Some of my favourite books, with the most recently read coming first – to account for my present bias:
- Thinking in Bets, Annie Duke, 2017. Duke’s varied life makes for fascinating reading and the description of luck and skill when describing her poker career is a close to perfect analogy for our investment decision making.
- Adaptive Markets, Andrew Lo, 2017. Drawing together threads from evolutionary biology, classical economics and behavioural science (among many other areas), Lo’s book is as fascinating as it is ambitious.
- The Wisdom of Finance, Mihir Desai, 2017. Any finance book that can reference Pride and Prejudice and the choices faced by Lizzie Bennet, will inevitably be close to my heart. Desai does a brilliant job of opening up the insular world of finance.
- Influence: The Psychology of Persuasion, Robert Cialdini 1984. The pre-eminent work on how we are influenced and how we can influence others.
- Irrational Exuberance, Robert Shiller 2000. Railing against the efficient market hypothesis, Shiller’s renowned work details how investor / crowd psychology can lead asset prices to deviate materially from fair value.
- Behavioural Investing, James Montier 2007. Now at GMO, Montier was one of the first to shine a light, directly, on the behavioural limitations of those working in the investment industry. —
- Predictably Irrational, Dan Ariely 2008. Ariely is a master at utilising robust research to highlight and address our everyday behavioural foibles.
- Thinking, Fast and Slow, Daniel Kahneman 2011. If you have read one book in this broad field, this is probably it. The Nobel Prize winner is certainly essential reading, but don’t take it as gospel.
- Risk Savvy, Gerd Gigerenzer 2013 . Perhaps underappreciated outside the world of academia, Gigerenzer is excellent on our limitations when thinking about risk and the effectiveness of certain heuristics. Also Kahneman’s most vocal critic. —
- Misbehaving. The Making of Behavioural Economics, Richard Thaler 2015. One of the founding fathers of behavioural economics details the history of the discipline and offers a superior introduction to many key topics.