If you’re like me and you’ve read dozens or hundreds of books on the markets, you’re bored of being recommended Market Wizards or Reminscences for the 100th time. So I won’t bother including any of trading classics in this list.
Over the years I’ve spent hours scouring Goodreads, Amazon’s “People Also Bought” and so on searching for hidden-in-the-rough finance books. Kinda crazy how few finance books are out there.
Here are some of my favorites, ranging from under-the-radar to best sellers.
I’ll be periodically updating this list with new books I find.
This is by far my favorite finance book. The title does it such a disservice. It’s not Flash Boys but a historic account of electronic trading through the lens of a cast of interesting characters. Who knew that a shady day trading firm played such a pivotal role in modernizing equity markets? Seriously go read this. It’s like Breaking Bad, I wish I never read it so I can enjoy it for the first time.
The story of an emotionally unstable ETF trader at Lehman up to the financial crisis. Great insight into the prop culture at banks pre-Dodd-Frank. Crazy risk taking culture that I definitely didn’t picture as an outsider to that world.
Jared’s a great writer and if you want more from him, he does a daily market note at The Daily Dirtnap.
This book is full of short selling anecdotes from a long/short manager. It’s the best intro to the qualitative side of short selling, the type of stuff you hear Jim Chanos tell news anchors are red flags on CNBC.
I always find myself quoting the part where he shorts a rollerblade company based on a Wall Street analyst’s projection that rollerblades are the new bicycle. Because her social circle of affluent, young, and competitive finance people were into rollerblading, she thought everyone else would too.
Tells the story of Ed Thorp and Claude Shannon and how they were pioneers in applying math to gambling and markets.
Insider Buy is like the modern-day How To Make Money In Stocks. It’s all about finding small momentum stocks with growing sales/earnings and a significant enough catalyst to create a multi-week or multi-month move.
Traders of all disciplines will find something to dislike about this book. Quants will balk at the curve fitting of the “magic lines,” security analysts will find little substantive security analysis, and technicians will say he should have sold here because the Gann-Fibonacci Strength Index was undersold at the retracement line, or something :P.
But Stine lets his P&L do the talking. I like that.
A historical and respectful account of the history of technical analysis, or using market data to make trading decisions.
Andrew Lo is a heavyweight in the world of financial academia and technicians should listen what he has to say.
An equity momentum hedge fund manager walks you through a basic momentum strategy and also his account of managing a very similar momentum portfolio throughout dotcom and the GFC.
The story of an NYC stock broker during the dotcom boom. Punting client money on funny-money dotcom stocks is just fun reading.
It’s written by The Fly, who you probably follow on Twitter for his market news headlines.
The story of Jim Simos and his hedge fund, Renaissance Technologies, the best performing hedge fund of all time.
As a Long Island guy, it’s so cool to hear about the place down the road from where you grew up printing billions and kicking everyone’s ass.
Readers of Dark Pools will love this one, as it’s an account of the history of electronic trading from another perspective.
Also, interestingly, Simons once used tactics learned in John J Murphy’s technical analysis book to trade at Renaissance in the 90s.
The story of Nav, a ‘trading savant’ who grew up in a lower class neighborhood in London (I think?) and grinded his way to millions through pure grit.
Somehow a futures scalper was blamed for ‘causing’ the flash crash.
It’s a really well-written and engaging story of a pretty interesting guy who took his competitve nature way too far but was very likely a scapegoat.
This is like the social media version of using Fisher’s “scuttlebutt.”
Chris finds trade ideas through curiosity. Everyone is buying a new toy at Christmas time? Let’s look into the company who makes it. Do they have a stock? Is this growth priced in yet?
Nowadays he uses a scraping tool he licenses to hedge funds but the concept involves finding consumer trends not yet reflected in stock prices and positioning with it.
The book is light on details but it made me money, which is more than I can say about most finance books.
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