Reading Room
Reading books is an essential part of the process at Phoenix. We often get asked for recommendations. In this section we collect together some of
the books that we have found most useful and that are also a good read. We have allocated them relevant category tags so that you can sort them by
the specific subject you are interested in. We aim to keep building this resource; we have thousands of books in our library.
Built To Last
James Collins & Jerry Porras
Over the course of the past 18 years, Jim Collins has written a series of books on different aspects of great companies. All his books are based upon detailed analysis of performance data, background research and interviews conducted by his team. Since 1995, he has been operating from his own research lab where all this work is done. We have found his work very useful in our quest to identify great companies. His insights on leadership characteristics have been very useful. We recommend here what we believe are his three key works: Built To Last (1994) on the characteristics of great companies, Good to Great (2001) on the why some companies become great and How the Mighty Fall (2009) on why some great companies fail and some rise again; an area of great interest to us at Phoenix.
Added: 08/02/2012
Good to Great
James Collins
Over the course of the past 18 years Jim Collins has written a series of books on different aspects of great companies. All his books are based upon detailed analysis of performance data, background research and interviews conducted by his team. Since 1995 he has been operating from his own research lab where all this work is done. We have found his work very useful in our quest to identify great companies. His insights on leadership characteristics have been very useful. We recommend here what we believe are his three key works: Built To Last (1994) on the characteristics of great companies, Good to Great (2001) on the why some companies become great and How the Mighty Fall (2009) on why some great companies fail and some rise again; an area of great interest to us at Phoenix.
Added: 08/02/2012
How the Mighty Fall
James Collins
Over the course of the past 18 years Jim Collins has written a series of books on different aspects of great companies. All his books are based upon detailed analysis of performance data, background research and interviews conducted by his team. Since 1995 he has been operating from his own research lab where all this work is done. We have found his work very useful in our quest to identify great companies. His insights on leadership characteristics have been very useful. We recommend here what we believe are his three key works: Built To Last (1994) on the characteristics of great companies, Good to Great (2001) on the why some companies become great and How the Mighty Fall (2009) on why some great companies fail and some rise again; an area of great interest to us at Phoenix.
Added: 08/02/2012
Why We Buy: Science of Shopping
Paco Underhill
Paco Underhill has spent his life observing shoppers and advising retailers on how to optimise their stores and restaurants. His approach is scientific and well-researched. He shares all that knowledge in this well-written and fascinating book. Essential reading for retailers and for those investing in them.
Added: 30/11/2011
Ogilvy on Advertising
David Ogilvy
David Ogilvy founded the advertising agency Ogilvy & Mather in 1948 (now part of WPP). He wrote this book in 1983 and it is still regarded as a classic in the industry and widely used. He understood both the creative process that creates good advertising and the commercial imperative that makes for a successful agency. An essential read for anyone trying to understand the role of advertising or the industry in general.
Added: 30/11/2011
Thinking, Fast and Slow
Daniel Kahneman
Kahneman and Tversky led the field of behavioural psychology with their work on judgement under uncertainty and prospect theory. Kahneman received a Nobel Prize for this work in 2002 but Tversky had died in 1996. In this book written in 2011, Kahneman brings together a lifetime of his work, that of others as well as the latest developments in neuroscience to give an overall explanation of how we think. The result is a masterwork and it is likely to be the definitive text in the field for some time.
Added: 30/11/2011
Reminiscences of a Stock Operator
Edwin Le Fevre
Although written as a novel, this book tells the story of Jesse Livermore, who was an extraordinary US stock market operator in the 1920s and 1930s. Edwin Le Fevre tells the story brilliantly, giving the reader the benefits of the knowledge, wisdom and lessons of Livermore's life and career. 80 years on, the lessons in psychology and market behaviour have lost none of their validity. Although Wiley have produced recently a heavily annotated edition with lots of extra materials, we would strongly recommend starting with the original.
Added: 27/10/2011
Warren Buffett Portfolio
Robert Hagstrom
Robert Hagstrom is best known for writing The Warren Buffett Way about Buffett's approach. We think you can get that better from the horse's mouth through reading Buffett's annual letters. This book though sets out the underlying thinking behind focused value investing. He considers it mathematically and psychologically and the result is a very useful manual for a concentrated investment approach. Hagstrom took what he learned and has applied it to fund management at Legg Mason where he works.
Added: 27/10/2011
Priceless
William Poundstone
William Poundstone has written ten books and he is yet to write a bad one. In Priceless he deals with the psychology of value, i.e. how we think about price and value and how that is distorted by our biases and heuristics. The book includes a history of this field of behavioural psychology. His books are always well-written, entertaining and educational.
Added: 27/10/2011
Fortune’s Formula
William Poundstone
Ultimately this is book is a history of the Kelly Criterion, a formula from probability theory regarding optimising the size of a bet. To get there, Poundstone gives us a history of the science of information theory and a cast of some very interesting characters. From John Kelly and Claude Shannon of Bell Labs to Ed Thorpe of card-counting fame (who also used the Kelly formula successfully at his hedge fund). The formula sizes your stake based upon how much you will win (edge) and how likely winning is (odds).
Added: 27/10/2011
Checklist Manifesto by Atul Gawande
Atul Gawande
Having written two very readable books about medicine and surgery, in this book, Gawande focuses on one particular aspect that has wider application which is the use of checklists to improve performance. He demonstrates how the airline industry has used checklists to incorporate past lessons and best practice into current processes in order to avoid repeating mistakes. He also uses examples from medicine and complex property construction. His writing is compelling, educational and inspirational. He has influenced our processes at Phoenix.
Added: 27/10/2011
The Value Imperative: Managing for Superior Shareholder Returns
James M. McTaggert
When company managements ask us for reading suggestions, this is always first on the list. It is quite hard to translate a desire to manage for shareholder value into the detailed operations of a complex business. This book shows you how to do it, how to build internal processes that optimise shareholder value. The authors have practical consulting experience and the result is both a readable and usable text.
Added: 27/10/2011
The Rational Optimist
Matt Ridley
This book expertly explains the dynamics of human progress. Matt Ridley pulls together knowledge from history, economics, psychology, evolution and genetics to explain the causes of Man’s remarkable economic progress and why we should expect it to continue. A lot of the thinking in this book underpins our model of how the world works.
Added: 27/10/2011
The Most Important Thing
Howard Marks
Probably the most useful value investing book written in the past decade. Howard Marks condenses a lifetime of experience-based knowledge and wisdom into this book. Drawn from a series of memos he has written over time, it contains a complete framework for how to think about and undertake rational value investing. His chapters on risk (5, 6 & 7) are particularly good.
Added: 27/10/2011
The Intelligent Investor
Benjamin Graham
If there is a bible of value investing then this is it. Ben Graham is the father of both value investing and securities analysis. First published in 1949, the edition to get is the revised fourth edition published in 1973 which also includes an excellent essay by Warren Buffett, "The Superinvestors of Graham-and-Doddsville". I love Graham's writing style but if you find it a bit quaint or dry then the key chapters for investment philosophy are: 1. Investment versus Speculation: Results to Be Expected by the Intelligent Investor, 8. The Investor and Market Fluctuations and 20. "Margin of Safety" as the Central Concept of Investment.
Added: 02/10/2011
The Innovator’s Dilemma
Clayton M. Christensen
The best book we have come across that describes how the process of innovation can destroy businesses, especially good ones. Using compelling case studies of companies and industries, he demonstrates the process by which disruptive technologies undermine leading incumbents. He followed this book with The Innovator’s Solution which shows how managements can cope with the dilemma.
Added: 02/10/2011
On Competition
Michael Porter
The study of competition has been the life work of Professor Michael Porter and this 1998 book contains all his key essays on the subject up to then, including his famous 1979 Harvard Business Review article "How Competitive Forces Shape Strategy" in which he first introduces his concept of five basic forces governing competition in an industry. If you are trying to understand the concept of "barriers to entry", then this is one of the key works on the subject. His work and writings have had a profound impact on managements and governments for decades.
Added: 02/10/2011
Valuation: Measuring and Managing the Value of Companies
Copeland et al
Company valuation is a dry subject but the book that does it best is this one. It is not only a ‘how-to’ manual, it also provides the philosophical and empirical underpinnings for various approaches. The book is useful both for the analyst and for the manager because it shows how the levers of value creation can be measured and improved. The edition referred to above is the third edition (2000) which is my favourite but it is probably wise to start with the latest edition, currently the fifth (2010), because it will take account of changes to accounting standards. The authors change but it is all co-ordinated by McKinsey & Co. from where they all originate.
Added: 02/10/2011
Titan: The Life of John D. Rockefeller, Sr
Ron Chernow
This book has all the key ingredients of a great book: a fascinating subject, extremely thorough detail of research and a compelling writing style. On one level, it's the story of a remarkable man but it’s also the history of the oil industry and Standard Oil. Ultimately, it recounts a key period of US economic history. Rockefeller was retired for the last 40 years of his life and his philanthropic contribution to modern medicine is probably unrivalled. This might be the best biography you ever read.
Added: 02/10/2011
Buffett: The Making of an American Capitalist
Roger Lowenstein
This is still my favourite biography of Warren Buffett and the first that I read. Lowenstein has an enjoyable writing style and he tells his story well. What makes the book though is the subject and his remarkable life. In terms of understanding his investment philosophy, the Berkshire Hathaway Chairman's Letters are a better source but if you’d like to understand the person then I'd recommend this book.
Added: 02/10/2011
The Alchemy of Finance
George Soros
Soros is probably the world's finest macro investor and what Benjamin Graham would call a speculator. However, Soros considers himself part investor and part philosopher. In this his first book, published in 1988, he introduces his economic Theory of Reflexivity which proposes a model for markets where there is a disequilibrium between the perception of participants and underlying realities. Both exert forces upon the other. His theory is I believe a more credible explanation of market behaviour than the "efficient market hypothesis" that underpins much of modern finance theory. The book contains a section where you see the theory at work as he annotates his trading activity in 1985 -86.
Added: 02/10/2011
Investing the Templeton Way
Lauren Templeton & Scott Philips
John Templeton was one of the greatest value investors of all time and one of the pioneers of global value investing. He died in 2008 aged 95 and this book was completed just before his passing. It’s written by his great niece and as well as telling us the story of his life, the book explains his investment philosophy and how he applied it.
Added: 02/10/2011
The Great Crash
JK Galbraith
The best history of the most famous boom and bust of all time. Galbraith is not just a chronicler, he seeks to understand causes and effects so that ultimately he is able to draw lessons. You end up with a clean anatomy of a bubble and crash presented in a way that it will help you identify them in the future.
Added: 02/10/2011
A Short History of Financial Euphoria
JK Galbraith
If you were only going to read one book of economic history to improve yourself as an investor, it would be this one. In the course of this short work Galbraith lays out how the markets really progress; not efficiently, but as the product of crowd psychology, a factor that if you ignore will hurt you but if you are aware of it will save you from loss and present you with opportunity.
Added: 02/10/2011
The Effective Executive
Peter Drucker
Nobody has written more intelligently about the purpose and role of management. In the Effective Executive, Drucker sets out how an executive can be truly effective by adopting certain habits of mind such as knowing how they spend their time and focusing on results and not work. At the heart of his teaching is the idea that effectiveness comes from concentration, focus and prioritisation. The book is an essential read for any knowledge worker.
Added: 02/10/2011
Security Analysis
Graham & Dodd
Security Analysis in all its versions is the ultimate text book for anyone who wants to be a serious analyst and dedicate time to estimating the value of a security like a bond or a stock. Written by the father of the profession and value investing, the first version was written in 1934 and is heavily influenced by the recent history of the Crash of 1929 and the Great Depression. The benefit of the later editions is that they contain more contemporary comment and examples. It’s currently in the 6th edition but we wouldn't recommend going beyond the 3rd edition which was the last one that was genuinely produced by the authors. The book is heavily weighted towards bond analysis but from this you understand how essential that is to understanding the value of equity.
Added: 02/10/2011
Poor Charlie’s Almanac
Charles Munger
No book in our library contains more worldly wisdom than this book a collection of the thoughts of Charlie Munger, Warren Buffett's partner at Berkshire Hathaway. It's worth getting the latest edition because each revision has added something new and taken away nothing. He has an incredible mind and he is able to condense the most complex ideas into a simple useable form. It's a book you can read many times.
Added: 02/10/2011
The House of Morgan
Ron Chernow
Through the history of the Morgan banking dynasty, from its beginnings in London with George Peabody in 1835 through to the life of JP Morgan, you get 150 years of economic and banking history told with gripping precision and attention to detail. The product of years of scholarly research, this book manages to be both a thorough history and an enjoyable read.
Added: 02/10/2011
The Panic of 1907
Bruner & Carr
The study of the Panic of 1907 is a great way of understanding the process by which a banking crisis unfolds and how it impacts the real economy. The way in which it is stopped is also informative. What happened in 2007-2009 has a lot of parallels with 1907-8. The book is well-researched and well-written.
Added: 02/10/2011
Tipping Point
Malcolm Gladwell
Gladwell writes modern social science extremely well using enthralling anecdotes. In the Tipping Point he deals with the way that big new ideas or behaviours emerge from small initial starting points in a way similar to medical epidemics. For those interested in how to think about extrapolating current trends into the future and anticipate changes and threats then this is highly valuable material.
Added: 02/10/2011
Margin of Safety - Risk-Averse Value Investing Strategies for the Thoughtful Investor
Seth A. Klarman
In 1991, Seth Klarman laid his approach to value investing in this excellent book. He focuses on minimising downside through a highly conservative approach at the expense of upside. He shows you how he achieves this through the margin of safety, portfolio construction and hedging strategies as well as showing where and how he looks for opportunities. This book has been out of print for some time and second hand copies are available online for c. $1,000 but we have heard of .pdf copies circulating.
Added: 13/09/2011