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Summer is finally here! It’s time to pack up the car and get out of town! The summer months are a great time to unwind, disconnect and break open a good book.
The high finance world on Wall Street can be downright perplexing to many people. Fortunately, there are some great authors out there who can expertly guide us through these complicated and high-stakes worlds. Here are some favorites!
The Big Short: Inside the Doomsday Machine. If we said that a book about the bond and real estate market would be turned into an Academy Award-winning movie, would you believe us? The film was based on the outstanding book by Michael Lewis, who uses a character-driven narrative to take us deep into the world of complex derivatives.
Barbarians at the Gate: The Fall of RJR Nabisco. You probably recognize the name ‘Nabisco’ as the maker of some of your favorite treats, including Oreos, Ritz Crackers, Triscuits, Wheat Thins and more. You may not know that they merged with a tobacco company in 1985 or that they were the subject of the then-largest leveraged buyout in history at $25 billion. What’s a leveraged buyout, and why did a cookie company merge with a tobacco company? Pick up Barbarians at the Gates to find out!
Reminiscences of a Stock Operator. Even though it was published almost 100 years ago, the book remains essential for anyone interested in trading, the psychology of crowds or just looking for an entertaining ride. It’s follows stock trader Jesse Livermore, who serves as the inspiration for the main character. Livermore pioneered day trading and was infamous for making huge, contrarian bets. For instance, Livermore made $1 million in one day by shorting the market during a bank run known as the Panic of 1907 — that’s $28.4 million in today’s dollars! In one day! One year later, he filed his first of three bankruptcies. It’s an insightful, funny and poignant time machine to early-20th century America.
These three topics — derivatives, corporate mergers and stock trading — remain just as relevant today as they were when these books were originally published. All three titles are classics and are worth a read.
Have you ever wondered where our modern-day financial system came from? It was built on thousands of years of history, trial and error. Read on for my financial history recommendations!
The Ascent of Money: A Financial History of the World. Historian and Stanford University fellow Niall Ferguson makes the case that finance is an innovation on par with any technological marvel humanity has created. He casts a new light on familiar events like how the Renaissance was enabled by Italian foreign exchange dealers or how the French Revolution tracks back to an earlier stock market bubble. It’s a great book that shows just how central finance is to underwriting humanity’s greatest achievements and worst failures.
Debt: The First 5,000 Years. Anthropologist David Graeber explores the origin of debt and the evolution of credit systems to finance the growth of agrarian empires like the Persians and Romans. Graeber is an anthropologist, so he takes a uniquely human-centered view of the institutions and systems a credit-oriented system imposes on the people working within it. These fascinating observations make the book a great option for a deep dive!
The Man Who Knew: The Life and Times of Alan Greenspan. Arguably, the most powerful person in the world isn’t the President of the United States, it’s the Chairperson of the Federal Reserve. Alan Greenspan served as Chairman of the Federal Reserve from 1987 to 2006. He led the Fed through the Savings and Loans Crisis and the Dotcom Bubble and, arguably, influenced the economic conditions that culminated in 2008’s Global Financial Crisis. But is the criticism fair? Journalist Sebastian Mallaby traces Greenspan’s rise to power over his career to offer deeper insight into the mysterious point where government and the economy meet.
Whether you read any or all of these books, you’ll learn about some important history of financial evolution. I hope you enjoy!
Provided by Ed Wettig, CFP, Wettig Capital Management which offers investment management, financial planning and retirement income strategies. Securities, insurance and investment advisory services offered through Royal Alliance Associates, Inc. Member FINRA/SIPC. Wettig Capital Management is a marketing designation.