10 Books Every Trader Should Read

Devil Take The Hindmost

By Edward Chancellor

In the Devil Takes the Hindmost, Edward Chancellor examines the nature of speculation. He begins in medieval Europe and goes all the way to today’s internet craze.

Chancellor looks at both the psychological and economic forces that guide people to invest their money in markets. He also looks at how markets are manipulated, made and unmade and who wins when speculation runs rampant.

Chancellor’s book provides a great history of markets. He does not attempt to explain how to curb financial speculation. He sees it as a force of nature and not as greed or something that should be limited or prevented. Chancellor’s book is another truly interesting read.

Manias, Panics & Crashes

A History of Financial Crises

By Charles Kindleberger

In this novel, Charles Kindleberger finds that there is a common thread between manias, panics, and crashes. He finds that market crises have always shared greed and desire.

This book can be thought of as a warning, reminding the reader that what goes around comes around. Kindleberger's brilliant history reveals how financial crises follow a nature-like rhythm: they peak and purge, swell and storm.

It provides an intelligent and entertaining account of the history of crises, speculative manias and Lehman Brothers, this book has been hailed as a true classic. It is both timely and timeless.

The Crash of 2008 and What it Means

By George Soros

In the most disastrous financial crisis since Great Depression, Soros writes about the causes of the crisis and proposes solutions to confront it.

Soros places the crisis in the context of his time and studies how individuals, as well as institutions, handled the boom and bust cycles that are now so prevalent in today’s global economic activity.

Soros also puts forward a conceptual framework for understanding human affairs in general and financial markets. This book helps the reader understand the great credit crisis and its implications for our nation and the world.

The Wisdom of Crowds

James Surowiecki

In the Wisdom of Crowds, Surowiecki presents a surprisingly simple idea: Large groups of people are smarter than an elite few.

Soruwiecki says that there are four essential elements that form a popular crowd opinion: diversity of opinion, independence, decentralization, and aggregation.

He also identifies the types of crowd wisdom as cognition, coordination, and cooperation. Surowiecki uses the benefit of crowd knowledge across all types of topics such as popular culture, psychology, ant biology, politics, and behavioral economics.

His idea may seem simple but it presents an important lesson for how we live our lives, select leaders, run companies, and think about the world.

Lords of Finance

The Bankers Who Broke The World

By Liaquat Ahamed

It is believed that the Great Depression was caused by events beyond anyone’s control. Ahamed rejects this idea. He believes it was decisions made by a small number of central bankers that resulted in the largest economic meltdown in American history.

In the Lords of Finance, we meet the bankers who made these decisions. After World War I, these bankers attempted to reconstruct international finance. They were untired by their common fear of inflation as the greatest threat to capitalism, as well as a common vision that the solution was to turn back the clock and return to the gold standard.

In the beginning of their strategy, it appeared they were correct as world currencies were stable and capital flowed freely throughout the world. However, eventually the gold standard became a restraint, and the world economy began a downward spiral that would ultimately be known as the Great Depression.

Lords of Finance is a important reminder of the enormous impact central bankers decisions can have and the dire consequences when they are wrong.