Economics books / reading
Discussion
Hi guys,
I know that there are quite a lot of PHers who work in asset management/finance/banking, wondering I can pick your brains?
I'm a recent graduate and have landed myself a job working for a software company that specialises in asset management/portfolio management software. As a result of this, I've been exposed to quite a few different asset managers/hedge funds and people in different roles (risk/compliance/operations/fund management/analsyts).
I studied computer science at university, but since starting this job I've come to realise that I find finance MUCH more interesting and definitely a career I will enjoy more than technology.
My plan is to try and move into an operations/trade support/fund manangers assistant type role within the next year or so (at which point I will have 2+ years experience in this role).
I'm currently studying for the IMC (Investment Management certificate), but it is more related to fsa regulation etc.
Can anybody recommend some economicsy books to whet my appetite?
I know that there are quite a lot of PHers who work in asset management/finance/banking, wondering I can pick your brains?
I'm a recent graduate and have landed myself a job working for a software company that specialises in asset management/portfolio management software. As a result of this, I've been exposed to quite a few different asset managers/hedge funds and people in different roles (risk/compliance/operations/fund management/analsyts).
I studied computer science at university, but since starting this job I've come to realise that I find finance MUCH more interesting and definitely a career I will enjoy more than technology.
My plan is to try and move into an operations/trade support/fund manangers assistant type role within the next year or so (at which point I will have 2+ years experience in this role).
I'm currently studying for the IMC (Investment Management certificate), but it is more related to fsa regulation etc.
Can anybody recommend some economicsy books to whet my appetite?
I've no idea sorry, never having read a book on economics, so will chip in from a different angle.
If you want a career in finance, try to go for it now. Each day doing that job will be far better experience, for a finance job, than each day doing what you are now.
Secondly, why aim for support, rather than front office? Again, support might offer you a route in, but why choose that over sales, trading, or research?
If you want a career in finance, try to go for it now. Each day doing that job will be far better experience, for a finance job, than each day doing what you are now.
Secondly, why aim for support, rather than front office? Again, support might offer you a route in, but why choose that over sales, trading, or research?
Re applications, I'd say to apply for both Front Office and Middle/Back office (mainly middle) roles, though be very aware that good applications for both will look different. Given your background, MO (particularly techy and trade support roles) might be a place you could get yourself noticed if you put your software skills to use in improving booking and trade capture systems, and automating various processes which go with them, whilst also gaining experience of the products traded. Equally, if you're a dab hand at programming, FO would be very interested.
Without being an arse (and I say this having experienced it myself), getting into FO as an outsider is incredibly difficult - those who do mainly do it through grad schemes, which are themselves about the most oversubscribed you can get - hence, MO may be a more viable (or at least quicker) way in. The move from MO to FO most certainly does happen, as long as you're good and make yourself known to those in the FO you support.
Re books, if it's product knowledge you're after, Hull's 'Options, Futures and Other Derivatives' is pretty much the bible for derivatives. It's a textbook though, so not exactly something you'd want to read on the train. Wiki's also great for anything product or market info related (apart from some of the more exotic stuff).
Drobny's 'Inside the House of Money' (and another more recent one of his) is a good book of interviews with hedgies (particularly those using global macro strategies) which might be up your street.
If you're a complete economics noob (and want something with a pure economics focus), Adam Smith's '...The Wealth of Nations' is probably as good a place as any (short of textbooks) to start. Very old fashioned in its writing, but it starts right from the beginning. Obviously there're plenty of textbooks, but they're pretty dry and boring in the main.
You could also start reading the FT or download FT/Bloomberg apps for your phone to get a feel for what's going on. Plenty of good blogs around as well: Adam Smith Institute, Cafe Hayek, Marginal Revolution, FT Alphaville and so on.
Agree with NorthernBoy as well: you can never get in too early.
Without being an arse (and I say this having experienced it myself), getting into FO as an outsider is incredibly difficult - those who do mainly do it through grad schemes, which are themselves about the most oversubscribed you can get - hence, MO may be a more viable (or at least quicker) way in. The move from MO to FO most certainly does happen, as long as you're good and make yourself known to those in the FO you support.
Re books, if it's product knowledge you're after, Hull's 'Options, Futures and Other Derivatives' is pretty much the bible for derivatives. It's a textbook though, so not exactly something you'd want to read on the train. Wiki's also great for anything product or market info related (apart from some of the more exotic stuff).
Drobny's 'Inside the House of Money' (and another more recent one of his) is a good book of interviews with hedgies (particularly those using global macro strategies) which might be up your street.
If you're a complete economics noob (and want something with a pure economics focus), Adam Smith's '...The Wealth of Nations' is probably as good a place as any (short of textbooks) to start. Very old fashioned in its writing, but it starts right from the beginning. Obviously there're plenty of textbooks, but they're pretty dry and boring in the main.
You could also start reading the FT or download FT/Bloomberg apps for your phone to get a feel for what's going on. Plenty of good blogs around as well: Adam Smith Institute, Cafe Hayek, Marginal Revolution, FT Alphaville and so on.
Agree with NorthernBoy as well: you can never get in too early.
NorthernBoy said:
I've no idea sorry, never having read a book on economics, so will chip in from a different angle.
If you want a career in finance, try to go for it now. Each day doing that job will be far better experience, for a finance job, than each day doing what you are now.
Secondly, why aim for support, rather than front office? Again, support might offer you a route in, but why choose that over sales, trading, or research?
Aiming for support was not only for the purposes of a route in, but also because I didn't think entry straight into a front office role was even possible from my position. Obviously I'd love to jump straight into an equity analyst role or the like, but I want to be realistic.If you want a career in finance, try to go for it now. Each day doing that job will be far better experience, for a finance job, than each day doing what you are now.
Secondly, why aim for support, rather than front office? Again, support might offer you a route in, but why choose that over sales, trading, or research?
I will definitely take on board your going for it now advice.
ZondaMark said:
...
Thanks for the book suggestions, and don't worry, I'm fully aware of the difficulty of getting into the front office without experience. Unfortunately grad schemes are out of the question (I went to a good university, but got a 2:2).Trade support roles are definitely the sort I intend to go for.. Do you have any specific advice / places to look? (So far I've been using cityjobs and efinancialcareers, but there doesn't seem to be too much out there).
Lardydah said:
Trade support roles are definitely the sort I intend to go for.. Do you have any specific advice / places to look? (So far I've been using cityjobs and efinancialcareers, but there doesn't seem to be too much out there).
eFin's always a good place to atart, but it might prove more fruitful to go directly to the recruiters who list on there - if they know you already, you'll probably get first dibs on the spots they offer before they advertise to the masses. If they're any good they'll also help you in preparing for apps and interviews as they'll have greater insight into the sorts of things particular employers are looking for.In terms of MO/BO specialists, I can recommend Maze Executive. Very helpful bunch.
I following are books that I have enjoyed, there are not technical, but have some good background and interesting insights.
The Ascent of Money - Niall Ferguson
More Money than God - Sebastien Mallaby
Money Mavericks - Lars Kroijer
The Big Short - Michael Lewis
When Genius Failed - Roger Lowenstein
Reminiscences of a Stock Operator - Edwin Lefevre
The Greatest Trade Ever - Gregory Zuckerman.
All highly readable, perfect for train journeys.
The Ascent of Money - Niall Ferguson
More Money than God - Sebastien Mallaby
Money Mavericks - Lars Kroijer
The Big Short - Michael Lewis
When Genius Failed - Roger Lowenstein
Reminiscences of a Stock Operator - Edwin Lefevre
The Greatest Trade Ever - Gregory Zuckerman.
All highly readable, perfect for train journeys.
mcflurry said:
Not even Liar's Poker or that Cityboy bio? 
I did read Liar's poker, but I'd not say that it was an economics book; more a primer on what to expect as a junior.
Edited by mcflurry on Thursday 7th July 09:09
Economics books are just so very very boring, which is strange, as living it is pretty exciting.
I would recommend looking on the Willmott forums.
Yes they are aimed at quants / quant developers but they do have some very useful (and basic right up to complex theory) Wiki articles.
If you are a good developer and are able to build on your business knowledge, maybe you could look to move onto a desk as a developer / analyst.
Having worked with some seriously smart guys, I can tell you the ones that are closest to the business, build the best stuff. I have seen them progress on the desk from IT folks to pure Front Office Trading or Sales Brokers. I don't know anyone in research but would be keen to move over to that side myself.
Also, never underestimate the value of being someone that gets on with others well. I don't mean sycophantic or a "yes man" but just someone who is reliable, can take and give s
t in appropriate ratios and has a scooby what is going on around him.
Working for an IDB I have seen secretaries end up as Sales People, Support staff as Brokers (and the odd ex England sportsman end up Broking
)
Yes they are aimed at quants / quant developers but they do have some very useful (and basic right up to complex theory) Wiki articles.
If you are a good developer and are able to build on your business knowledge, maybe you could look to move onto a desk as a developer / analyst.
Having worked with some seriously smart guys, I can tell you the ones that are closest to the business, build the best stuff. I have seen them progress on the desk from IT folks to pure Front Office Trading or Sales Brokers. I don't know anyone in research but would be keen to move over to that side myself.
Also, never underestimate the value of being someone that gets on with others well. I don't mean sycophantic or a "yes man" but just someone who is reliable, can take and give s

Working for an IDB I have seen secretaries end up as Sales People, Support staff as Brokers (and the odd ex England sportsman end up Broking

NorthernBoy said:
I did read Liar's poker, but I'd not say that it was an economics book; more a primer on what to expect as a junior.
Economics books are just so very very boring, which is strange, as living it is pretty exciting.
Liars poker was pretty entertaining!Economics books are just so very very boring, which is strange, as living it is pretty exciting.
His recent book the big short was similarly entertaining, but while he was supposedly describing real events, it still felt more like a story book.
Well Economics is a broad subject. Macro, Micro etc, etc.
Some books above are history books (with the writers subjective understanding colouring the prose), others are trading aka selling books with info on technical details of particular products etc, more finance than economics.
Also many many schools and texts are still stuck in the failed economic mindset of the gold standard which ended in the 70's
Yet not many have realised the full implications of a pure fiat currency and what this means as far as deficits, taxes and bond sales mean.
It would be of benefit to do some reading from pragcap.com and creditwritedowns.com as well as reviewing the works or Wray as per
http://www.amazon.com/Understanding-Modern-Money-E...
I think you will find the review comments of interest. The fact that central bankers have made little to no improvement in the economy is of no surprise if you understand they are misunderstanding the issue. Modern Monetary Theory appears to explain everything much more logically. Its a pity much of the establishment fail to do the same.
Martin Wolf from the FT seems to understand this somewhat as well as a growing number of others.
Anyway, don't stick to the brain dead regurgitated dross of established ideology or you will be wasting your time IMO.
Some books above are history books (with the writers subjective understanding colouring the prose), others are trading aka selling books with info on technical details of particular products etc, more finance than economics.
Also many many schools and texts are still stuck in the failed economic mindset of the gold standard which ended in the 70's
Yet not many have realised the full implications of a pure fiat currency and what this means as far as deficits, taxes and bond sales mean.
It would be of benefit to do some reading from pragcap.com and creditwritedowns.com as well as reviewing the works or Wray as per
http://www.amazon.com/Understanding-Modern-Money-E...
I think you will find the review comments of interest. The fact that central bankers have made little to no improvement in the economy is of no surprise if you understand they are misunderstanding the issue. Modern Monetary Theory appears to explain everything much more logically. Its a pity much of the establishment fail to do the same.
Martin Wolf from the FT seems to understand this somewhat as well as a growing number of others.
Anyway, don't stick to the brain dead regurgitated dross of established ideology or you will be wasting your time IMO.

If you are thinking about roles such as equity analyst or fund manager or anything to do with stock picking generally, I have found the following good reads:
The Little Book that Beats the Market by Joel Greenblatt
You can be a Stock Market Genius by Joel Greenblatt (terrible title but great book)
The Art of Short Selling by Kathryn F. Staley
For an almost unbelievable true story about frauds and mismanagement:
Fooling Some of the People All of the Time: A Long Short (and Now Complete) Story by David Einhorn
I am currently reading but not sure about:
The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks (not THAT Howard Marks).
The Little Book that Beats the Market by Joel Greenblatt
You can be a Stock Market Genius by Joel Greenblatt (terrible title but great book)
The Art of Short Selling by Kathryn F. Staley
For an almost unbelievable true story about frauds and mismanagement:
Fooling Some of the People All of the Time: A Long Short (and Now Complete) Story by David Einhorn
I am currently reading but not sure about:
The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks (not THAT Howard Marks).
ringram said:
Well Economics is a broad subject. Macro, Micro etc, etc.
Some books above are history books (with the writers subjective understanding colouring the prose), others are trading aka selling books with info on technical details of particular products etc, more finance than economics.
Also many many schools and texts are still stuck in the failed economic mindset of the gold standard which ended in the 70's
Yet not many have realised the full implications of a pure fiat currency and what this means as far as deficits, taxes and bond sales mean.
It would be of benefit to do some reading from pragcap.com and creditwritedowns.com as well as reviewing the works or Wray as per
http://www.amazon.com/Understanding-Modern-Money-E...
I think you will find the review comments of interest. The fact that central bankers have made little to no improvement in the economy is of no surprise if you understand they are misunderstanding the issue. Modern Monetary Theory appears to explain everything much more logically. Its a pity much of the establishment fail to do the same.
Martin Wolf from the FT seems to understand this somewhat as well as a growing number of others.
Anyway, don't stick to the brain dead regurgitated dross of established ideology or you will be wasting your time IMO.
Some books above are history books (with the writers subjective understanding colouring the prose), others are trading aka selling books with info on technical details of particular products etc, more finance than economics.
Also many many schools and texts are still stuck in the failed economic mindset of the gold standard which ended in the 70's
Yet not many have realised the full implications of a pure fiat currency and what this means as far as deficits, taxes and bond sales mean.
It would be of benefit to do some reading from pragcap.com and creditwritedowns.com as well as reviewing the works or Wray as per
http://www.amazon.com/Understanding-Modern-Money-E...
I think you will find the review comments of interest. The fact that central bankers have made little to no improvement in the economy is of no surprise if you understand they are misunderstanding the issue. Modern Monetary Theory appears to explain everything much more logically. Its a pity much of the establishment fail to do the same.
Martin Wolf from the FT seems to understand this somewhat as well as a growing number of others.
Anyway, don't stick to the brain dead regurgitated dross of established ideology or you will be wasting your time IMO.


A Random Walk Down Wall Street, a must really.
http://www.amazon.co.uk/Random-Walk-Down-Wall-Stre...
First few chapters are worth the book price alone.
He goes onto describe the biggest bubbles in the past few hundred years.
The rest of it gives you great advice about investing in general. Not too technical, and something that can be read cover to cover.
Depending on what sort of thing you want to trade etc some DE FACTO reference books (the bibles of the finance world) are:
Bonds: The Handbook of Fixed Income Securities By Fabozzi
http://www.amazon.co.uk/Handbook-Fixed-Income-Secu...
Options: Options, Futures and Other Derivatives by Hull
http://www.amazon.co.uk/Options-Futures-Other-Deri...
Econometrics: Basic Econometrics (There is nothing basic about it!) by Gujarati
http://www.amazon.co.uk/Basic-Econometrics-Damodar...
or the 'lite' version:
Essential Econometrics also by Gujarati
http://www.amazon.co.uk/Essentials-Econometrics-Da...
Willmot forums are great. His book on options is very good, even though very technical.
Consider his CQF (cert in quant finance) if you can afford it.
I would look at Mark Joshi's website for great advice, and his books.
Hope this helps.
http://www.amazon.co.uk/Random-Walk-Down-Wall-Stre...
First few chapters are worth the book price alone.
He goes onto describe the biggest bubbles in the past few hundred years.
The rest of it gives you great advice about investing in general. Not too technical, and something that can be read cover to cover.
Depending on what sort of thing you want to trade etc some DE FACTO reference books (the bibles of the finance world) are:
Bonds: The Handbook of Fixed Income Securities By Fabozzi
http://www.amazon.co.uk/Handbook-Fixed-Income-Secu...
Options: Options, Futures and Other Derivatives by Hull
http://www.amazon.co.uk/Options-Futures-Other-Deri...
Econometrics: Basic Econometrics (There is nothing basic about it!) by Gujarati
http://www.amazon.co.uk/Basic-Econometrics-Damodar...
or the 'lite' version:
Essential Econometrics also by Gujarati
http://www.amazon.co.uk/Essentials-Econometrics-Da...
Willmot forums are great. His book on options is very good, even though very technical.
Consider his CQF (cert in quant finance) if you can afford it.
I would look at Mark Joshi's website for great advice, and his books.
Hope this helps.
Sebo said:
Tino, what's your experience of how well received the CQF is Vs the CFA?
Would you say the CQF is stronger for quant / development and the CFA more for research?
Hi Sebo,Would you say the CQF is stronger for quant / development and the CFA more for research?
they are designed for 2 different roles:
The CQF is highly technical, and will teach huge amounts, practical and theoretical if you want to enter the quant world. This will take you 6-9 months. You will still need a Masters (at least) to properly enter the quant world. It is expensive for what it is, so hopefully an employer will pay for it.
The CFA is more broad and is far more recognised worldwide, but it wouldn't open doors for the sort of job the CQF is designed for. This will take you 3 years. I would say this is designed as a 'converter' course, but people will lynch me for this. So say you studied maths at uni, and want to enter the finance world, CFA will get you up to scratch.
It's still a great qualification to have, but I would rather spend 3 years part time on an MBA/MSc (probably get both in that time!) or working towards a PhD.
The CQF is very deep but not very broad.
The CFA is VERY broad, but not very deep.
Hope this helps.
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