Top 10 books that influenced my life & work:
Do you analyze the market or Mr. Market analyses you? You might say it's obvious that you analyze the market. Think again, please! Do you analyze the chart or after taking a position, Ms Chart starts analyzing you? Historical record of market is identical for everyone, yet our performances so unique. Its true then none of us ever made or lost any money due to the market alone, but the real differentiator is an understanding of our own selves. I and the market together, make a complete functional unit. Have I spent enough time and effort to understand "who I am and how do I behave when I am involved with the market"?
Here is a list of the most influential ten books that have helped me answer varieties of questions relating to these key questions:
10. Technical Analysis Explained, Martin Pring: A comprehensive book on technical analysis that covers everything making it comfortable for a beginner and yet covers enough of each thing making it useful reference even after two decades of practicing this Science and Art, for me. More importantly for me this is the first book on the subject I saw by chance at the Kolkata Book Fair (the world's largest annual book fair) in 1988. Grabbed it immediately since I knew it was Love at First Sight, for sure! The same copy continues to be in my wider collection to date!
9. Atlas Shrugged, Ann Rand: Fiction is believed to be the mirror of society. I would say it can be the crystal ball of the society. Remember the 'Around the world in 80 days' by Jules Verne? Written nearly 70 years ago by Ayn Rand a fugitive from Russia seeking solace into the Capitalist society of America, this novel has fueled more debate and thinking than any other piece of writing in the last century into the pros and cons of Capitalism. Eerie resemblance of imagination of so long ago playing out in the current credit crisis has propelled this book again on the Bestsellers lists. Yet I recommend this strongly as an origin of some of the most powerful debates and questions every investor and trader must ask for herself.
8. Markets, Games, & Strategic Behavior, Dr. Charles A. Holt: How can one chunk the daily routine decisions one undertakes in a life in the markets with such ease and how insightful these games can be in helping decipher our own vulnerabilities is to be experienced reading through this book. One can indulge in a battery of nicely structured games that bring out the semi-conscious and sub-conscious instincts with which we respond to so many actions of ours in markets than based on analytical reasoning. A chart is the same for every Technician and yet each Technician is unique to the Chart. Markets are a human affair. Monkeys, rats, snakes, rabbits et al did not create money. It's a human concept. These games will help one know better the human machine in markets!
7. Trading & Exchanges, Dr. Larry Harris: Whichever approach to markets one may take, i.e. Fundamental, Technical or Quantitative, knowing where one is placed within the food chain of the markets is critical to assess what are the right and the wrong things for each participant. One must know the lunch one is seeking for today and must ensure that one is not himself the lunch of another for today! If there was a universally correct thing to do, markets will stop trading at all! This is a phenomenal read, even though academic yet a highly practical description of every possible market structure, for anyone who wishes to enhance one's competitive understanding of markets and of individual situations.
6. The Alchemy of Finance, George Soros: Pursuit of seeking equilibrium models is the folly of college education. Markets are all the time moving towards and away from equilibrium! Sounds simple? Must read this book to get to in-depth aspects of how the Theory of Reflexivity helps explain every crowd phenomenon including why with the size of stakes that have come to be, cricket matches are not governed by the ability and form of players alone but rather the ability and form of players can be affected by the stakes at hand. No, not a book of market manipulation by any chance. A thinker's book, not for those looking for a do-it-yourself-technology-kit!
5. Education of a Speculator, Dr. Victor Niderhoffer: Who is a champion at everything he has done, has written the most important book ever by any career investor that I have read. The diversity of phenomena from which he teaches how to draw your trading wisdom is awe-inspiring on one hand. The effectiveness with which this biographical masterpiece can turn one into a more able son or daughter is the gift that one can receive while seeking how to become a better Trader, on the other hand. A must read, I would say for anyone seeking to make an effective and happy life alongside a career in the markets.
4. Straight & Crooked Thinking, Robert H. Thouless: Rather than get entwined in the mumbo jumbo of cognitive sciences and the likes, it talks straight to the point practical ways of losing and winning arguments on one hand and is a comprehensive manual of flawed reasoning that still does win. If lawyers can utilize each leaf from this classic to win over any situation despite the facts, why can't Technicians and Traders use each leaf from this manual to get conscious of how the ultimately deceptive lawyer called our own mind is teasing us constantly in winning our minds over away from the facts into ultimately losing money more often than we should?
3. Feeling Good Handbook, Dr. David Burns: In focusing most if not all of the energy in analyzing the market almost all of us ignore the crucial component of knowing oneself. It is the combination of Mr. Market and one's own self that together create or destroy opportunities. Of a very large number of books that proffer self-improvement, psychology etc. etc. I found this one to be very much to the point at each step and yet very comprehensive in covering every key aspect to come to grips with knowing various states of the mind and how they subtly intertwine us with our engagements with observing and acting with the world.
2. Art of War, Sun Tzu: The classical Chinese War Manual that is a must read at every Military Academy in the world still! But why do we need to understand war? Actually this book does not encourage war but to fight it only when necessary. Every decision problem is a challenge of resolving conflicts between limited resources and unlimited number of goals! Every human endeavour and every economic enterprise is about resolving conflicts at every step. Should I take this trade, should I not is a conflict permanently present in a trading life. Must read to improve one's ability to resolve every type of conflict. War is the highest scale of known conflict. Go get it. Will make you a better human being and thus a trader! Why do you wish to fight, when a war is about winning first and fighting later!
1. Bhagwad Gita, Shri Krishna: Do you find the need to get the manual whenever you receive a new electronic device? Is there a manual for life? Here comes then the need for emotional intelligence. Hanuman Ji told Lord Rama at Chitrakoot in Valmiki Ramayan noticing him, Sita Ji and Lakshman Ji in the garb of poor brahmins, "When I come to serve you with my body alone, I am your servant. When I serve you with my body and mind I am your devotee. When I come to serve you with my body, mind and soul no difference is left, you become me and I become you." Bhagwad Gita at its rudimentary level may appear to be a book of religion. But when you bring your body and mind to it, it is the best manual of Emotional Intelligence. When you bring your mind, body and soul together it is the ultimate manual of Supreme Intelligence. To overcome greed and fear are challenges that can take a lifetime and then too it's just the beginning of the road to consistent wealth. To overcome a desire to seek happiness from events a much tougher one and to reach a state of mind where Happiness is the Fuel of Life and no Longer the Destination an ultimate one. Repeated readings of the Gita help reach better states of understanding the self. Most important book influencing my life and thus my karma as a trader and investor!
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