This year, however, a reader, an M.B.A. student, asked the question slightly differently. The reader, who approached me on the subway with a copy of “Barbarians at the Gate” in hand, asked, “If you wanted to get smart about business by reading your way through the summer, what would your master reading list look like?”
I had to get off the subway before I was able to answer the question.
To Sorkin’s list I would add:
● Connie Bruck’s The Predator’s Ball on Michael Milken and Drexel Burnham Lambert.
● Roger Lowenstein’s When Genius Failed on the 1998 collapse of the hedge fund Long-Term Capital Management.
● Either Bethany McLean and Peter Elkind’s Smartest Guys In The Room or Kurt Eichenwald’s Conspiracy of Fools on Enron’s demise.
● Jeff Madrick’s Age of Greed on Wall Street’s financial revolution from 1970 to today.
● Aaron C. Brown’s Red-Blooded Risk: how the AQR Capital risk manager views financial markets.
● Michael Mauboussin’s More Than You Know on alpha generation and investment idea screening.
● On the GFC, Sorkin’s Too Big To Fail; William H. Cohan’s House of Cards and Money & Power; or Lawrence G. McDonald’s A Colossal Failure of Common Sense.
The above list is heavily biased toward financial journalist reportage.
These books are useful for the self-development of new traders:
● Ari Kiev’s The Mental Strategies of Top Traders on trader psychology, leadership, and variant perception.
● John Coates’ The Hour Between Dog and Wolf on the neuroscience of trading.
● Daniel Kahneman’s Thinking, Fast and Slow on cognitive biases and decision heuristics.
● Mihaly Csikzentmihalyi’s Flow: The Psychology of Optimal Experience on ‘flow’ psychological states.
In May 2012, I compiled a Wall Street Reading List of books I had read in 2010-12 to understand financial markets.