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What David Is Reading

Merchants of Debt:

KKR AND THE MORTGAGING OF AMERICAN BUSINESS
George Anders

It can be really fun to read the “history” of something that is still going today, bigger and stronger than ever, yet the “history” was written almost thirty years ago.  The origins of private equity behemoth started in the 1960’s, and this book was written in the early 1990’s, which means there was plenty to cover about KKR’s formation and first couple decades of existence when this was written, but I as a reader get to take it in knowing another ~30 years of history that the author didn’t know.  All in all, the book was utterly fascinating, the warnings about leveraged buyouts comical to read in the context of what actually happened with interest rates, and the historical detail well worth the read.  The demonization and misunderstanding of private equity is likely not going anywhere, but nor is private equity’s unmistakably positive contributions to our economy and quality of life.

WHO SAYS ELEPHANTS CAN’T DANCE?

Louis V. Gerstner, Jr.

The only thing I love more than a really good CEO memoir is a really good CEO memoir that the CEO actually wrote him or herself, sans ghostwriter. Gerstner is no longer with us but what he did for IBM in the 1990’s is one of the top five CEO legendary stories of all time, and his own raw memoir of his run there did not disappoint. Should be required business school reading, to the extent business schools still care about teaching one what it means to do business.

THE CAESAR’S PALACE COUP

Max Frumes and Sujeet Indap

You couldn’t make up an idea for a book that would suck me in more than this.  Private Equity investors in a brawl with junior debtholders over one of the largest Las Vegas conglomerate of assets in the world.  Lawyers.  Lawsuits.  Wall Street.  Capital structure.  Each side firmly convinced it is their ethical duty to get a pound of flesh out of the other side.  A fiduciary duty to equity investors.  The legal hierarchy of debtholders.  All wrapped in a well-written narrative and story about one of the most bizarre legal and financial stories of the last decade.  A stunning story with a who’s who of Wall Street cast.

THE ARISTOCRACY OF TALENT:

HOW MERITOCRACY MADE THE MODERN WORLD
Adrian Woolridge

The book was almost depressing just in the sense of how it captures the assault of meritocracy currently taking place by culture warriors of both the left and the right.  The book acknowledges some realities that a high value on merit, work, talent, and intelligence mean in the society, but dares to point out the scariest thing we face as a culture: Hint: It’s not more meritocracy, but rather, what we would face if we got rid of it!

Always A Good Idea

THE CASE FOR DIVIDEND GROWTH

INVESTING IN A POST-CRISIS WORLD
David L. Bahnsen

It wouldn’t make sense for me to have a recommended investing book list and not include the book that serves as the core investing philosophy of The Bahnsen Group!

THE INTELLIGENT INVESTOR

Benjamin Graham

The grandfather of value investing, Warren Buffett’s mentor, and the best explainer in history of buying a risk asset at a discount to the sum of its future cash flows!  Reading is believing …

FOOLED BY RANDOMNESS

Nassim Taleb

Not just in the investing world but in all of life, human nature causes us to mentally construct reasons and patterns for success, and allows us to be fooled by randomness, often to our own demise.  Chance, therefore, favors preparation.  And the quality of a choice can not be judged by the result – not if you care about the next time.

STOCKS FOR THE LONG RUN

Jeremy Siegel

More historical data than you may have signed up for, but this is a perfectly comprehensible book about the long-term reality of equity returns vs. other asset classes, and why that may be (i.e. the nature of the equity risk premium).  By long term, I mean, over 200 years of research is laid bare to make the case for a long-term equity bias.

ECONOMICS IN ONE LESSON

Henry Hazlitt

I can’t tell you how useful this book was to me at a very, very young age, in forming basic economic principles and understandings that would shape the foundation of what I believe about economic law and reality.

THE ESSAYS OF WARREN BUFFETT

LESSONS FOR CORPORATE AMERICA
Warren Buffett

This collection of essays from the oracle of Omaha, written over many decades, has become a vital addition to the libraries of not just investment advisors but corporate managers and business entrepreneurs.  Tremendous insights proven true over the test of time.

EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF CROWDS

Charles Mackay

If you are not a contrarian investor before you read this book, you will be after you read this book.  A historical instructive through the realities of human psychology and group think, and the disastrous investment results that can come about from those realities.

HUMAN ACTION

Ludwig Von Mises

It may be more philosophical than it is investment-application, but so much of my understanding of capital markets comes from my understanding of basic economics.  And this book many years ago taught me to understand human action as the core to understanding economics.  The calculations that serve at the core of human reasoning ultimately drive prosperity (and the preservation of civilization itself).  A few sentences can’t do justice to the richness of wisdom and profundity in this book.

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