More advanced books on investing?

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FrugalPatat
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Joined: Sun Dec 03, 2017 6:22 am
Location: Belgium (Europe)

More advanced books on investing?

Post by FrugalPatat » Sat Jun 30, 2018 5:44 am

I currently read general books on investing but am wondering if there is any more advanced material out there that might actually have an impact? I keep wondering about financial mathematics for example; in 2011 I had one introductory course in university on option pricing but this kind of course was entirely focused on playing with the math & computational aspects in isolation of the economics; this stuff seems pretty much irrelevant for me personally. Is there any point in studying financial mathematics as a personal investor that only wants to spend about a few hours a week on 'investing' (whether it be reading books or putting money in the portofolio)?


FYI when I talk about 'general' books I mean the likes of:

I read:
-bodie's investments
-four pillars of investing
-the investor's manifesto
-all about asset allocation
-a random walk down wallstreet
-common sense on mutual funds
-the permanent portfolio
-fooled by randomness
-the black swan

Currently reading (or ready to read):
-the misbehaviour of markets
-the big short
-a demon of our own design
-investment analysis and portofolio management
-value averaging
-economics (campbell)

IlliniDave
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Joined: Wed Apr 02, 2014 7:46 pm

Re: More advanced books on investing?

Post by IlliniDave » Sat Jun 30, 2018 6:31 am

The only suggestion I would make is maybe something along the lines of The Bogleheads' Guide to Retirement. It wouldn't add anything new as far as investing, and isn't particularly advances; but it extends a little more into overall personal finance and things to consider when planning to live a few decades w/out work income. I can't say I even recommend it per se, it's probably due for a new edition and is very US-centric anyway, but perhaps there is a similar title that is more applicable to wherever you intend to ER.


jacob
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Re: More advanced books on investing?

Post by jacob » Sat Jun 30, 2018 12:30 pm

No reason to delve into financial math. If you're already good at STEM, fin-math is a cakewalk and thus some concepts might be clearer if presented that way. However, investing often gets on feeble ground once you're required to express something beyond addition and subtraction.

Once the basics are covered (see blog post with curriculum), I think time is better spent going for breadth and [historical] depth. I like to read popular investment books---not the ones you listed---but ones from different decades where hindsight tells us why and how they failed... and then compare to what people believed at the time that the books were written and sold to a mass audience.

You can pretty much count on the psychology of humans staying constant---it's a stationary distribution. Therefore you can pick any era for your data points. The patterns will be the same.

arcyallen
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Joined: Sat Jan 20, 2018 11:20 am

Re: More advanced books on investing?

Post by arcyallen » Mon Jul 02, 2018 10:40 am

jacob wrote:
Sat Jun 30, 2018 12:30 pm
I like to read popular investment books---not the ones you listed---but ones from different decades where hindsight tells us why and how they failed... and then compare to what people believed at the time that the books were written and sold to a mass audience.
I love the book "The Mutual Fund Masters" that was written in 1995. It's commentary from a group of managers that were killing it at the time, but all for different reasons. There's a Peter Lynch in there, but there's also lots of turds who were wildly successful during the run-up and then crashed and burned later. Reading the "Rabble Rabble!" hooplah before it's clearly hooplah is helpful so we can identify the next round of noise as noise.

Also check out "Millionaire by Thirty: The Quickest Path to Early Financial Independence " to see a nice version of how to make a killing buying houses, refinancing them and buying more and more all financed. It was originally written in 2008 right before the housing meltdown. The "half full" glass analogy they discussed was actually pretty helpful in seeing loans/equity in a different (albeit dangerous) light.

Again, the next meltdown/bubble is always around the corner - being able to read books like these helps me try to be aware of it.

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