Something Interesting to Read January 2017

10 Important Books To Make You A Better Investor In 2017 (adapted from the article)

Short Reads For Beginners

The Elements of Investing: Easy Lessons for Every Investor 
by Burton Malkiel and Charles Ellis
"These authors each penned one of “The Classics” below, but they join forces to provide one of my favorite short reads on investing and saving. Perfect for readers of all ages and experience levels."

The Little Book of Common Sense Investing 
by John Bogle
"Jack Bogle, the father of the index fund, helped revolutionize investing. Bogle has written many books, but this relatively short one contains a lifetime of wisdom." 

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The Classics 

A Random Walk Down Wall Street 
by Burton Malkiel
"A must own for serious investors, Burton Malkiel explains the difficulty of predicting stock prices, but also focuses on aspects of investing at different stages of life." 

Winning the Loser’s Game: Timeless Strategies for Successful Investing 
by Charles Ellis
"This book is a classic and should be required reading for investors of all levels. With markets seemingly getting more unpredictable by the day, this book helps you avoid common traps and raise your probability for success."

Thinking, Fast and Slow 
by Daniel Kahneman
"Daniel Kahneman won the 2002 Nobel Prize in Economic Sciences for his work in behavioral finance. There are countless lessons applicable to investing, but this will also transform the way you think about choices we make in business and our personal lives."

The Success Equation: Untangling Skill And Luck in Business, Sports, and Investing 
by Michael Mauboussin
"This book is a slam dunk for a sports fan, but extremely useful to all investors. We quickly attribute our successes to skill, but luck plays a far greater role than most people realize. Mauboussin provides framework for identifying skill versus luck and makes concrete suggestions for using this knowledge to your advantage."

Against the Gods: The Remarkable Story of Risk 
by Peter Bernstein
"Peter Bernstein explores the history of money through the lens of financial risk, beginning in ancient times and into the modern world of portfolio theory. Bernstein does an excellent job explaining the underlying mathematics in simple terms, making this book very informative and relevant to practitioners." 

Fooled By Randomness 
by Nassim Taleb
"Serious investors will find this Nassim Taleb's stories to be highly insightful.  Using a combination of his own experiences as well as stories of others successes and failures, Taleb to help us better understand the role of chance in the world around us."

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Investment Books That Will Make You Laugh

The Devil’s Financial Dictionary 
by Jason Zweig
"Funny and easy read.  Jason Zweig, known by most for his columns in The Wall Street Journal, is one of the best writers around. This book is relevant for anyone that has been exposed to the investment industry as an employee or customer."

Where Are the Customers’ Yachts? 
By Fred Schwed
"The title is based on the story of a man admiring the yachts of New York bankers and brokers, but then wonders: where are the customers’ yachts? This book was written in the 1940’s, but still portrays many truths about the business of Wall Street." 

Trade the News in Forex: How to Capitalize on the Biggest Moves in the Market
by Michael Duane Archer

How to profit from news that moves the Forex market

Trade the News in Forex shows readers everything they need to know to profitably trade specific Forex news events. It begins with a discussion of what constitutes Forex news, then highlights several common news trading techniques and outlines how broker dealers have worked to counter these measures. The author covers several more sophisticated techniques and systems, directs readers to a multitude of resources available, and outlines how to combine these techniques into a current trading strategy. There is money to be made trading Forex news, and this book will show readers exactly how.

Michael Archer (Golden,CO) has been an active Forex and commodity futures and Forex trader for over 30 years. He is the author of Getting Started in Forex Trading Strategies and coauthor of the first Getting Started in Currency Trading, Second Edition, The Forex Chartist Companion, and Charting the Major Forex Pairs, all from Wiley. He hosts the Forex Web site.

by M. A. Soupios and Panos Mourdoukoutas

Here are 12 quotes from the book that provide a glimpse into the qualities and practices of great leaders:

1. Skills and experience might land you a leadership position, but they don’t make you a true leader.
2. Leadership comes from inside—and the greatest leaders first question themselves before they tackle the world around them. To aid in this critical interrogation.
3. The "fate" of organizations is not based on the stars. The character of an organization's leadership determines a company's destiny.
4. The assumption of authority brings out the leader’s inner world.
5. Leadership cannot be done by the numbers.
6. Toxic environments are not the result of spontaneous bad fortune. They are the resultof toxic leaders.
7. Of all the many potential shortcomings an assumed leader might bring to an organization, nothing is more lethal than the arbitrary application of power.
8. Supervisors who constantly micromanage, who second-guess every subordinate decision, who gleefully await any and all opportunities to criticize and bully, are a toxic presence in any environment.
9. The most lethal distortions come not from the lips of our opponents or competitors. They tend to flow, instead, from our own hearts.
10. Truth is an invaluable corporate asset. Don’t let it go waste. Embrace it.
11. Never underestimate the power of personal integrity; always set an honorable agenda; adhere to a code of professional conduct; never try to justify dishonesty and deceit; rather fail with honor than win by cheating.
12. Honest assessment is an essential requirement of effective leadership….The problem is that the higher up the ladder you go, the less likely it is that you will receive complete and accurate information.

Algorithmic and High-Frequency Trading (Mathematics, Finance and Risk)
by Álvaro Cartea (Author), Sebastian Jaimungal (Author), José Penalva (Author)

The design of trading algorithms requires sophisticated mathematical models backed up by reliable data. In this textbook, the authors develop models for algorithmic trading in contexts such as executing large orders, market making, targeting VWAP and other schedules, trading pairs or collection of assets, and executing in dark pools. These models are grounded on how the exchanges work, whether the algorithm is trading with better informed traders (adverse selection), and the type of information available to market participants at both ultra-high and low frequency. Algorithmic and High-Frequency Trading is the first book that combines sophisticated mathematical modelling, empirical facts and financial economics, taking the reader from basic ideas to cutting-edge research and practice. If you need to understand how modern electronic markets operate, what information provides a trading edge, and how other market participants may affect the profitability of the algorithms, then this is the book for you. 

by Diane Coyle

GDP is one economic model among several that could serve the purpose, but its use conveniently leads to policies that reflect the thinking of a particular school of economic monetary and fiscal policy advocates.

We all know that in operating a business we need to be able to measure the profits of our company and then adjust our prices and production to make sure that there are enough profits to adequately fund the company. That is a relatively straightforward process, since the amount of money in the bank at the end of the month is a real number.

GDP: A Brief But Affectionate History is a fascinating 140-page book that I cannot recommend highly enough. This is simply the best book on GDP that I’ve ever seen. You can read it on a few hours’ plane ride or a lazy Sunday afternoon. And Ms. Coyle actually makes a relatively dry subject interesting and at times a page-turner. She has a true gift.

Ms. Coyle starts with the predecessors to Adam Smith and takes us through the 17th century right up until today with the development of GDP, so we see the ebb and flow of ideas through time. Who knew the early developers of the model did not want to include defense spending, as they saw it as a wasteful, nonproductive activity? Or that Adam Smith thought the inclusion of services in the concept was misleading. “The provision of more services was a cost to the national economy, in his view. A servant was a cost to his employer, and did not create anything. Importantly, money spent on warfare or the interest on government debt was also being used unproductively. The nation’s wealth was its stock of physical assets less the national debt. National income was what derived from the national wealth.”