I majored in Political Science, so how did I parlay my seemingly unrelated major into a 2 year gig at Goldman Sachs? I read a ton of books about finance. Here’s my full throttle finance crash course that took me from knowing literally nothing about the stock market to understanding derivatives, risk, and trading psychology.
I read books from across several business disciplines to round out my business knowledge. Think of this more as a menu of options than a concrete reading list if you want to learn about business in general and finance in particular.
The Neatest Little Guide To Stockmarket Investment (Jason Kelly)
This was my go-to guide for understanding the basics of the stock market. This book taught me how to think about and value stocks using basic industry terminology like growth stocks, dividends, PE ratios, etc. Great for a beginner to get a handle on the fundaments of equities.
A Random Walk Down Wall Street (Burton G. Malkiel)
A classic book and solid foundation for understanding Wall Street. This book will give you a robust grasp of the fundamentals of stock market trends and analysis. The single best part of this book is the chapter explaining all of the bubbles in the history of the financial markets.
Reminiscences of a Stock Operator (Edwin Lefèvre and Roger Lowenstein)
The best book ever written on trading psychology. Written in the 1930s by a trading legend at the time, this book will teach you how to think like a trader, feel the market, and understand how markets act and react.
When Genius Failed: The Rise and Fall of Long-Term Capital Management (Roger Lowenstein)
Single best intro into the fixed income world you can find. This book provides a fascinating story that is also packed with information about bond markets and interests rates.
Liar’s Poker (Michael Lewis)
Required reading for anyone who wants to work in finance. Period. This book is hilarious and entertaining and gives you a great grasp of the psychology of working on Wall Street. People will expect that you have read this if you even consider a career in finance.
More Than You Know: Finding Financial Wisdom in Unconventional Places (Michael J. Mauboussin)
Really insightful read especially if you want to learn about finance from an outsiders perspective. This book is a cross-disciplinary analysis that brings in different fields and ideas and relates them back to finance. A good mix of psychology and statistics with a finance touch.
Lords of Finance (Liaquat Ahamed)
Amazing explanation of global economics and a surprising parallel to the mess we find ourselves in today. This book details the history and causes of the great depression. Excellent read that will really deepen your understanding of global economics and tell an interesting tale.
Black Swan (Nassim Taleb)
Honestly Taleb’s writing really bothers me and I think he’s intellectually arrogant and one of the most annoying and dense writers to read. Not a fan of his book or his writing. That said – you pretty much have to know what a Black Swan is to work or live in a post 2008 crisis world. You don’t have to read the whole thing but you better understand its core concepts.
How to Read a Financial Report: Wringing Vital Signs Out of the Numbers (John A. Tracy)
Simple and easy to use book. This can make financial reports seem much less intimidating for someone with no experience using or understanding them. I still keep this book as a reference.
The Accounting Game: Basic Accounting Fresh from the Lemonade Stand (Darrell Mullis)
Hands down the best book I could ever recommend on learning or teaching accounting. This book takes a child’s lemonade stand and brings you along for the ride – balancing the books and doing all the financial reporting yourself with pen and paper as the lemonade business grows. It’s like an accounting coloring book. The hands on approach is unbelievably effective. I taught myself accounting with this book and later went on to get a near perfect grade in the two college level accounting classes I took at Richmond.
ECONOMICS & GAME THEORY
A Beginner’s Guide to the World Economy (Randy Charles Epping)
First book I read when I started out learning the basics of business. The book really rounded out my fundamentals and taught me basic economic things like how interest rates work, what GDP is, what inflation is, etc. Structured in short mini-chapters almost like blog posts – this book was exactly the tool I was looking for to teach myself the ground level economics I needed before moving on to more advanced reading.
Nonzero: The Logic of Human Destiny (Robert Wright)
One of my favorite books of all time. Regardless of all the tie-ins to economics – this book is a fascinating read that looks at the entire history of human technological and cultural development through the lens of game theory. This will teach you about society, economics, and a dash of game theory. Even if you don’t touch another business book I would pick this up anyway.
The Drunkard’s Walk: How Randomness Rules Our Lives (Leonard Mlodinow)
I used to dread stats class. This book completely changed the way I view statistics and opened my eyes to how powerful they are. A truly interesting history of statistics, randomness, and probability. Great math and econ background reading. This is what Black Swan should have been.
In Defense of Globalization (Jagdish Bhagwati)
This is the next step up from “A Beginners Guide To The Global Economy.” Taking a look at global economics and free trade on a much more detailed level and explaining how the global economy functions. Insightful book that delves into how free trade impacts everything from global capital flows to child labor or the environment.
Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (Steven D. Levitt and Stephen J. Dubner)
This book has been widely popularized but I think it’s a good intro to economics for two reasons. One – it’s a fascinating read and the stories are truly interesting. Two – it shows you how economics break down and analyze date and how to think like an economist when you are trying to solve a problem.
Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life(Avinash K. Dixit, Barry J. Nalebuff)
A book for the game-theory nerds (myself included). If you want to delve into some deep analysis of game theory using real life examples from business and politics – this book is a fun read and will deepen your knowledge substantially.
STILL WANT TO WORK ON WALL STREET?
Getting a job on Wall Street isn’t easy. You have to work your ass off. I read more than 15 books just to learn the basics – that doesn’t count interview prep and everything else that went into my job search.
One last big piece of advice – if you’re looking to get a job on Wall Street you absolutely need to read the Vault Guide To Investment Banking. This will polish off your market and economic knowledge with a few key terms that you won’t find in finance textbooks or classes. The Vault guide helped me understand key market terminology and get that last little edge in my interviews.
Good luck and even if you have no desire for getting a job on Wall Street – there are still some gems in here that I would highly recommend picking up and reading.