When I watch expert investors giving interviews from home on a Zoom call, I always hope to get a glimpse of the books on the shelves behind them. I’ll pause the video and try to decipher the titles in their personal libraries. Maybe, just maybe, reading what they read will help me (and you) think a little more like they do.
Recently, I spoke with prominent investors and asked them a simple question: What books should someone read if they want to become a better investor? Their answers were wide-ranging and practical. What follows are their recommendations, edited for clarity.
Start with the Basics: Numbers and Clear Thinking
David Abrams, Founder, Abrams Capital, recommends Innumeracy, a short book by John Allen Paulos. “People don’t understand how numbers work,” he says. For Abrams, “the first step” in investing is to become more fluent with numbers. Without that, he argues, “you aren’t going to make a lot of progress in finance.” You do not need to be “a brilliant mathematician,” but you do need to understand “something about numbers and how math works.” With that foundation, he adds, “the financial stuff then becomes easier.”
He also recommends Black Box Thinking by Matthew Syed. The title refers to the black box in airplanes. Abrams’s point is that the airline industry records and studies its mistakes, in contrast to many industries that bury them, such as medicine. For those interested in self-improvement, he says it is a valuable idea to consider. The book also argues that sometimes looking at the data that is not apparent is as important, or more so, than the data that is obvious.
Reflect on Human Behavior
William Bernstein, Co-Founder, Efficient Frontier Advisors, recommends two books. One is Joe Henrich’s The Secret of Our Success. “It’s about human beings—how we operate, how our brains work, and how different societies function.”
The other is Expert Political Judgment by Philip Tetlock, which examines what separates good forecasters from poor ones. “What you really learn is that there are almost no good forecasters,” he observes.
Wisdom From “The Oracle” Himself
Abrams and Tobias Carlisle, Founder, Acquirers Funds, recommend reading Warren Buffett’s Letters to the Shareholders of Berkshire Hathaway. They are available for free on the internet and reading them is like getting an MBA, says Carlisle.
“I think that a lot of the stuff that they teach in the MBA is silly—and I did a business degree,” he quips. “They taught me a lot of silly stuff that sort of put me on the wrong path. But I was fortunate that I had read Buffett’s letters when I was about 17 years old.”
Ric Dillon, Founder, Vela Investment Management, also recommends Buffett’s letters but a curated version. “For people who are really interested in investments, the best book is The Essays of Warren Buffett: Lessons for Corporate America,” he notes. Lawrence Cunningham, the book’s author, compiled decades of Buffett’s letters into a coherent roadmap for sound investing and strong corporate governance.
“It is priceless,” he says, adding, that even though that’s what he did, “you don’t have to read it cover to cover.” At one point he went to Barnes & Noble bookstore, bought all the copies, and gave them to his board members and executives. “It is by far the best book I’ve ever read in finance generally, and in investments in particular.”
Adapt to Complex, Shifting Markets
Bernard Horn, Founder, Polaris Capital Management, suggests Andrew Lo’s book Adaptive Markets. Investing is like sailing, and the winds are always shifting, he says. “The conditions and the environment that you are investing in are constantly changing and becoming more sophisticated over time. We’re living in a world where things are changing very rapidly.” Advancements in technology and science are moving very quickly, he points out.
“If you don’t keep getting better educated throughout your career, somebody else may take advantage of you. It is a competition. You have to constantly keep evolving.”
On Cognitive Behavior, Discipline, and Strategy
Barry Ritholtz, Founder, Ritholtz Wealth Management, says Daniel Kahneman’s Thinking, Fast and Slow is the first book he recommends to anybody who asks for a book about investing. “You realize your brain is part of the problem. It isn’t the Federal Reserve; it isn’t the secret cows controlling the market. It is your brain. You weren’t built for this—you were built for surviving on the Savannah.”
A second recommendation, Charlie Ellis’s Winning the Loser’s Game, compares investing to playing tennis. Ninety-nine-point nine percent of people who play tennis are amateurs; only a tiny fraction are pros, he says. “And pros win in very specific ways—they serve aces, hit with power, paint the lines, and pull off elegant drop shots.”
This contrasts with how amateurs play and win, he notes. “We double fault. We hit the ball into the net. We attempt a fancy shot and miss. Most amateur matches aren’t won by scoring points—they’re lost through unforced errors.”
If you focus on staying within your limits, returning the ball, and avoiding mistakes, you’ll do well in tennis—and even better in investing. Trouble arises when investors believe they can consistently pick winning stocks or superior fund managers. Most can’t.
Cautionary Tales Every Investor Should Know
Roger Lowenstein’s When Genius Failed, is a fascinating book, says Tom Sosnoff, Founder, thinkorswim and tastytrade. “It is about Long-Term Capital Management and the Nobel Prize winners who wrote the Black Scholes model and then almost blew up the markets.”
He also recommends Where Are the Customers’ Yachts? by Fred Schwed. It’s essentially about a tour of the old Merrill Lynch offices in Battery Park, overlooking the Hudson River. A Merrill guy is showing a visitor all the Wall Street guys’ yachts. The visitor looks out and asks, “Well, where are the customers’ yachts?” The Merrill guy replies, “Yeah… there aren’t any of those around here.”
It’s a reminder that intelligence, models, and prestige can’t protect you from reality. It’s an absolute Wall Street classic.
Stay Curious, Humble, and Agile
Taken together, the recommendations point to a simple idea: becoming a better investor requires stronger judgment, intellectual curiosity, humility, and a willingness to learn from history.
