Learning About Finance

Malkiel [18] was the first book on investing I ever read; it was published starting in 1973, and is now in the ninth edition. No matter how others may overstate the efficient market hypothesis, still his book is a welcome antidote to snake-oil indicator tracts. In my opinion, the most important book I have yet read on markets is by Mandelbrot [19]; without it I would be hard-pressed to point out the flaws in the strong form of the efficient market hypothesis. As a developer recently departed from academia, I found the autobiography by Derman [20] fascinating for its personal look at software development.

The rest of the texts that follow are much newer to me, though many readers will have encountered them long ago. I list them below to note the debt my colleague, Russ Herrold, acknowledges to them.

Graham [21] is famous as an influence of Buffet, and Lynch [22] [23] is a more accessible starting point for the fundamentalist. Any technician needs encouragement and warnings alike; war stories provide both, and the books by Schwager have them in abundance: [24] [25] [26]. The portrait [27] of Livermore forms a class by itself. At some point, the strategy researcher must consider actual trading algorithms, and here there is much to be said for the classics, in particular the following invaluable works by Keltner [28] Ainsworth [29] and Wilder [30].

Bill Pippin 2010-01-14