Best investment / trading book for xmas
I will kick off
Contrarian Investment Strategies: The Next Generation by David Dreman
Very good read .Dreman makes a persuasive case here that the financial experts and analysts as well as the average investor are terrible in predicting which way the stock market is going. If you want to beat the market, you need to do the opposite of everyone else, by investing in currently out-of-favor value stocks with low P/E ratios.
The section on suprises in the market is very good. One slip by growth stocks can be a disaster (ccp is a recent australian example of this)
Data shows that over time the low P/E stocks outperm the market darlings.
I can recommend this book to anyone , top read
The (Mis)behaviour of Markets...
...by Benoit Mandelbrot and Richard L. Hudson, ISBN 0-465-04357-7, published 2004. Don't ask me where you can buy it, because I had to get my copy from Amazon.
This book is of interest because it brings into finance ideas from other disciplines, in particular the study of turbulence. What does the study of wave profiles gathered by sea ships and the capacity of dams to serve as irrigation feeds for crop growing have to do with the behaviour of markets? In a mathematical sense - quite a lot. And there are practical spin offs which provide insights for investors.
There are lessons to be learned from this book. But they are more along the lines of 'what not to do', rather than a dissertation on some tidy method for 'doing things right'. Partly this is because senior author's Mandelbrot's life work in the term he has coined 'fractal geometery' is still a work in progress. Mandelbrot's ideas are not entirely mainstream. In part I believe this book is written to pique the interest of future generations into carrying on the 'fractal geometery' research line. In Amazon reader reviews, this book is criticised for not providing clear answers. I think this is an unfair criticisim. There is more than enough material there to make you think. And there is no point in tying a whole lot of strands together if they don't naturally 'knot' together. I score this book 8/10.
SNOOPY