2018 Wall Street Reading List

Oaktree co-founder Howard Marks argues that nobody can forecast the market, but a disciplined investor can judge where we stand in the cycle and tilt the odds. He takes apart the economic, profit, credit, distressed debt and real estate cycles and shows how investor psychology links them, which is the kind of judgment that separates good credit and value investors from the rest.

Mariana Mazzucato asks who actually creates wealth and argues that economics lost the ability to tell value creation from value extraction. Her targets include finance's place in GDP, the financialization of ordinary companies, drug pricing and tech firms built on public research, and her case is one every finance professional should be able to answer.

Former professional poker player Annie Duke argues that life is poker, not chess: every decision is a bet made with incomplete information and some luck. Her central warning, against resulting, or judging decisions by their outcomes, is exactly the discipline investors need when a good process produces a bad quarter.

James Clear's bestselling self-help manual treats habits the way an investor treats returns: small gains, repeated daily, compound into large results. He reduces behavior change to four practical laws and a focus on systems over goals, a useful toolkit for anyone trying to build the daily routines of research, reading and discipline that a career in markets runs on.

Two Wall Street Journal reporters tell how Jho Low, a young Malaysian with a gift for networking, used the state fund 1MDB and Goldman Sachs bond deals to siphon billions into yachts, art, parties and The Wolf of Wall Street. It is the definitive account of the 1MDB scandal and a study of how banks, auditors and regulators let it happen.

A Swedish doctor and statistician, writing with his son and daughter-in-law, shows that most educated people, investment bankers among them, get basic facts about global health, income and population wrong, and wrong in the gloomy direction. The ten mental habits he describes behind those errors are the same ones that warp market forecasts.

Economics journalist Annie Lowrey makes the case for a universal basic income, testing it against the evidence from cash-transfer programs in Kenya, India and Alaska and against the American safety net. A clear primer on an idea that keeps returning whenever automation, inequality or a downturn puts income support back on the agenda.

The former options trader behind The Black Swan argues that a system is only fair and only safe when decision makers bear the downside of their decisions. From bank executives who keep their bonuses after a bailout to forecasters who never pay for being wrong, it is a sharp guide to spotting misaligned incentives in finance.

Michael Lewis looks at what the federal government actually manages, from the nuclear arsenal to weather data to farm loans, and what happened when the 2016 Trump transition ignored it. For anyone who prices risk, it is a lesson in how the dull, unglamorous risk of bad project management can matter more than the dramatic ones.

Yale neurologist Steven Novella and his podcast co-hosts turn years of debunking into a handbook on how memory, perception and reasoning fail, and how to tell science from pseudoscience. Not a finance book, but its chapters on biases, fallacies, free-energy scams and bad science reporting are a sound toolkit for vetting any claim, including an investment pitch.

CNBC anchor Scott Wapner tells the story of Bill Ackman's billion-dollar short of Herbalife and Carl Icahn's decision to take the other side, a five-year fight that played out on live television. It is a close look at activist short selling, and at how being right about a company's business model can still lose money when the regulator, the market and a rival don't cooperate.

Philip Augar's boardroom history of Barclays from the 1986 Big Bang to the Staley era: the feud between those who wanted a global investment bank and those who wanted a British lender, the Lehman purchase, the Qatar rescue, Libor and PPI. It is a close study of how ambition, leverage and weak boards shape a bank's fate.

Bridgewater founder Ray Dalio sets out the template his firm used to read the 2008 crisis: a step-by-step model of how big debt cycles build, break and are resolved, tested against 48 crises from the past century. It is a working manual for anyone who has to position a portfolio, or a policy, when leverage turns.

The Wall Street Journal reporter who exposed Theranos tells how Elizabeth Holmes raised more than $700 million and reached a valuation of about $9 billion for blood-testing technology that did not work. A detailed case study of how a famous board, star investors and retail partners failed at basic due diligence, and how employees and one newspaper finally stopped it.

A former Bank of England regulatory economist and bank analyst sorts financial fraud into four basic types: the long firm, counterfeiting, control fraud and market crimes. He shows how each one exploits the trust that makes commerce cheap. Funny and analytical, it teaches finance readers to think like auditors and to see why every fraud eventually has to grow, or collapse.