In the bond market, the most recently issued Treasuries are known as “on the run.” They are the most liquid, most desirable, and slightly more expensive than the exact same bonds that are not hot off the presses.
As a habitual contrarian, today I want to recommend some “off-the-run” books for you. These are some of the more strange, unusual, and meaningful books I’ve come across as an avid reader of investment literature.
• Early Retirement Extreme by Jacob Lund Fisker
Without question, this is my No. 1 most recommended and gifted book, and I’ve read it myself countless times. Fisker trained as a physicist and retired from salaried work after just a few years as a postdoc. He reportedly continues to live a vibrant and rich life on less than $7,000 per year — and has done that for almost 20 years now. He has sailed, traveled, explored hobbies, and even worked full-time at a hedge fund for a few years for fun, not because he needed the money. While his lifestyle isn’t for everyone, his approach to personal finance and life is mesmerizing, and I feel my mindset adjust each time I read about it. Fun fact: He is the reason the financial independence community is known for eating lentils, though he does not eat them today.
• Capital in the Twenty-First Century by Thomas Piketty
It’s unfortunate that this book, about how wealth inequality evolves in capitalist economies, is so politically divisive. After reading it, I had a much more intuitive grasp of the fundamental meaning of capital and how its quantity and distribution has waxed and waned over the centuries. While I don’t agree with all his conclusions, I highly recommend it — especially to those who don’t think they will agree either. A bonus recommendation: I have the exact same feelings about the late David Graeber’s book, Debt: The First 5000 Years. It’s a fascinating exploration of debt throughout history and its continuing influence on the human experience.
• The Education of a Speculator by Victor Niederhoffer
I have a hard time even describing Victor Niederhoffer’s first book. It’s an investing book, but it’s also a rambling lope through not just the markets but also squash, horse racing, checkers, deception, attraction, music, the depths of the human soul, and much more. Niederhoffer famously worked with George Soros, wears loud pastel clothes, goes shoeless, and gets all his news exclusively from the National Enquirer. He probably would be known as one of the greatest fund managers of all time had he dialed in his risk management and avoided blowing up his fund (twice!). I wouldn’t emulate his trading style, but there is something irresistible here to even the most conservative long-term investor. For bonus Vic, try his Twitter feed @vicniederhoffer. It’s refreshingly unfiltered, unedited, and often completely unintelligible.
• Inside the Yield Book by Martin L. Leibowitz and Sidney Homer
With stocks, you own a tiny piece of the company and your stock closely follows the company’s fortunes. Bonds are different — there’s a lot of math. There’s also a lot of choice — most companies have dozens of different bond issues to consider, and there are about a million unique municipal bonds out there. When people say they want to understand bonds, I direct them here. As the dot matrix graphics suggest, it was written just when bond investing was catching up to the computer age, yet the lessons are timeless. If you read and understand every page of this book, you’ll be well on your way to understanding bonds better than virtually any amateur and most professionals.
Gene Gard is Co-Chief Investment Officer at Telarray, a Memphis-based wealth management firm that helps families navigate investment, tax, estate, and retirement decisions. Ask him your question at ggard@telarrayadvisors.com.
