Seth Klarman’s Recommended Books on Investing

Seth Klarman is an American private equity investor and founder of the Baupost Group, a Boston-based private investment partnership firm. Seth is himself the author of a renowned book on value investing: “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.” One of the world’s most respected value investors, he once said,

It is important to remember that value investing is not a perfect science. Rather it is an art, and necessitates dealing with imperfect information. Knowing you will never know everything must not prevent you from acting. It requires a precarious balance between conviction, steadfastness in the face of adversity, and doubt, keeping in mind the possibility that you could be wrong.

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  Too Big to Fail: Andrew Ross Sorkin provides an account of the development of the 2008 financial crisis. The subtitle is “The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves”
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  Buffett: The Making of an American Capitalist: Roger Lowenstein is a fabulous biography of Warren Buffett, arguably the best investor in the history of the world.
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  Mr. Market Miscalculates: The Bubble Years and Beyond: James Grant analyzes the deregulation of the financial system and the capital markets since the 1970s and how it led to the housing bubble and the inferior creditworthiness standards.
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  Money of the Mind: How the 1980s Got That Way: James Grant on how money has ever more become a government-sponsored illusion that aims to beat the natural risk apparatus of a strong credit market system.
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  When Genius Failed: The Rise and Fall of Long-Term Capital Management: Roger Lowenstein details what brought down the amazingly successful bond-trading hedge fund Long-Term Capital Management.
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  The End of Wall Street: Roger Lowenstein examines the excesses of the financial system, particularly Fannie May and Freddie Mac, the legislative failure to oversee them, and the failure of the three major rating agencies to identify the liabilities of the mortgage securities — all culminating to the financial collapse of 2008.
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  The Intelligent Investor: The Classic Text on Value Investing: Benjamin Graham is a reprint of the original 1949 edition that has inspired legions of investors over the decades. According to Warren Buffett, this classic book is undoubtedly the best book ever written on investing.
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  The Aggressive Conservative Investor: Martin J. Whitman, Martin Shubik provide an investment philosophy based on value investing and risk analysis based on book value and stock price.
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  Bernard M. Baruch: The Adventures of a Wall Street Legend: James Grant tells the story of extraordinary Bernard Baruch, financier and stock investor and philanthropist. Following his success in business, Bernard devoted his time as a diplomat and advised many U.S. Presidents on money matters.
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  You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits: Joel Greenblatt provides a general idea of event-driven investing involving unusual securities and how unusual securities can present great investment opportunities.
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  Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor: Seth A. Klarman on using the concept of margin of safety to manage risk in value investing, on investing vs. speculation, and various aspects of overall portfolio management.
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  The Big Short: Inside the Doomsday Machine: Michael Lewis how the U.S. economy was driven over the cliff and the 2008 crash of the U. S. stock market because of the housing and credit bubble.
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  Moneyball: The Art of Winning an Unfair Game: Michael Lewis on inefficiencies in the market for sports players and how the brilliant use of statistics and creative thinking made Oakland A’s, previously one of baseball’s poorest teams, win many games.