A friend asked for some recommendations.
My nephew is 16 and wants to “get rich in the stock market”. He knows nothing. Is decent at school/math. I want to send him five books. He probably won’t have the patience for stuff that is too dry or dense.
I think it’s helpful to get a glossary understanding of concepts in the first place. Khan Academy is great for that. Of course that it just to explain terms but my book recs would have more to do with think of the markets as competitive games with prices as point spreads.
To that end my recs for core reading:
- The Most Important Thing by Howard Marks
- Fooled By Randomness by Nassim Taleb
- The Psychology of Money by Morgan Housel
- 4 Pillars of Investing by William Bernstein
- I Will Teach You To Be Rich by Ramit Sethi
- Just Keep Buying by Nick Maggiulli
- Superforecasting by Phil Tetlock and Dan Gardner
- We both agreed Moneyball by Michael Lewis fits beautifully in this context so that would round out the list.
For a bit more advanced I’d recommend:
- The Little Book That Beats The Market by Joel Greenblatt The reason this book is great besides being short is that it is a hands-on demonstration of how to have a process and marries understanding core business math with an investing process (sorting, filtering, measuring, and normalizing). There are many implementations of the strategy floating around the web with modifications so if he wants to dig there’s plenty of fertile soil. While the vanilla strategy is mined into oblivion at this point, the real objective is to understand the process because that’s universal and applies to trading as well as investing. It’s a mental template.
- The Accounting Game: Basic Accounting Fresh from the Lemonade Stand by Darrell Mullis and Judith Orloff read this a few years ago and it’s a hands-on, easy way to learn the basics of accounting. It explains how balance sheets, income statements, and cash flow statements interconnect. It describes how you book items and the tradeoffs involved. It helped me appreciate how much judgment is actually included in accounting as well as how you can tell different stories with the way you choose to do accounting. Accounting feels like a subject I’d enjoy which is a sentence I never thought I’d say. I took my own notes here.
- The Laws Of Trading by Agustin Lebron. My notes here.
Finally 2 novels that use narrative to teach:
For my other collections see: