Whether you are getting ready for an internship at a bank, or are trying to break into the industry, or have been doing this for a while, here are 5 diverse books to help you capture the pulse, the vocabulary and some of the concepts you need to learn to walk the walk and talk the talk in Wall Street.
Liar’s Poker By Michael Lewis
Michael Lewis writes a funny, fast-paced novel about his experiences as a rookie bond salesman at Salomon Brothers (now Citigroup) in the late 80’s when the bond markets were taking off. This is the best and funniest introduction to the history of recent modern finance and a book worth reading even if you are not seeking a career in finance but are just mildly curious as to what the fuss is all about.
Barbarian’s at the Gate By Bryan Burrough and John Helyar
Another book to get you educated on the backstory behind another fascinating financial instrument — the LBO. A riveting tale of corporate politics and banking detailing KKR’s buyout of Nabisco in 1988, this book will get you a deeper understanding of the foundation of modern finance. Another page turner.
The Intelligent Investor By Benjamin Graham
Getting more technical now, The Intelligent Investor was first published in 1949 and is a treatise on value investing. This is the basis on which many books were written. A long, dense read at 640 pages, but there is a reason why this book is Warren Buffet’s favorite book through all these years
The Black Swan by Nassim Taleb
Not to be confused with the movie about dancing and betrayal, The Black Swan is the classic book by former options trader, Nassim Taleb. Almost presciently published in 2007, this book elegantly foretold the events that were to follow in years to follow and is a great mix of technical knowledge and good judgment.
For more technically inclined readers, I recommend Nassim Taleb’s incredible technical book on options theory — Dynamic Hedging: Managing Vanilla and Exotic Options. A dense but illuminating read about the complex math of option valuation.
When Genius Failed By Roger Lowenstein
After you sort through two dense technical books, its time again for some financial history. When Genius Failed is another page turner that details the rise and fall of Long Term Capital Management, the first major hedge fund, whose failure nearly brought down the entire financial system as we know it. This is an incredible introduction to the world of hedge funds and derivatives, and in a nice symmetry is almost the sequel to the first book — Liar’s Poker, as both books share the story of the same central character — John Meriwether — collectively across nearly three decades.
Bonus Read: Margin of Safety by Seth Klarman
Seth Klarman is an investing genius and a billionaire who founded the Baupost Group. A student of the Benjamin Graham school of value investing, he wrote an entire book about one of the concepts introduced by Benjamin Graham in his book, The Intelligence Investor. That concept was The Margin of Safety. Klarman published this book in 1991 but it only ran a single print. It was discovered later and became a cult classic. This book now sells for $1000 on eBay. You may be able to find a free pdf online with some aggressive searching.
This is just the tip of the ice-berg. There are so many great finance books that its almost unfair to limit it to just 5. But this would be a great start and a fun read. Good luck, and write in with your thoughts