Books to read for undergrad with limited knowledge of finance and investing

Rank: Chimp | 2

I'm going into my sophomore year at a mid-target school studying Math and Econ and currently have a 3.83 GPA in my major (school has an undergrad business program but I'm in arts&sciences). I have excellent quantitative skills (800 on SAT Math/Math level 2, lot of competition math), but my knowledge of finance and investing is rather limited. What are the best books to read if I'm interested in potentially interning this summer and going into finance as a career? I'd like to learn about investing as a whole as well as more technical things that may be necessary to know for an internship/job. I read a lot, but need some direction on the best use of my time in terms of finance books. Keep in mind that with my math/econ major I won't really be able to take many or any finance courses, so textbook recommendations are also greatly appreciated - even just recommendations on the type of textbooks I should read. I'm most interested in going into IB, though I'd appreciate recommendations across the board; I'm looking to learn as much as I possibly can. Thanks.

Comments (103)

 
8/15/16

I have been working on a list, and could use some opinions from other monkeys:

Investing:
- The Intelligent Investor - Ben Graham
- Berkshire Hathaway Warren Buffet's Shareholder Letters
- The Most Important Thing - Howard Marks
- You Can Be a Stock Market Genius - Joel Greenblatt
- One Up on Wall Street - Peter Lynch
- Margin of Safety - Seth Klarman
- Quality of Earnings - Thornton O'Glove
- Money Masters of Our Time - John Train
- Education of a Value Investor - Guy Spier
- Common Stocks and Uncommon Profits - Philip Fisher
- Manuel of Ideas - John MIhaljevic
- The Outsiders - William Thorndike

Finance:
- Equity Research: Exile on Wall Street - Mike Mayo; Confession of a Wall Street Analyst - Daniel Reingold
- Private Equity: King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzmann and Blackstone; King Icahn: The Biography of a Renegade Capitalist; The Predators' Ball : The Inside Story of Drexel Burnham and the Rise of Junk Bond Raiders
- Investment Banking: Monkey Business: Swinging Through the Wall Street Jungle
- Hedge Fund: When Genius Failed - Roger Lowenstein; Fooling Some of the People All the Time, A Long Short Story - David Einhorn; Confidence Game: How Hedge Fund Manager Bill Ackman Called Wall Street's Bluff - Christine Richard; The Greatest Trade Ever - Greg Zuckerman; The Big Short - Michael Lewis
- Banks: Money and Power: How Goldman Sachs Came to Rule the World - William Cohan; House of Morgan - Ron Chernow
- Enron: The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron - Bethany McLean
- Sales and Trading: Liar's Poker - Michael Lewis; The Buy Side - Turney Duff; Straight to Hell: True Tales of Deviance, Debauchery, and Billion-Dollar Deals - John LeFevre

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8/16/16

Fantastic list! I'd add The Accidental Investment Banker, The Last Tycoons: The Secret History of Lazard Freres & Co., Blue Blood and Mutiny: The Fight for the Soul of Morgan Stanley, and The Iron Triangle: Inside the Secret World of the Carlyle Group (overwrought with conspiracy theories, but provides an excellent view into the early/formative stage of Carlyle) on there, too.

Also, on the textbook front, you don't always need a book; you can watch Coursera classes instead. The Wharton Financial Accounting Class and Intro to corporate finance can be very helpful and are free. If you're committed to books, Rosenbaum & Pearl is the way to go. I liked Vernimmen's book, too.

 
8/16/16

Thanks For the Books that have been recommended.

 
 
8/16/16

Option Volatility & Pricing: Advanced Trading Strategies and Techniques by Sheldon Natenberg (read that first).

and secondly,

Options, Futures, and Other Derivative Securities by John Hull.

These two are the best you can have, and should be required to trade I feel.

 
8/16/16

I actually felt the same way about The Logical Trader. When I made that list I literally was just looking over on my bookshelf and listing.

The books that really hit home for me are those that emphasized psychology of trading and anything regarding money management/position sizing.

What type trading do you want to learn about? what product? Are you talking about market making? Arbitrage? Directional speculative Bets? Short Term Investing? Long term investing?

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

 
8/16/16

Like I said, I have no experience trading. I don't really know which product and type of trading I'd like to do. What would you recommend if my goal is to nab a summer analyst trading slot at an investment bank in a year or two?

 
8/16/16

Chim Chim is definitely right specifically John Hull's book, one of the later versions, as it's been extended.

Also another classic one is the Inside the Yield Curve, by Leibowitz & Homer. Was for a long time the required reading for all incoming S&T classes.

 
8/16/16

John Hull for sure. And you should get a copy of the intelligent investor by Benjamin Grahm too - fundamental

 
8/16/16

Black Swan

"Cowards die a thousand deaths, but the brave only one,"
Bill Shakespeare

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equit...

 
 
8/16/16

Thorndike's "The Outsiders." If you are planning a career in IB (which I'm assuming you are since you're posting on the IB forum) it will do you a world of good. Is also interesting, well paced, and and accessible.

 
8/16/16

Stay gold, Ponyboy.

But for real, Thorndike's book is great.

 
8/16/16

Books like selling and learning how to communicate well.

 
8/16/16
  • The Millionaire Next Door
  • How to Win Friends & Influence People
  • The Art of War
  • 48 Laws of Power
  • Extreme Ownership

A bit more abstract to apply, but still useful.
- 33 Strategies of War
- A Book of 5 Rings (I would read the book then look on YouTube for a few different videos breaking down the lessons into practical applications. Jocko's podcast does a great analysis.)

A lot of the books on here get a bad rap for cultivating an environment of office politics, manipulation, etc., especially Robert Greene's stuff, but I've found that they are more useful than just for becoming a sociopathic asshole.

I've found these have books taught me the following:
- The importance of having a strategy: The multiplied impact of deliberate, directed actions versus simply grinding toward your next annual review.
- How to be a better communicator: Being able to see the situation from other people's perspectives to collaborate more effectively toward a win-win scenario.
- Understanding people's needs and motives: This can help you deal with prickly colleagues and figure out who the backstabbers are from straight shooters.
- Being more confident and assertive: Through practice picking up on the subtle cues to press your hand or hang back.
- Marketing yourself more effectively: Your reputation is all that you have left to fall back at the end of the day.

 
 
8/16/16

Let me start out by asking a few basic questions so that we can help you better.

At what kind of school did you study (non-target/semi-target/target)? What kind of previous work experience do you have? Why are you out of a job at the moment? Do you know how to model? Do you have a network within PE?

Without answers to these questions, it will be hard to assess your chances of landing a PE gig. If you are asking for a blanket recommendation, I can vouch for the PE guide from WSO which helped me tremendously to 1) understand the history of the industry, 2) develop my technical skills and 3) strengthen my answers to fit questions

 
8/16/16
kinghongkong:

Let me start out by asking a few basic questions so that we can help you better.

At what kind of school did you study (non-target/semi-target/target)? What kind of previous work experience do you have? Why are you out of a job at the moment? Do you know how to model? Do you have a network within PE?

Without answers to these questions, it will be hard to assess your chances of landing a PE gig. If you are asking for a blanket recommendation, I can vouch for the PE guide from WSO which helped me tremendously to 1) understand the history of the industry, 2) develop my technical skills and 3) strengthen my answers to fit questions

I graduated from UCLA a few years back. I was working for an engineering firm but wanted to try something new, so I worked at a small startup thinking that it might be something I wanted to get into. The hype about joining startups appealed to me at the time, but then I got bored and the interest died so I decided to leave, and then from there I started studying for the CFA because I didn't have any relative finance background. I was always into the stock market and knew I wanted to get into something with investing opportunities... Although, I'm still tinkering with ideas on exactly where in the finance world I want to be in, but I currently do have a strong interest in Private Equity.

I've been reading a few posts and people always mention LBO, so I think that's something I'm going to tackle first in the next couple of days. I have the CFA test tomorrow so after that I'm going to be laser focus on my path towards PE.

I haven't done any networking because I've been studying for the CFA, everyday. But I'm planning to get a move on that as well, shortly. Any suggestions/tips on this?

 
8/16/16

I echo the above comment in needing to know more, but here's a book recommendation that'll familiarize you with LBO modeling:
https://www.amazon.com/Leveraged-Buyouts-Website-P...

 
8/16/16

That's a great book recommendation! It will certainly be helpful to some lurking monkies :)

 
8/16/16

I credit it for getting me my current gig!

 
8/16/16
zanderman:

I credit it for getting me my current gig!

Can you explain how it helped? For me, understanding what works for people can help me see where I can focus my attention.

 
8/16/16

It helped me understand how LBO's work and how to model them. Of course the on-the-job models will get more complicated and unique than what's in the book, but this was extraordinarily helpful for doing a case I had to do as part of my interview process (which required a "brief" lbo model).

 
8/16/16

Thanks! I will have to check it out!

 
8/16/16

Hi @zanderman I forgot to ask, did you have any prior experience? Or was your current gig based on you knowing LBO just from the book?

 
8/16/16

I did not have prior PE or banking experience- I had some modeling experience from school, but none was LBO and I had forgotten most by the time I was interviewing.

 
8/16/16

Sounds like there's hope for an oldie like me if I learn LBO.

 
 
8/16/16

^Hahahaha

Why exactly does meeting someone senior entail that you must read a book? Do you want to discuss it with him or do you want to get a better grasp of what he does?

 
8/16/16

Good advice Swagon. Haha.

CHItizen:

^Hahahaha

Why exactly does meeting someone senior entail that you must read a book? Do you want to discuss it with him or do you want to get a better grasp of what he does?

It's not exactly a 5 minute coffee break meeting. I'll be spending quite a few hours with this person in a non-formal environment. I just want to appear as smart as humanly possible and get a better grasp of what he does.

Competition is a sin.

-John D. Rockefeller

 
8/16/16

Have you read Barbarians at the Gate? That's a really good one, but I'm sure you've read it.

 
8/16/16
Connor:

Have you read Barbarians at the Gate? That's a really good one, but I'm sure you've read it.

Unfortunately, I haven't gotten around to it yet. I was hoping for something a little more technical for this occasion, but then again since this is a non-formal event, discussing valuation metrics may not be the best idea. I was also hoping to find something a little more obscure, in the hope of uncovering something he hasn't heard of yet. However, Barbarians at the Gate still remains on the list of candidates.

Competition is a sin.

-John D. Rockefeller

 
8/16/16

The Accidental Investment Banker gives a good history of investment banking through the eyes of a senior banker at GS/MS, but it's a little dense. You Can Be a Stock Market Genius by Joel Greenblatt is a good value investing book that reads very quickly.

All that being said, I'm still not sure reading a book is the best way to go about this. Articles and papers can be very helpful and insightful as well.

 
8/16/16
CHItizen:

The Accidental Investment Banker gives a good history of investment banking through the eyes of a senior banker at GS/MS, but it's a little dense. You Can Be a Stock Market Genius by Joel Greenblatt is a good value investing book that reads very quickly.

All that being said, I'm still not sure reading a book is the best way to go about this. Articles and papers can be very helpful and insightful as well.

I've heard that as well about Greenblatt's book. Right now it remains one of the front runners and it is a hell of a lot quicker to read than any of Graham's work, not to mention much more up to date.

As far as articles and papers go, that is something I usually do anyway.

Competition is a sin.

-John D. Rockefeller

 
8/16/16

How to win friends and influence people

 
8/16/16
Gub_15:

How to win friends and influence people

Second this, it's a quick read too. I know you said Graham is time-consuming, but the revised edition with Jason Zweig provides nice recent examples for each chapter.
http://www.amazon.com/The-Intelligent-Investor-Rev...

 
8/16/16
Gub_15:

How to win friends and influence people

This is one of the best books ever written. If you apply its principles it will help you establish a bond with the person which is really all that matters.

 
8/16/16

The (mis) Behavior of Markets

This is one of the best books about the unpredictability of markets. I doubt most investment bankers have read it. Plus, it actually makes for an interesting discussion.

 
8/16/16

for value investing, "Letters to Corporate America: Essays by Warren Buffett"-Prepared by Lawrence Cunningham.

as for financial history and the financial crisis, "Too Big to Fail"-Sorkin, is a 500 page book but it reads somewhat fast. of course, it talks a lot about the deals and consolidation of the investment banks

 
8/16/16

Honestly, I would just read the WSJ and FT cover to cover everyday until you meet. You can never go wrong having an intelligent discussion about current events in the industry. Pick their brain about whatever they seem most interested in.

EDIT: Or (and?) read "Currency Wars" by James Rickards. Absolutely phenomenal book that has made the rounds in the finance community. All about competitive devaluations, reserve currencies, central banking, etc. It was written recently and is extremely relevant to events happening now.
http://www.amazon.com/Currency-Wars-Making-Global-...

 
8/16/16

one up on wall street by peter lynch

 
8/16/16

The 48 Laws of Power.

It's not related to any of the fields you listed, but it's still a great and interesting book.

 
8/16/16

I'm gonna encourage "The Accidental Investment Banker" as well, it was well worth the read (and wasn't too long).

"When I was young I thought that money was the most important thing in life; now that I am old I know that it is."
- Oscar Wilde
"Seriously, psychology is for those with two x chromosomes."
- RagnarDanneskjold

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Side-by-side comparison of top modeling training courses + exclusive discount through WSO here.

 
 
8/16/16

Boomerang

Step 1: Dream the Dream || Step 2: Live the Dream || Step 3: Rinse, repeat.

 
8/16/16

When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein

 
8/16/16

Personally didn't like Boomerang all that much. Best book I've read in the past year is Currency Wars.

 
8/16/16

Too Big to Fail by Andrew Sorkin. Also pretty cool was The Zeroes by Randall Lane

 
8/16/16

The Intelligent Investor by Graham.

Did you fly over my helmet?

 
8/16/16

Too Big to Fail is a book about characters, not really about finance at all. Sorkin tells a great story but it is much more the "who" of the financial crisis than the "why".

The Big Short is a quick read and Michael Lewis paints one of the best pictures about how/why everyone was an idiot in the lead-up to the financial crisis.

Barbarians at the Gate is longer but a great read about business generally and LBO's specifically.

 
8/16/16

reminiscences of a stock operator.

 
8/16/16

It is a challenging read but The Alchemy of Finance by Soros is absolutely incredible. Market Wizards is very good as well.

 
8/16/16

Keyword:Enjoyable. This takes out The Alchemy of Finance and The Intelligent Investor.

Boomerang truly wasn't that good of a book, especially when compared to Michael Lewis' other books. Its decent for a airplane ride since its so short and written on a 6th grade reading level. It's just a collection of a series of Vanity Fair Articles.

Too Big to Fail=Too Big to Read. All these financial crisis books are the same story, different author, same message and cast of characters.

Second The Zeroes.

My recommendation is Street Freak by Jared Didion. It's about a Delta-1 trader for Lehman brothers spanning the 10 years before 9/11 and ending the day they went under. Fascinating account of trading lifestyle, thought process, money and culture as well as entertaining

 
8/16/16

If you like investment banking rather than the markets / investing, The Accidental Investment Banker by Jonathan Knee is fabulous.

It's written by an experienced banker who has seen banking change over the years at GS & MS from the inside. Talks about the actual work of a VP / MD and has a few good stories of deals / internal politics / banking history.

 
8/16/16

Damn It Feels Good To Be A Banker by the Leveraged Sellout

 
8/16/16
Nouveau Richie:

Damn It Feels Good To Be A Banker by the Leveraged Sellout

Haha! This books is the antithesis to the one I recommended!

 
8/16/16

When genius failed is a tough read if you don't have a basic understanding of HF. My favorites have been:

-The accidental Investment banker (talks about the evolution of IB from the 80's-recent)
-King of Capital (all about blackstone and how PE became to be)
-Monkey business (quick fun read)

XX

 
8/16/16

The Most Important Thing - Howard Marks

Serious soft spot for that book at the moment.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

 
8/16/16
Oreos:

The Most Important Thing - Howard Marks

Serious soft spot for that book at the moment.

He has some great letters to investors on his fund's site.

 
8/16/16
Relinquis:
Oreos:

The Most Important Thing - Howard Marks

Serious soft spot for that book at the moment.

He has some great letters to investors on his fund's site.

The book is a consolidation, of sorts, of his letters. I read the book and now have moved onto the letters one by one. Both of whic are very accessibly written, eye opening and thought provoking.

"After you work on Wall Street it's a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side." - David Tepper

 
8/16/16

The accidental investment banker

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

 
8/16/16

Monkey Business is like The Accidental Investment Banker in a nutshell. Both good reads if you're interested in IB. It's hard to narrow it down to one, but The Big Short was a good read.

 
 
8/16/16

There used to be a recommended reading list on WSO somewhere. Try to find that and read everything on there.

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

 
8/16/16
Matrick:

There used to be a recommended reading list on WSO somewhere. Try to find that and read everything on there.

How am I supposed to find a thread in a pile of posts, not even knowing when was it last posted or replied.

 
8/16/16

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

 
8/16/16
 
8/16/16

No worries, feel free to PM if you need anything else

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

 
 
8/16/16

When Genius Failed
life of fischer black
Liars Poker (of course)

 
8/16/16

thanks. i'm looking for more personal finance stuff and personal investing stuff, a la greenblatt.

 
8/16/16

Mad Money by Jim Cramer... good stuff

 
8/16/16

and Cramer has a new book out too

 
8/16/16

im looking for books that provide information on trading as well as an insiders view on the industry (think fiasco by frank portnoy and Liars Poker)

any suggestions?

 
8/16/16

Both the 'The Market Wizards' and 'The New Market Wizards' are an amazing read...though they are more for trading rather than value investing.

 
8/16/16

I read Cramer's new book, good stuff. Den of Thieves, Liars Poker, When Genius Failed....are all classics and a definite read. Enjoy!

 
8/16/16

Reminescences of a Stock Operator. It doesn't give out and out rules to follow like "Buy stocks with EPS growth > 25%, etc." but it is great for learning general strategy, understanding the market, etc. Highly recommend this.

 
8/16/16

FIASCO by Frank Portnoy
- id call it a 90s version of Liars Poker focused on derivatives trading at Morgan Stanley

 
8/16/16

"Running Money" is good by Andy Kessler. Book is about Kessler, a wall street research vet, and his partner starting a tech hedge fund out in CA. Brings up some solid/summarizing points at the end.

 
8/16/16

yeah liar's poker gets re written every decade or so. honestly, from reading FIASCO you get the sense the author didn't really understand the products that well. and i think it's Partnoy.

 
 
8/16/16

Books are too general. Go to local events for the schools you're interested in and network your ass off. Also, go visit the schools and do the same. Stay in touch with Alum, current students, and if possible the admissions staff. Some schools will give you sample essays from admitted students so you can get a feel for the content in a successful essay. The admissions literature is too general and won't be very helpful. Each school has it's own niche and you need to sell the school on how their particular strengths cater to your short and long term goals. While attending various events, I found two alum and two current students to review (AKA trash) my essays but they were extremely helpful. Get it directly from the horse's mouth, not some yo-yo who couldn't get into a top school but decided to start a business "giving advice" on how to get in. How many ex bankers or consultants do you think are sitting around writing these books? You'll run into a lot of dead ends, but all you need is a couple of people to review your essays. I got well over 200 business cards and I told you how many people actually reviewed my essays, but that was all I needed...

Although there are books with sample essays of accepted students, those would probably be helpful if they are in fact actual essays...

 
8/16/16

Hi,
Although I have not applied, I plan to apply for fall 2008.
How to Get into top MBA program -- by Richard Montauk is really good book try that.

 
 
8/16/16

When Genius Failed, Barbarians at the Gate, The Accidental Investment Banker, Blue Blood and Mutiny, The Last Tycoons, The Partnership, The House of Morgan.

 
8/16/16

Been done 100 times. Run a search

 
8/16/16

The Intelligent Investor by Benjamin Graham. I've read it over 5 times, the guy should receive a knighthood.

 
8/16/16

I'm new to IB also and want to learn about it.
I start college this year and want ahead start
Can you suggest any activities?

 
8/16/16
mocha:

Can you suggest any activities?

I would suggest you practice using the search function

 
 
8/16/16

I would buy this book... its on JPM's summer reading list. I've heard alot of people have been talking about this book.

The Last Amateurs by Mark de Rond

 
8/16/16

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