Seven wealth managers share their summer reads
Eustace Santa Barbara, co-manager, Marlborough Special Situations fund
One Up on Wall Street by Peter Lynch
Written in 1989, many of the simple lessons packed into this book are still as applicable today as they were then. Fund manager Peter Lynch ran the Fidelity Magellan fund between 1977 and 1990, and under his tenure as a devoted stock-picker it became one of the largest and most successful funds in the US. Overflowing with pithy wisdom, several well-articulated views include: keep your eyes open and invest in companies you understand; run an extremely diversified portfolio, as long as its constituents pass your criteria; and small and under-researched companies can exhibit superior growth for longer periods than larger, better known companies.
Shattered by Jonathan Allen and Amie Parnes
If 2016 will be remembered for its political surprises, there will be plenty of books in the future discussing both the UK’s decision in the referendum on European Union membership and the US’ decision to elect Donald J. Trump as its 45th president. Shattered is a gripping analysis of the latter. Through unparalleled access to and extensive interviews with key individuals in the Clinton campaign, these political journalists present a different inside view than many might expect. Clinton’s connections to the political, commercial and media establishments build both an outsized campaign fund and a universal confidence that to many outsiders belies a fractious, disjointed and ultimately doomed campaign.
James Horniman, portfolio manager, James Hambro & Partners
Irrational Exuberance by Robert Shiller (third edition)
Fed Reserve chief Alan Greenspan coined the term ‘irrational exuberance’ in December 1996 to describe frothy markets – allegedly after a briefing with Nobel Prize-winner Robert Shiller. In 1999 Shiller sat down to write the first edition of this book, explaining in some detail how markets were overpriced, despite ‘experts’ claiming the dawn of a ‘new economic era’. Publication coincided neatly with the bursting of the tech bubble. This third edition, updated with fresh warnings on bond and property prices, continues to challenge sweeping assumptions and shines a harsh light on investor fallibility at a time when we see pockets of irrational exuberance emerging once more in markets. If you are bored on the beach this will pour cold water on any sun/tequila-induced investment folly.
Boiling a Frog by Christopher Brookmyre
In the third instalment of the Jack Parlabane series the Scottish investigative journalist finds himself in prison while the country is at the centre of a sleaze and morality debate. Part thriller, part satire, these books have a pleasing whiff of P.G. Wodehouse about them. The title comes from the idea (untested personally) that if you put a frog in a pan of water and bring the water gently to the boil, the frog will not attempt to escape. Perhaps a reminder of investor complacency as market temperatures rise, but that’s Shiller’s story. Warning: not one to read on a crowded beach as you’ll elicit strange looks quietly chuckling to yourself in your deckchair.
Robin Kyle, investment manager, Tcam
A Hedge Fund Tale of Reach and Grasp by Barton Biggs
A friend bought this for me before emigrating to New Zealand. The book is an excellent parable on the dangers of becoming wedded to a particular investment style. Biggs is a great writer and the book isn’t too heavy going for the beach.
I am Pilgrim by Terry Hayes
This is Hayes’ debut novel and possibly the most entertaining work of fiction I’ve read since Harry Potter! The plot focuses on a US spy trying to prevent a major terrorist attack, and is set in a number of glamourous locations – the classic formula for a holiday read. Persevere through the first hundred pages and the story really heats up!
Ben Kumar, investment manager, Seven Investment Management
Superforecasting by Philip E. Tetlock and Dan Gardner
The premise here is simple. Experts (financial, political, sporting) tend to be no better than random when they make predictions. In fact, much of the time they are worse than random. The author, Philip E. Tetlock (a professor of social science), then identifies groups of people who are better than average at forecasting – some of them a lot better. He analyses them, individually and together, and comes up with a list of characteristics they share. There are no shortcuts offered: it comes down to research, hard work and intellectual honesty. This book shows you how to build a process around that.
Shantaram by Gregory David Roberts
What’s Shantaram about? Oh, just the normal, everyday semi-autobiographical tale of an escaped Australian bank robber living in 1980s Mumbai. A book the author wrote in prison. Three times. Because the prison guards kept destroying it. It’s a massive freewheeling story of love and drugs, of violence and religion, of gangsters and motorbikes. It is 900 pages long and leaves you wishing there were more. I’ve read Shantaram roughly once every 12 months since my friend handed it to me, and there aren’t many other books I’ll do that with.
Mark Northway, investment manager, Sparrows Capital
Winning the Loser’s Game by Charles D. Ellis
A required read at Sparrows Capital by one of the most respected authorities on stock investing, Charles D. Ellis, who lists some of the most common traps investors fall into. Ellis presents the cold, hard facts about important changes in the market over the past 50 years, why succeeding with active investing has become more difficult, and how you can outperform markets for steady, long-term growth. The book is in its seventh edition and remains at its core relevant and full of sound advice for the individual investor.
As Kingfishers Catch Fire: Books & Birds by Alex Preston
I must admit I have selfish reasons for recommending this book, which was written by my cousin Alex Preston. However, the book, poetic and beautifully illustrated by Neil Gower, is a sumptuous literary compendium of birds. His first book (This Bleeding City, a finance-based novel) is also interesting, because Alex used to work for Gordian Knot, ABN Amro and Carlyle. Kingfishers Catch Fire is definitely a labour of love, and is intended to be ‘the most beautiful book of 2017’.
Eunan Carr, independent financial adviser, Chase de Vere
The Ascent of Money: A Financial History of the World by Niall Ferguson
My all-time favourite. A very easy read of the history of what a lot of people find very boring for some reason! From the banking dynasty who funded the Italian Renaissance to the stock market bubble that caused the French Revolution, this is the story of booms and busts as it’s never been told before. Written by financial historian Niall Ferguson, this entertaining history of money gives a whistle-stop tour of some of the biggest events in history through a financial lens.
The Gene: An Intimate History by Siddhartha Mukherjee
The book doesn’t have much to do with figures or fiction. It’s good to take a wider interest, and it is actually not far removed from how asset values react to human randomness! I highly recommend it, and although it sounds intellectual it is a very down-to-earth account of the history of discovery of genetics. Written by Pulitzer Prize-winner Siddhartha Mukherjee, author of The Emperor of All Maladies: A Biography of Cancer, this book, which was published in May, is already a New York Times bestseller.
John Butters, CIO, Weatherbys Private
Superforecasting by Philip E. Tetlock & Dan Gardner
Philip Tetlock is famous as the author of Expert Political Judgement, in which he explored the forecasting success of political pundits and also discovered that they were generally beaten by simple algorithms. In Superforecasting, Tetlock looks at the prediction problem the other way around: he ferrets out some great forecasters, and then explores how they do it. Essential reading for any investment professional.
James Clavell’s classic novel is loosely based on the experiences of the English sea pilot William Adams in 17th century Japan, during the foundation of the Tokugawa shogunate. Clavell manages to tell a swashbuckling tale at a ripping pace while painting a highly evocative portrait of the culture and Zen-influenced aesthetics of the Samurai caste.
Shogun by James Clavell