Finance makes the world go around and it’s really important that everyone understands at least the basics. We have two introductory interviews on finance, one is an Understanding High Finance reading list with journalist and novelist John Lanchester, who taught himself all about it. The other is with Andrew Lo, a leading light in the field and a professor who teaches finance at MIT. Read all the books they recommend (all of them accessible) and you’ll be well on the way to knowing what it’s all about.
There is, of course, a lot of overlap with investment, but if you’re looking for books specifically on investment, please click on our ‘How to Invest’ section.
Financial markets periodically have crises (unfortunately). All our interviews on financial crises can be found here.
At its worst, finance leads to crises and economic dislocation and, yet, it’s absolutely vital to solving many of the problems society faces today. MIT’s Andrew W Lo introduces some of the best books on finance and explains how it can change the world for the better.
The Misbehavior of Markets: A Fractal View of Financial Turbulence
by Benoit B. Mandelbrot
Foundations of Economic Analysis
by Paul A. Samuelson
Why Stock Markets Crash: Critical Events in Complex Financial Systems
by Didier Sornette
Beat the Market: A Scientific Stock Market System
by Edward O. Thorp and Sheen T. Kassouf
The Trouble With Physics: The Rise of String Theory, The Fall of a Science, and What Comes Next
by Lee Smolin
Blaming “the quants” for the 2008 financial crisis is simplistic and short-sighted, says the author of The Physics of Wall Street. He picks five books showing the contribution physics has made to understanding financial markets.
A Brief Popular Account of all the Financial Panics and Commercial Revulsions in the US from 1690 to 1857
by Members of the New York Press
History of Crises under the National Banking System
by O M W Sprague
by Studs Terkel
The Crucial Years
by Dorothea Lange
A Primer on Securitization
by Edited by Leon Kendall and Michael Fishman
Marc Faber, the infamous investor known as “Dr Doom”, discusses books he considers indispensable for those interested in investment. He stresses the importance for investors to be historically aware, and holds that Irving Fisher is one of the best economists of the 20th century.
Modern microfinance was born in the late 1970s, and is now viewed as a key way of helping people in poor countries get out of poverty. Author and practitioner Stuart Rutherford recommends the best books to get a basic understanding of microfinance.