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My favourite asset management books

Former fund manager David Varley on some paper assets
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Asset management

Some historical perspectives

**Extraordinary Popular Delusions and the Madness of Crowds *by Charles Mackay*

Covers 17th and 18th-century European investment manias, such as the Dutch tulip craze, the South Sea Bubble, and the Mississippi Scheme. The book also includes chapters on other fascinating topics such as the influence of politics and religion on facial hair, the popularity of notorious thieves, and fortune-telling.

**Confusion de Confusiones *by Joseph de la Vega*

This 300-year-old work, the oldest ever written about a financial exchange, looks at the structure of the 17th-century Dutch stock market - but the descriptions of its various participants will seem remarkably familiar to today's investors.

**Where are the Customers' Yachts? *by Fred Schwed Jr.*

Ostensibly an introduction to the Wall Street of the late 1930s, but again is a useful primer for anyone starting out in the business now. It's easily the funniest book listed here, and probably my favourite.

The theory

**The General Theory of Employment, Interest, and Money *by John Maynard Keynes, particularly Chapter 12*

Probably the most-quoted text I came across while working in asset management, and still one of the most relevant. It's interesting to note that Keynes, for all the superlative written work he produced, was a terrible investor of his own money.

**Animal Spirits *by G.A. Akerlof and R. Shiller*

Behavioural finance uses social, cognitive and emotional approaches to attempt to understand the economic decisions of individuals and institutions and their effects on the markets. It's firmly back in fashion in the wake of the 2008 crash - and this is the key recent text.

In practice

**One Up On Wall Street *by Peter Lynch and *Investing Against the Tide *by Anthony Bolton*

Two industry titans, one from either side of the Atlantic, give you the benefit of their experience. Lynch argues that ordinary investors can reap incredible rewards by investing in companies in sectors familiar to everyone, while star manager Bolton reveals how he consistently beat the market for 25 years.

**The Intelligent Investor *by Benjamin Graham*

The only long book on asset management that I'd recommend. Often described as the bible of value investing (that is, the art of making money from low-priced and out-of-favour shares), this tome reads like a set text for a university course on financing and contains lots of excellent stuff. Ben Graham also taught Warren Buffett, which brings us nicely to...

**Shareholder Letters *by Warren Buffett*

Every year he writes a long letter to the shareholders of his company, Berkshire Hathaway, explaining the investments he has made on their behalf. They are available on the Berkshire Hathaway website, and just about everyone who is serious about investment gets round to reading them at some stage.

The great Victorian novels

**Little Dorrit *by Charles Dickens *and The Way We Live Now *by Anthony Trollope*

Both of these classics have plots constructed around the exploits of nefarious financiers (Mr Merdle and Augustus Melmotte respectively). I mention these because I think they're both brilliant, though if you're a harried final-year student I'll forgive you for not wanted to wade through 900 pages (that's each one) of invective about your chosen career path, though you'll certainly learn a lot if you find the time to do so!


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