Reading That Pays

Recently, the USD lost 3 % vs the EUR in a single day. In forex markets, such a move is an earthquake, the biggest drop in 7 years.

If you wondered, why the EUR became so strong that day, thanks to the net you could choose between hundreds of sites and read about it – free of charge.

But I doubt, the readers really got what they wanted. In general the reporting was about “what happened” – the more interesting part “why it happened” was covered either too superficial or too complicated.

Media theorist Neil Postman, who believed that new technology can never substitute for human values, described this syndrome as ‘over-newsed but under-informed”.

If you are an investor, you could lose a lot of money being constantly distracted by superficial ‘news’ and thereby miss the real information you can use.

You have to learn to triage – to find the valuable needle in the haystack of news.

If you’d expect me to provide you with a free online ‘ready-to-use-package’ for capital markets, I have to disappoint you. There is no plug-and-play for investing – at least not for successful investing.

The same way you work your body to get in better shape, you have to work for your investment success. Work, sounds not so appealing, I know, but even Lionel Messi goes to the training ground every day.

If you want

• to learn, what’s really important for a successful investor and what’s just a useless distraction
• to get interesting thoughts about capital markets
• to find new perspectives about probabilities of failure or success
• or simply enjoy great written financial stories and still learn a lot about the mechanisms of the markets then switch off the iphone and the laptop, retire to the salon, and read the 10 books, every new investor should know. It’s reading that pays.

1. The Intelligent Investor” Benjamin Graham, 1949

2. “The Essays of Warren Buffett Lessons for Corporate America” 1997

3. “The Little Book of Common Sense Investing” John Boogle, 2007

4. “The Most Important Thing. Uncommon Sense For The Thoughtful Investor”, Howard Marks, 2011

5. “Devil Take the Hindmost: A History of Financial Speculation”, Edward Chancellor, 1999

6. “Against the Gods: The Remarkable Story of Risk”, Peter Bernstein, 1998

7. “Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets”; Nassim Nicholas Taleb, 2001

8. “When Genius Failed”, Roger Lowenstein, 2000

9. “Too Big Too Fail”, Andrew Ross Sorkin, 2010

10. “The Big Short”, Michael Lewis, 2010

You see them day by day. Graphs, charts or diagrams are frequently used to make complex information more understandable. In marketing language, they have a high ‘communicative effectiveness’.
But they are often misleading, if you don’t know, how to read them.
A few of the biggest lies with statistics – coming up in the next chapter:

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