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5 books every financial advisor should read this fall

As the days grow shorter and the cold weather descends, it's the perfect time to sink into a new book and learn something new. 

Our investment strategy team compiled a reading list to help you grow as an advisor, with selections on everything from the inner workings of valuation theory to the psychology of decision making.  

“Thinking in Bets” by Annie Duke

Christian Boinske: While investing and gambling are two very different disciplines, Thinking In Bets provides a great perspective into the randomness of the world we live in. Investing is noisy, so grounding yourself with an understanding of probability and resigning yourself to the fact that your decisions do not always manifest themselves into great outcomes can help you step off the emotional rollercoaster of the market and avoid harmful decision-making traps. 

“Capital Allocators: How the World's Elite Money Managers Lead and Invest” by Ted Seides

Christian: Capital Allocators is an excellent read for finance professionals who want a better understanding of how to manage money. The author, Ted Seides, interviewed 150 elite investors who shared their frameworks, ranging from investment-related functions such as governance and investment process to key business functions like leadership and negotiation. I also enjoyed the final section of the book where the author provides the best 'nuggets of wisdom' from his conversations and interviews.

Christian’s other picks: “Noise: A Flaw in Human Judgement” by Daniel Kahneman 

“Women on Top: Women, Wealth & Social Change” by Haleh Moddasser 

Travis Fairchild: I am a firm believer that empirical evidence should back up the research process. In Women on Top: Women, Wealth & Social Change, Haleh makes a strong case that women want to invest in companies that foster positive change and align with their values. She goes the extra mile to survey hundreds of women to support her claims with data and illustrate which ESG themes resonate most with women. This book also serves as an excellent primer on values-based investing, explaining clearly what it is, how investors can leverage their portfolios for change, and how to align your dollars with your values.

“Investment Valuation: Tools and Techniques for Determining the Value of Any Asset” and “Damodaran on Valuation” by Aswath Damodaran  

Travis: Professor Damodaran is perhaps the most knowledgeable person on valuation theory. He’s also one of the few valuation researchers who effectively describes where valuation theory meets empirical evidence. The two books I listed from Professor Damodaran get into the weeds on the best valuation techniques as well as the pitfalls and biases readers should consider. The icing on the cake is that he goes into great detail on why adjusting for intangibles  can lead to more effective investment decisions.  

“Capitalism without Capital: The Rise of the Intangible Economy” by Jonathan Haskel and Stian Westlake

Travis: Haskel and Westlake ask the critical question of whether valuation models need to be revisited. The book proposes a new way of valuing companies by including  intangibles unlike old valuation models that measure value as a function of only goodwill. This approach rooted in goodwill is fast becoming an outdated way to view the market. The authors illustrate how intangible assets—like software, design, training, and business processes—are increasingly becoming the backbone of our economy. 

Travis’s other picks: “The End of Accounting and the Path Forward” by Baruch Lev and Feng Gu; “Tax Aware Investment Management: The Essential Guide” by Douglas Rogers; and “Grow the Pie: How Great Companies Deliver Both Purpose and Profit” by Alex Edmans

September 22, 2021