Recommended Books & Websites
Books
The Road to Serfdom, Friedrich A. Hayek One of the earliest and most eminent thinkers within the Austrian School of Economics, Hayek won the Nobel Prize for economics in 1974, explaining the reasons for economic boom and bust cycles based on artificial credit expansion, followed by contraction. In this particular book, Hayek goes so far as to tell the reader why socialism not only leeches out the potential for prosperity in a nation economically, but why it ultimately leads to a forfeiture of freedom as well. Funny thing is, when I first read it in 2004, I thought “thank God America doesn’t fall into this category.” Today, I believe the book reads as a blueprint for our current situation and the path the nation is on. The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb Taleb’s opus, this book has come to be the touchstone for framing and understanding rare events and their impact on us humans. While highly applicable to finance, and certainly the reason I wanted to include it here, this book’s implications range far and wide. If you’ve ever heard Taleb give a speech or interview, then you know that he can easily relate the black swan concept to everything from climate change to how to live your daily life differently. In short, the book is a study on randomness, its impact, and how to be more robust to it. You will be unable to invest the same as you used to after reading “The Black Swan.” Fooled by Randomness, Nassim Nicholas Taleb Taleb’s earlier and less popular work compared to “The Black Swan,” this book is no less compelling. In it, he lays the groundwork for why humans have such difficulty understanding the origins of rare events, and responding to the probabilities behind such seemingly random events. Taleb’s style is unmistakable, and he takes obscure concepts and makes them highly readable. I’d recommend starting with “Fooled By Randomness” before moving on to “The Black Swan.” Crash Proof 2.0: How to Profit from the Economic Collapse, Peter Schiff Schiff has been one of the great champions of free market economics and a return to lesser government involvement in the market. Extremely outspoken and unshakeable in his ideals, I believe Schiff nearly singlehandedly brought attention to the impending housing collapse in the mid-2000’s…while being ridiculed all along the way. Looking back, his prescience is undeniable, and that reason alone should be enough to compel you to read this book. That said, there are numerous benefits you’d derive from his thoughts on inflation, the current debt/deficit situation, foreign stock investing, and emerging market outlooks for Europe, Asia and the Pacific Rim. Simply put, a must read cornerstone of any enlightened investor’s library. The Little Book of Bull Moves in Bear Markets, Peter Schiff Relative to “Crash Proof,” here Schiff gets more technical and less philosophical, outlining specific strategies, industries, sectors and stocks that would theoretically benefit in a difficult economic climate. While some of the material here will obviously become dated as we move further from its 2008 publication, much of it will still apply, and the reader will still get a good sense of how to evaluate good investment choices in tough markets. I.O.U.S.A., David Walker David Walker, former Government Accountability Office chief until 2007, has since been working with the Peter G. Peterson Foundation on the Fiscal Wakeup Tour, aiming to educate Americans on the nightmarish debt and deficit situation we’ll soon face here. This book is a primer on what that situation really amounts to, citing all kinds of tough-to-swallow numbers and projections that illuminate the urgency of our predicament. (A documentary was made to go along with the book in 2008, and ironically hit theaters in August of that year, a month before the Lehman collapse and subsequent financial crisis.) Readers should pick this book up to get up to speed on these issues. Atlas Shrugged, Ayn Rand Rand’s most famous work, this book flew off the shelves during the 2008-2009 government takeover and bailout of private companies. Why? Because Rand was famous for the message she’d put into this book, essentially a warning of what happens to the industriousness of individual workers when the government becomes an onerous and burdensome force in the economic dynamic of a nation. Rand was a fierce devotee of free markets, and she had an uncanny ability to communicate why a nation straying from such a principle did so at great cost. The Fountainhead, Ayn Rand The lesser known and earlier work to “Atlas Shrugged,” in this book Rand examines the singular struggle of one man in his quest to live life on his own terms and within the construct of a pure capitalistic ideal. The fascinating thing about the book, written some 30 plus years ago, is the accuracy with which Rand portrays all of the forces that are arrayed against such a person in modern society, and the difficulty one would face in clinging to the ideals Rand offers as so important. Readers will have a hard time not rooting for the protagonist in this book. The Wealth of Nations, Adam Smith The manifesto of capitalism, free markets and the reasons why some nations prosper and others don’t. If Smith were alive today, he’d tell you exactly why the US is not a free market economy, and be able to list every which way that we’ve strayed from that ideal. 1984 & Animal Farm, George Orwell Eric Blair, under the pen name George Orwell, wrote two books that chillingly called attention to the inherent iniquities in the communist political-economic approach. While Orwell was a socialist, he was simultaneously wary and fearful of the implications that could arise from a socialist model. In “Animal Farm,” he exposes the natural tendency for those in power to eventually distort otherwise positive revolutionary aims and ultimately abuse their power to the detriment of the masses, all told through an allegory of a community of animals on a farm. In “1984,” a far darker and stark portrayal of a futuristic society, Orwell takes a harrowing look at life in a totalitarian society where even your thoughts aren’t safe from scrutiny and persecution. I recommend these books because many scholars in the political and economic realm have posited that socialism and its ideals are often the last stop prior to totalitarianism. (See Hayek’s book above, “Road to Serfdom.”) The Creature from Jekyll Island, G Edward Griffin Griffin is the master of explaining the arcane and esoteric operations of the Federal Reserve Bank, and walks the reader through a detailed account of how the central bank came to be. Moreover, and perhaps more importantly, Griffin exposes the history of central banking and how its activities have deeply impacted nations, wars, and the course of history. It is the definitive work on the Fed and if you have any interest in understanding what the bank does and why, read this book. Recommended Websites www.fooledbyrandomness.com Official website of Nassim Taleb. You’ll notice the lack of frills (which Taleb proudly champions), but don’t let this fool you – it simply leaves more room for content. And content abounds…from book reviews, to textual interviews, video clips, essays, and other material. You could spend quite some time on this site digesting all of Taleb’s ideas, insights, and media appearances. Unfortunately, a self-imposed media exile due to frustration at having to repeat his ideas with little traction gained remains in place from almost a year ago, so we won’t be seeing new appearances by Taleb for the time being. www.europac.net Official website of Peter Schiff’s investment company. Recently redesigned, this site is a great source of information as well as a practical tool in my opinion. From the information end of things, you’ll find Schiff’s TV appearances, weekly radio shows, Friday editorials, and other media all throughout the site. In addition, you may find yourself lingering on the site during the trading day, as Schiff has included a dashboard of sorts that displays the status of all his major investment areas of interest, using up/down (green/red) arrows and other nomenclature. It’s a great at-a-glance format that could easily come in handy. Of course, the requisite contact methods and forms are available here as well if you’re interested in opening an account with them. www.blackswanreport.com A great website maintained by John Humphrey, a Nassim Taleb/black swan enthusiast. John and I discovered each other when he commented on a post I made to my old blog, Austrian School, discussing black swan protection protocols. I’ve since come to find his website to be extremely useful as a one-stop-shop for all things Taleb. John has aggregated articles, media appearances, Taleb’s Twitter feed, and much more into the site. The other advantage here is that Taleb does not update his site very frequently, so if you’re looking for near-real time updates, check out this site first. www.investopedia.com A robust dictionary and encyclopedia for all things investment and finance. It’s a great resource when you need a quick definition or explanation of an investment concept. The entries are very readable and provide the proper level of detail to give you a solid understanding of the various terms and jargon in the financial world. www.cboe.com Established in 1973 by the Chicago Board of Trade, the Chicago Board Options Exchange is the largest U.S. options exchange with annual trading volume in the neighborhood of one billion contracts by the end of 2007. CBOE offers options on over 2,200 companies, 22 stock indices, and 140 exchange-traded funds (ETFs). Use this website as a resource for all things options. It’s got great tutorials, suggested strategies, quotes and data, and many more resources. If you plan on trading options religiously, you might consider making this site part of your dashboard. www.optionseducation.org Your one-stop shop for options education. Unlike CBOE, this is their primary focus. You can take classes, sit through online seminars and webcasts, and receive quotes. OIC describes its mission as “was created to educate investors and their financial advisors about the benefits and risks of exchange-traded equity options.” Definitely worth checking out this site and adding it to your list of favorites. www.mises.org One of the must-read sites for liberty-focused, Austrian School economist types, this is the official website of the Ludwig von Mises Institute. Ludwig von Mises (pronounced “Meeses”), an Austrian economist and iconic liberal (of the classical sort), is the namesake for the site. Here you’ll find articles and other content that promotes and supports the free market ideal. For an academic-like site, I think you’ll find it highly usable, cleanly formatted, and informative. (For full disclosure, I’m a member of the Institute.) |
