Noah Pepper


Compounding risky rewards

Reasons to study investing

Investing is a generally not a duty one can fully delegate. That is to say - you can hire people to help you but the ultimate responsibility for your financial life has to be on you - the principal.

The most consequential choices you make about investing are deeply personal. You have to choose an investment strategy that won’t rattle you in the bad times, and won’t leave you chasing better results in the good times. You can’t possibly understand what your “Risk tolerance” is without an understanding of financial history.

Understanding asset allocation, portfolio construction, and asset selection will help make sure you’re using your financial resources in a way that will serve you and your family. You need to look out for yourself. The financial world has some really wonderful people - and a lot of sharks. You can’t assess the costs and fees of different products and services without an understanding of the broader financial marketplace

Investing is a fundamental backbone component of our civilization - virtually every building you see, every product you use, all the food you eat - our entire reality - is backed by an intricate network of stockholders, creditors, and deal makers. To understand investing is to understand a key bit of the puzzle of “how the world works.”

Everything on this list is something that I read and found worthwhile.

I’ve adapted the Michelin Star system here to convey how much utility x delight I’ve gotten from each read. There are many investing books I didn’t include here - either because they didn’t do much for me oor I haven’t read them (yet!). Please send suggestions.

*** - Must read book - worth changing your plans to read it this weekend

** - If you don’t have this book - buy it now

* - Particularly Recommended

Investing basics


Investing history

Investing psychology

Particular assets and strategies

Famous investors

Investing Basics

If you only read one book on investing I’d pick The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk. This book provides a comprehensive, beginner friendly, and charmingly written look at the basics of investing. The book walks through the notion of constructing a portfolio and defines key terms. It’s an ideal book for those with less experience who want a practical but high level plan to follow - though I think even experienced practitioners will have much to gain from a read. I love the topic and still re-read this every 5 years or so.


Risk, randomness and uncertainty are arguably the most important concepts an investor really needs to understand. There’s an inextricable link between risk and return (investors, generally, are compensated with returns by taking on risk). How to actually think about risk, differentiate volatility from risk from uncertainty and make decisions about uncertain outcomes is a deep domain with few easy answers.

Against the Gods: The remarkable story of risk is a fantastic book to understand the history of how humans have thought about uncertainty for millenia. The book takes historical approach towards explaining the evolution of probability, statistics, and risk. In a similar vein the book Randomness is also an excellent read (and rather quick).

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets is a classic in the space of understanding risk - the author has strong opinions and has probably done more in the modern era to influence the broader understanding and public discourse around uncertainty than any living thinker.

I think about Radical Uncertainty on almost a daily basis - the authors give some practical frameworks for thinking about what risk is and is not (spoiler: volatility is not risk!). The book can be a bit heavy or technical at times but it’s very much worth it if only to get the idea of “reference narratives” into your mind and into your process for thinking about risk.

Investing History

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance is the best history book about finance that I’ve read. It’s a substantial work with personal stories and details and yet upon completion readers will find a much better understanding of the fundamentals of finance and the broader arc of 20th century history.

A History of the United States in Five Crashes: Stock Market Meltdowns That Defined a Nation is a light and easy read about a not-so-light topic. Possibly the most important skill as an investor is having the temperament to ride out scary episodes of volatility and understanding the historical context of the stock market helps.

The Price of Time is an excellent book for understanding lending and interrest rates and how these have an outsized impact on the rest of the economy, and indeed society. Debt: The First 5,000 Years also gives a foundational view of the history of finance, borrowing, lending for anyone who wants another resource on the topic - though I think Price of Time is better.

Reminiscences of a Stock Operator is a quasi-fictional book about one of the most famous and wild stock market players in history. The book was published in 1923 and will give readers a sense of the early era of trading and an appreciation that the wild speculation we sometimes see in the markets is nothing new.

Barbarians at the gate - and a classic work of financial history. The book gives an inside look at the board room, high level M&A, the history of PE buyouts, and more. Reads like a thriller but it’s financial history.

Bubble in the Sun is a historical account of Florida - and the confluence of speculation and development that led to the creationg of one of the most populous US states out of a swamp during the 1920s boom. Full of amazing anecdotes it is both entertaining and teaches some lessons about how people act in manias.

Central banks are like the sun in our solar system with interest rates being the gravitational field. Two good books on the topic of central banks and interest rates are The End of Alchemy written by a former UK central banker.

Keeping at it is by Paul Volcker, the last Fed Chair to navigate the US through a large rise in inflation and interest rates, about his experience leading the central bank.

Investing psychology

Investing is a psychological and emotional endeavor. Investing in the absence of clear goals is building a road without a destination. A lot of the development of goals can be accomplished by thinking from first principles, and this thinking can be greatly augmented by understanding both personal finance and investing psychology.

How I Invest My Money: Finance Experts Reveal How They Save, Spend, and Invest is a collection of short write ups from various folks in the investing world on how they invest their personal assets. I think this is mostly interesting to see how personal financial decision making is (even for experts) and how diverse the set of strategies is.

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness is by Morgan Housel who is one of the best investing x psychology writers out there. His brand of reflective self awareness really works for me, personally. I enjoyed reading his book so much that I keep extra copies to give friends. I think this is one of the best books you can read in this category.

The Aspirational Investor: Taming the Markets to Achieve Your Life’s Goals is useful as an example of how to orient your investing approach to focus on goals you have.

Just Keep Buying - the book’s title tells you most of what the book will say - but it makes an (important) case against being too bearish. It can be hard to put money to work during tough markets - but this is exactly when you’ll get the best return. A good “reminder of the fundamentals” book.

** The Money Game is a absolute legend of a book. Written by a pseudonymous wall streeter in the 1960s this book is poetic, funny, irrevant, and extremely deep. One of my favourite book of all time.

The Delusions of Crowds is a great book for you to read to find fun ancedotes that will dispell any beliefs in efficient markets. Also a good reminder of just how crazy people can be. Never underestimate people’s ability to be crazy.

Particular assets and strategies

Each book here is a speciifc view on how to invest form the author. Some of these books are broad strategies and some are about very specific niche assets or approches. Useful for anyone who wants to go a bit deeper.

The Intelligent Investor is perhaps the most classic book in the investing world. As may be apparent, the Intelligent Asset Allocator, noted above, is written to rhyme with this book to some degree. While this book advocates an old school value style of investing (looking for cheap and out of favour companies) that has become less popular and less successful in recent years compared to growth investing (look for companies where the business is expanding rapidly) I’d still mark it as a must read. This is a book about understanding the future cashflows of a business and hunting for bargains.

The Four Pillars of Investing by the same author as the Intelligent asset allocator is a great look at a simple indexing approach. Some of the material may be a bit redundant with the intelligent asset allocator but I read and enjoyed both.

100 Baggers: Stocks That Return 100-to-1 and How to Find Them is, despite the slightly kitchy title, a great read on growth investing. The book analyzes sources of outperformance and provides some strategies for finding potential future compounders. Enjoyable read even if you don’t get a 100x return out of it.

The Sleuth Investor is on this list for two reasons: First it provides a set of examples to readers of the sort of deep analysis that professional (or truly dedicated amatuer) investors will go to. Second, it’s humbling to remmeber who might be on the other side of your trade - and this book gives a small but good taste of how deep analysis can go to find an edge.

Particular asset classes have distinct behaviors to understand and I particularly enjoyed The Bond Book, Third Edition: Everything Investors Need to Know About Treasuries, Municipals, GNMAs, Corporates, Zeros, Bond Funds, Money Market Funds, and More and Investing in REITs to understand those particular asset types. Each book walks through how to think about individual bonds or REITs as well as investing in these assets through funds or ETFs. Even if your main focus is in technology and growth I think understanding these assets can be important as it helps one appreciate what competes with growth equity for capital.

The Power Law: Venture Capital and the Making of the New Future is an excellent history of Venture Capital helping give context on the industry. One of the most powrful takeaways for me is how incredibly favourable terms used to be for investors - and how much the power has shifted to entrepenuers. VC may still be a good category going forward - but given how much the capital and term landscape has shifted I think we’re unlikely to see the absolutely wild outperformance of the asset class going forward that we saw over the last 4 decades.

By the same author, More Money Than God: Hedge Funds and the Making of a New Elite, is an entertaining look at the big personalities that formed the hedge fund industry.

Only the Best Will Do: The Compelling Case for Investing in Quality Growth Businesses is a book on the concept of quality growth - essentially trying to find great companies at a fair price.

Engines That Move Markets: Technology Investing from Railroads to the Internet and Beyond is about technology investing - well, actually, it’s especailly about how difficult technology investing is. Even when you can tell that a paradigm shift is under way it can be extraordinarily challenging to pick the right winners and often there is a huge amount of capital burned as firms compete aggressively to grab land in a new area that everyone knows will be a big deal. From the steam engine to the internet this book gives readers many lessons from history.

Famous investors

There’s a huge and popular genre of books written by or about famous and accomplished investors. I’ve just included a few.

The Most Important Thing: Uncommon Sense for The Thoughtful Investor is written by Howard Marks, one of my favourite investment writers. Measured, thoughtful, and a great writer.

Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger is a really entertaining and uniquely compiled book.

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolutionn gives an peek into the world’s most successful hedge fund as measured by annualized return.

Am I Being Too Subtle?: Straight Talk From a Business Rebel is the autobiography of Sam Zell - a legend in the Real Estate business.