. From its beginnings in the 1920s until its demise in the 1980s, Bell Labs-officially, the research and development wing of AT&T-was the biggest, and arguably the best, laboratory for new ideas in the world. From the transistor to the laser, from digital communications to cellular telephony, it’s hard to find an aspect of modern life that hasn’t been touched by Bell Labs. In The Idea Factory, Jon Gertner traces the origins of some of the twentieth century’s most important inventions and delivers a riveting and heretofore untold chapter of American history. At its heart this is a story about the life and work of a small group of brilliant and eccentric men-Mervin Kelly, Bill Shockley, Claude Shannon, John Pierce, and Bill Baker-who spent their careers at Bell Labs. Today, when the drive to invent has become a mantra, Bell Labs offers us a way to enrich our understanding of the challenges and solutions to technological innovation. Here, after all, was where the foundational ideas on the management of innovation were born.
Manage Decision Making / Organizational Psychology
Reminiscences of a Stock Operator
Edwin Lefevre
First published in 1923, Reminiscences is a fictionalized account of the life of the securities trader Jesse Livermore. Despite the book’s age, it continues to offer insights into the art of trading and speculation. In Jack Schwager’s Market Wizards, many of the traders interviewed considered Reminiscences a major source of stock trading information for both experienced and new traders. The book tells the story of Livermore’s progression from day trading in the then so-called “New England bucket shops,” to market speculator, market maker, and market manipulator, and finally to Wall Street where he made and lost his fortune several times over. Along the way, Livermore learns many lessons, which he happily shares with the reader. The Wall Street Journal described the book as a “classic”, it was ranked #15 on Fortune’s 75 The Smartest Books We Know, and Alan Greenspan said it is “a font of investing wisdom.”
What I learned losing a million dollars
Jim Paul
Jim Paul’s meteoric rise took him from a small town in Northern Kentucky to governor of the Chicago Mercantile Exchange, yet he lost it all―his fortune, his reputation, and his job―in one fatal attack of excessive economic hubris. In this honest, frank analysis, Paul and Brendan Moynihan revisit the events that led to Paul’s disastrous decision and examine the psychological factors behind bad financial practices in several economic sectors.
Sources of Power: How People Make Decisions
Gary Klein
Since its publication twenty years ago, Sources of Power has been enormously influential. The book has sold more than 50,000 copies, has been translated into six languages, has been cited in professional journals that range from Journal of Marketing Research to Journal of Nursing, and is mentioned by Malcolm Gladwell in Blink. Author Gary Klein has collaborated with Nobel laureate Daniel Kahneman and served on a team that redesigned the White House Situation Room to support more effective decision making. The model of decision making Klein proposes in the book has been adopted in fields including law enforcement training and petrochemical plant operation.