Classic Historical Books About Wall Street and the Stock Market

by Fred Fuld III

Sometimes history repeats itself. Sometimes it pays to look at the past to get perspective about the present and the future. Sometimes it’s just fun and fascinating to read about what was going on in the investment market years ago.

Here is a list of stock market and Wall Street books written a long time ago, one of which is from the 1800’s. With the quarantine in place, you probably have a lot more reading time. Here is a refreshing change from the “get rich quick in the stock market” books.

Reminiscences of a Stock Operator – first published in 1923
by Edwin Lefevre
This is the classic book on investing, trading, market timing, and crowd psychology, just as true today as it was almost a century ago. It is based on the life of top notorious trader, Jesse Livermore.

My Adventures with Your Money – first published in 1911
by George Graham Rice
About a conman who make money off the early gold mining stock boom.

The PLUNGERS and the PEACOCKS. 150 years of Wall Street – published in 1967
by Dana L. Thomas
Written during the bull market of the 1960s, it provides an entertaining history of the stock market.

Den of Thieves – published in 1991
by James B. Stewart
The “newest” of these old books, it covers the insider trading scandals involving Ivan Boesky, Michael Milken, and other Wall Street financiers during the 1980s.

Storming The Magic Kingdom – published in 1987
by John Taylor
A must read book about the fight for control of one of America’s most famous companies.

Extraordinary Popular Delusions and the Madness of Crowds (1841) by Charles Mackay included as part of Stock Market Trivia Volume 2 (2014)
The Extraordinary Popular Delusions book was written in the mid-1800s. It has many chapters, but most are unrelated to investing, such as alchemy, witches, haunted houses, etc. However, three of the chapters have extensive and entertaining information about three of the largest investment bubbles in history: the Mississippi Scheme, the South Sea Bubble, and the Tulip Mania. These three chapters are included as the last half of the Stock Market Trivia Volume 2 book. (In interest of full disclosure, I wrote the Stock Market Trivia 2 book.) In addition, the trivia book includes such things as the chocolate chip cookie/stock market correlation, celebrity stock indices, weird stock certificates, and more.

Happy reading.

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Startup Myths and Models: What You Won’t Learn in Business School

by Fred Fuld III

The book, Startup Myths and Models: What You Won’t Learn in Business School, by Rizwan Virk is a great resource for those who are considering launching a startup nd those who have already established their startup.

Virk uses an interesting approach to provide advice to startupers, by listing over 20 myths, including bonus myths, relating to startups, and why those myths are wrong, and provides advice relating to these issues and misconceptions.

Just a few of the myths are:

You have to be first to market
A great product and a big market are the most important things
Talk to as many investors as you can
Hire the most experienced people you can find
and many more

My two favorite chapters (myths) were There is No Such Thing as Bad Publicity (a very short but important section) and Startups Are Hard Work.

The author includes numerous real life examples and anecdotes to get his points across.

If you have any interest in creating your own startup, or if you are in the beginning or middle stages of your startup, I highly recommend that you read Startup Myths and Models.

The Retirement Remix: A Modern Solution to an Old School Problem

by Fred Fuld III

The book, The Retirement Remix: A Modern Solution to an Old School Problem, by Chip Munn, offers a new approach to retirement planning. He describes how you shouldn’t have to slave away at a job you hate, socking away as much money as you possibly can and avoiding spending on yourself.

Munn came up with a more modern way to plan for your retirement, without making it a drudgery. He includes several real life examples.

The book goes into detail about changing your mindset, with regard to saving, investing, and retiring. One of the more interesting chapters is Take Your Retirement for a Test Drive.

If you have concerns about retirement, you should read The Retirement Remix.

A Quick Summary of Warren Buffett’s Berkshire Hathaway Annual Meeting

by Fred Fuld III

In case you missed watching Warren Buffett’s Berkshire Hathaway (BRK-A) (BRK-B) Annual Meeting, or if you don’t feel like watching the four and a half hour rerun, it may be easier to see a quick Cliff Notes-like list of important points from the meeting.

Here is a quick summary of the meeting that was held online yesterday, May 2, at 4 pm ET, 1 pm PT.

Buffett started out with a PowerPoint presentation about the history of the United States. He was born during the 1930 depression.

The Depression

Warren Buffett was born August 30, 1930. The day before, the Dow Jones Industrial Average was 240.42, which was up 20% from the 1929 low. On September 1o, 1930, the DJUA reached a high of 245. No one realized that the country was in a Depression yet. On July 8, 1932, the DJIA dropped to 41.22. In other words, $1,000 became $170 in less than 2 years.

The FDIC

If we had the FDIC 10 years earlier, it would have been a much different experience. It was tne good thing that came out of Depression, as over 4000 banks failed. The FDIC has not cost the American taxpayer a dime. It is paid for by bank assessments.

Getting Back to Even

It was January 4, 1951 before the stock market got back to 240.85, more than 20 years to get back to even.

In 1954, the Dow went from 280 to 400 at the end of the year

The stock market provided a 100 to 1 return from 1954 (the year he graduated from college) to today.

Berkshire Business Segments

In regards to Berkshire’s business segments, insurance profit margins have improved due to a reduced number of accidents. Railroad and utilities revenues are down.

Buybacks

Buybacks are good, “when conditions are right.” “It’s a way of distributing cash to shareholders.”

Occidental Petroleum

Admitted mistake in buying Occidental Petroleum. “It doesn’t work at $20 a barrel.” “Production is going to go down in the next few years.”

Airline Stocks

Buffett announced that Berkshire sold all airlines in the portfolio and they were sold at a loss.

Splitting the A Shares

A question was asked about the possibility of splitting the A shares because, the questioner gave an example of needing $60,000 for his retirement, having to sell one share for $300,000 with a cost basis of $100,000, and having to pay a huge capital gains. Buffett explained that it is not an issue as A shares can easily be converted to B shares at any time [assuming without tax consequences, but check with your accountant].

Berkshire’s Past Performance

Buffett said that investing in an S&P ETF is the best way to invest for the long term, and doesn’t recommend buying individual stocks or short term trading. However, one questioner asked why Berkshire has been underperforming the SPY for 15, 10, and 5 years, and even year-to-date. Buffett admitted to the underperformance, and said that no one will work harder than himself and his staff to provide the best performance.

Credit Cards

He said to pay off credit cards; don’t invest until you pay them off. It is the best way to earn 18%. You shouldn’t even be paying 12%.

US Debt Defaults

The US will never default on its debt as long as the debt is issued in US dollars, as it can always print more money.

Government Bailouts

None of the Berkshire businesses have received any government bailouts.

There was a lot more but these were some of the major topics.

If you want to see a list of the Berkshire Hathaway stocks, before the sale of the airline stocks, see the article on What Warren Buffett has Been Selling.

Happy investing.

Disclosure: Author didn’t own any of the above at the time the article was written.