My two favorite books of 2014

I’d like to mention two books that stood out for me in 2014:

Nonfiction: The First 20 Minutes. Gretchen Reynolds is a New York Times columnist who distills health and exercise research down to practical, readable advice. I’ve never dog-eared as many pages in a book as The First 20 Minutes. Reynolds writes about why you might want to brush your teeth standing on one foot, work out before eating breakfast, and how pickle juice might help with cramps. Should you get a cortisone shot? Does it help to believe in luck? Does long-distance running make your knees less healthy? Is chocolate milk a good recovery drink? Read the book and find out.

Whether you’re a couch potato or a ultramarathoner, you’ll probably learn something interesting and helpful from Reynolds’ book. Reynolds also writes with the easy readability of a seasoned newspaper columnist, and each chapter ends with bite-sized summaries of what the current scientific research recommends. My only nitpick is that I wish Reynolds had included footnotes pointing to the original research for people who want to dig deeper.

Fiction: As I’ve written before, The Martian describes an astronaut stranded on Mars who needs to figure out how to survive and get home with minimal supplies. Some of the science gets detailed, but the book builds to a very successful ending in my opinion.

What was the single best fiction or nonfiction book you read in 2014?

An investment reading list

If you’ve read Scott Adams’ financial advice and my financial tips in case you win a startup lottery, then you might be interested in a few more pointers to good resources. Some web pages and books:

Don’t Play the Losers’ Game, by Henry Blodget. This is a short, accessible piece that explains why picking individual stocks on Wall Street is a bad idea for almost anyone.

– Website: the Bogleheads forum. An incredibly smart group of people who like to discuss investing, finance, and money. Their investment philosophy page is pure financial wisdom distilled.

A Random Walk Down Wall Street, by Burton Malkiel. This book is remarkably readable, though it can be dense at times. If you believe you can pick individual stocks with enough success to beat a diversified portfolio of low-cost index funds, this is the book you should read to throw a wet blanket on that belief.

The Lazy Person’s Guide to Investing, by Paul B. Farrell. This book will show you how to outperform the majority of active money managers in just 15 minutes a year. This book is seriously good. If I had to recommend only a single book, this book might win: it’s a breeze to read, but it imparts nearly as much wisdom as much denser tomes.

– This is a great description of how Google tried to educate and protect its employees before Google’s IPO. You’ll get most of the idea from the first page. How can you not love an article where a financial advisor admits “We work in the most overcompensated industry in the country”?

The Wall Street Self-Defense Manual, by Henry Blodget. In many ways, this book is a deeper version of Blodget’s article that I linked to above. This book is short, readable, and packed with most of the advice that you need to know.

– If you’re ready to go deeper, consider The Four Pillars of Investing, by William Bernstein. You might also check out Bernstein’s The Intelligent Asset Allocator.

Rich Dad, Poor Dad, by Robert Kiyosaki. This book has its flaws, but it’s very readable and could be good for teenagers or college students. The book uses stories to discuss the goal of financial independence via assets that produce money. I grew up in a family focused on academia, so this book was a good wake-up call that a lot of people care about money, not just getting a Ph.D.

Money and Wall Street stories, color, and culture

– Realistically, I’d recommend almost anything that Michael Lewis has ever written. His most recent book is Flash Boys and I enjoyed that story. But I also enjoyed Liar’s Poker, The Big Short, and Boomerang.

A few more to consider:
– Perfectly Legal (rich people get away with lots of tax loopholes)
– Confessions of a Tax Collector (a tale from inside the IRS when the IRS had more teeth)

There’s also a whole sub-genre of books about rich people:
– Richistan (pretty entertaining)
– The Millionaire Next Door (most millionaires are cheap!)
– Rich Like Them (mostly a bunch of anecdotes from interviews)

Stock Options

Consider Your Options, by Kaye A. Thomas. If you’re joining a startup that offers stock options, I strongly recommend that you study this book from cover to cover. It can help you avoid a lot of treacherous mistakes. If you don’t put in the time to understand your stock options, you might regret it later. Thomas also has a good book called Capital Gains, Minimal Taxes that covers the mechanics of a lot of tax issues and logistics for investors.

– I really recommend Consider Your Options as the definitive work, but An Engineer’s Guide to Silicon Valley Startups, by Piaw Na is very accessible. This book also covers a wide range of skills that you might need if you want to join a startup. Disclosure: I know Piaw from his time at Google.

– I have used Stock Options: An Authoritative Guide to Incentive and Nonqualified Stock Options as a reference for at least one complicated situation.

– Want to understand stock options at a basic level? Stock Options for Dummies isn’t too bad.


– This won’t be popular, but I just don’t find John C. Bogle’s books very readable. I agree with him about lots of things, but his books like Don’t Count on it! just didn’t grab me.

– Hedgehogging, by Barton Biggs. I’m not even going to link to this book–that’s how angry this book made me. Biggs actually writes stuff like this: “My real theory is that the investment superstars have some special magic with markets that enables them almost intuitively to do the right things most of the time.” What hogwash.

Elsewhere in the book (which lists a copyright date of 2006), Biggs quotes someone who accurately identifies the housing bubble: “another bubble is about to burst. Existing home prices have been rising 7% to 8% a year, financed by Fannie and Freddie.” Then Biggs goes on scoff at the guy, like “Look at this dork, predicting a major depression due to a housing bubble in the next three years.” The Wikipedia page on Biggs reports that Biggs’ hedge fund was blindsided by the subsequent global financial crisis. If you want a snapshot of how Wall Street can suck, then you might want to read this book.

– I’m not a big fan of Jim Cramer. If you want to watch Cramer for entertainment that’s great, but exercise caution on his advice.

– Beating the Street, by Peter Lynch. I just don’t think this book has aged very well. You can pick up most of what you need from other books. The advice to “invest in what you know” can be good. However, it also risks becoming “invest in what’s familiar” instead of doing your homework.

So those are some books and websites that I’ve liked or disliked. How about you–what books about investing, money, or finance would you add to the list?