The Mother Lode

Every year my local library holds a book sale to get rid of its excess books. I’m not sure why they do this rather than put the books on the shelves for people to check out, but it is a much anticipated event in my household.

The book sale was last weekend and I appeared to have hit the Mother Lode in my shopping. I specifically targeted books that dealt with investing or the history of business. Here is what I came up with:

Reminiscences of a Stock Operator - Edwin Lefèvre

This is the classic book on trading that was first published in 1923, and it has been circulating at Wall Street firms for generations. I was always on the list to get the house copy at every firm I worked for but I always moved on before I could get a crack at it. The legend is that it is about the life of Jesse Livermore, who is widely regarded as the greatest trader who ever lived. I’ve read about 70 pages, and all I can say so far is thank God I didn’t live in his era. If you think that speculators and short term investors are a problem now, it was nothing compared to the early part of the twentieth century.

The Great Wall Street Scandal – Raymond L. Dirks

Before Ken Lay at Enron and Bernie Ebbers at WorldCom, there was Equity Funding, an insurance company that was the darling of Wall Street in the 1970’s and then became the biggest scandal to hit the Street in a generation. Ray Dirks, an analyst, discovered it was a fraud after getting tipped by an employee at Equity Funding. He made it public and then spent the next ten years fighting the SEC over insider trading.

His legal case was a CFA reading when I took Level I, and years later he visited Morgan Stanley, where I was working, and I ended up meeting him. It’s not that easy to face down the legal power of the Federal Government, but he stuck to his guns and he won in the end. The book was co written by Dirks and should be some good reading.

Greenback – The Almighty Dollar and the Invention of America – Jason Goodwin

The dollar has been in the news lately, and I have to admit that I should know more about my own currency. This looks like a very readable history of the dollar from Colonial Times to the present. Did you know that the U.S invented paper currency? That nobody really knows the origin of the ubiquitous $ (dollar sign) - although an enterprising writer tracked its first use to a letter written in 1778?

Of Permanent Value – Andrew Kilpatrick

This one, of course, needs no introduction. It is the story of Warren Buffett, and I am actually ashamed that I haven’t read it yet despite being a fairly hard-core Value guy. This is the 1998 hardcover edition and it runs nearly 900 pages, and doesn’t seem like it leaves out much.

More Next Thursday

This article was written by The Stock Market Prognosticator. You may email questions or comments to me at info@brittaincapitalmanagement.com.