Summer reads for quiet market months, August 2018

August tends to be a very quiet month for markets, as investors jet off on their holidays. If you don't have any plans to go away and want to put your time to good use (or maybe you're really dedicated and want to swat up on the sun-lounger or during your flight), we've asked a handful of fund managers for their favourite investment books.

Alastair Mundy: The Little Book that Builds Wealth by Pat Dorsey

Alastair, who heads up Investec UK Special Situations fund, said The Little Book that Builds Wealth provides a good analysis of 'economic moats' – a term coined by Warren Buffett referring to advantages which protect companies against competitors.

“Dorsey examines the difference between real and ‘mistaken’ moats, highlighting the mistaken moats as “great products, strong market share, great execution, and great management,” he said.

“Dorsey argues that the first three characteristics are insufficient to ward off competitors and that great management, whilst useful, is much easier to pick after the event than before. However, the harder-to-replicate characteristics of real moats, for instance intangible assets (brands/patents), high switching costs and cost advantages, are far more durable.

“Dorsey’s analysis encourages us to think about those companies with long-term competitive advantages versus those temporarily in a sweet spot,” he said.

Richard Hallett: China's Asian Dream by Tom Miller

Richard, who heads up the Chelsea Core Selection-listed Marlborough UK Multi-Cap Growth fund, recommends China's Asian Dream – which was written by the managing editor of China Economic Quarterly. 

“China sits at the heart of the Asian growth story, which no serious investor can afford to ignore,” Richard said. “The rise of the middle-class consumer in Asia is one of the key long-term structural growth themes in our portfolio and many of the stocks we hold have global franchises with exposure to Asian markets.

“By helping us understand China, its ambitions and what they’re likely to mean for Asia, and indeed the rest of the world, Miller provides valuable insights into the future of the global economy. To his credit he accomplishes this in a book that is also an excellent read.”

Hutch Vernon: Simple But Not Easy: An Autobiographical and Biased Book about Investing by Richard Oldfield

Hutch runs the Chelsea Selection-listed Browns Advisory US Flexible Equity fund.

“As this book says in the forward, this is a common sense guide to the art of investment,” he explained. “It is useful to investment managers and in particular to their clients, be they investment committees of institutions or individuals.

“Written by a successful practitioner, Simple But Not Easy is full of practical advice that is often far from the industry consensus.”

Nigel Ridge: The Great Crash, 1929 by John Kenneth Galbraith

Nigel Ridge, who heads up Chelsea Core Select-listed BlackRock UK Absolute Alpha, said his favourite book is The Great Crash, 1929.

It depicts the economic history of the events leading up to the Wall Street Crash, and author Galbraith's argument is that it was caused by the widespread belief that people can become rich without working.

Nigel said: “This book is not necessarily one for optimists or those who don’t think history has a habit of repeating itself. But, it is interesting for anyone who thinks that the further back you look into history, the further forward you can peer into the future.”

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The managers' views are their own and do not constitute financial advice.

Published on 06/08/2018