In How To Invest, David M. Rubenstein, legendary co-founder of the private equity firm Carlyle Group, offers a master class on investing featuring conversations with some of the most reclusive and successful figures in finance, drilling down to distill their disciplines, habits and practices. Organized by asset class, we meet Larry Fink (fixed income), Sam Zell (real estate), Ray Dalio (hedge funds), Sandra Horbach (private equity and buyouts), Betsy Cohen (SPACs), and David Blood (ESG). Of particular interest to WealthManagement.com readers is chapter 4, which details how Mary Callahan Erdoes rose to the top of J.P. Morgan’s wealth management division, now overseeing more than $4 trillion in assets. Also recommended is the introduction, in which the author—no slouch of an investor himself—presents notes on his own investing craft. For Rubenstein, that emphasis on “craft” is critical. He insists that investing is an activity involving skill in making things by hand; that the craft can be learned by emulating the masters; and that the masters, like all successful craftspeople, have skills and disciplines in common.

“You will find a career in investing much more rewarding if you believe that [investing] is beneficial not only to you but also beneficial to your society, your economy, and your country. If you see investing only as a way to make more money than is possible in another profession, you will never have the intensity, drive, and joy needed to be successful in this line of work. And you will miss much of the joy of investing (and life).” 

There was a time when General Electric was the most admired company in America. It was one of the original 12 companies listed on the Dow Jones Industrial Average. It actually invented things. In the 1950s, to a degree that would stun today’s workers, GE shared the wealth, offering job protection, generous benefits and retirement security. Then Jack Welch came along as GE’s eighth chief executive officer and single-handedly embarked on a slash-and-burn program to cut costs and remake the company in his own image. Welch’s practice of ranking employees against each other smashed GE’s culture. His fetish for financialization led to many missteps. In 1986, Welch directed GE Capital to acquire the investment bank Kidder Peabody. Soon after, Kidder was implicated in a series of scandals—remember Ivan Boesky?—that saw its chief arbitrageur led away in handcuffs. Readers will meet a young, impressive Jack Welch and then watch with revulsion as he becomes a monster. Post retirement, his personal PR machine secured him a perch as a widely read “thought leader” on business and politics, where he was not above engaging in disinformation: In 2012, Welch, who presided over a company where fiddling with the numbers was commonplace, accused President Obama of fiddling with a strong monthly jobs report. The book traces Welch’s toxic legacy through the travails of companies—Home Depot, 3M, Boeing—led by his protégés. With Boeing, Gelles connects the dots between Welch’s management style and the Boeing culture that led to the fatal 737 Max crashes in 2018 and 2019.

“More than anyone else, it was Welch himself who created the schism between the Golden Age of capitalism and the unequal, unsustainable era of shareholder primacy in which we now live. He was the first CEO to take a healthy company and treat it like a turnaround job, preemptively laying off tens of thousands of workers and kickstarting the era of mass downsizing, outsourcing, and offshoring. He was the first who brought to his job a singular focus on quarterly earnings, and employed financialization, earnings smoothing, buybacks, and everything else in his power to see that GE stock price continued to rise.”

In 2018, we selected Annie Duke’s book Thinking in Bets for this list. Now Duke is back with a book to remind investors that quit may often trump grit. The central message of Quit is that success rarely comes from stubbornly sticking to a course of action. Success lies in picking the best course to pursue and quitting the rest. Advisors are well aware that another name for grit is bullheadedness. Duke offers dozens of examples to suggest that quitting is often the better option. On the way to this conclusion, Duke rallies research on how expected value theory can support the decision to quit. The endowment effect bias, elegantly discussed in chapter 7, has obvious applications to investor quitting behavior. Selling an asset you own is the equivalent of quitting; you are quitting your ownership. If you can’t justify buying the asset for the current price, it’s best to quit it.

“When the world tells you to quit, it is, of course, possible you might see something the world doesn’t see, causing you to rightly persist, even when others would abandon the cause. But when the world is screaming at the top of its lungs to quit and you refuse to listen, grit can become folly.”

Advisors live in a world where success often depends on the ability to make numbers actionable. Unfortunately, most clients regard numbers as a foreign language. Making Numbers Count shows that numbers need to be translated into instinctive human experience to become meaningful. This book offers advisors over 30 principles designed to make numbers easier to understand. Chapter headings include: “Convert Abstract Numbers Into Concrete Objects” and “Avoid Numbing by Converting Your Number to a Process that Unfolds Over Time.” As numbers get larger, they get diluted—and they don’t have to have a lot of zeros. For example, clients are thrilled when they earn their first $1 million, but the seventh $1 million is less thrilling, and the 77th may go unnoticed. Almost every page features a boxed example of the power of translation. For example: The authors translate “Six Sigma is 3.4 defects per million objects,” into a memorable story: “To achieve Six Sigma as a baker, imagine baking a batch of two dozen chocolate chip cookies every night. You could do that for 37 years before finding a cookie that was burned, raw, or doesn’t have the perfect number of chips.”

“The secret to translating numbers is simple: avoid using them. Translate them into concrete, vivid, meaningful messages that are clear enough to make numbers unnecessary.”

George Soros, the philanthropist and champion of the Open Society, got his start as a fabulously successful investor. At 91, Soros still looms large on the global stage, and yet the man himself is surprisingly little understood. Biographers have attempted to tell the story of George Soros, but no single account of his life can capture his extraordinary, multifaceted character. This collection of essays starts with an examination of his investment philosophy. Recommended is the essay by Ford Foundation President Darren Walker who connects the dots between Soros’ philosophy, financial genius and his philanthropy. Peter L.W. Osnos has assembled a variety of informative essays from financiers, public intellectuals, journalists and nonprofit leaders to paint a picture of the man in full.

“Other tycoons amass billions by building institutions: think of Sam Walton of Walmart or Jeff Bezos of Amazon. Even within the world of money management, the great fortunes have generally been made by companies that achieve scale. Such as BlackRock or PIMCO. But Soros dispensed with all this paraphernalia. He built no company, developed no algorithm, possessed no intellectual property that could be bottled and sold. He made money—extraordinary amounts—from what he mysteriously called ‘the alchemy’ of finance.”

Jamie Fiore Higgins is a rare example of a female managing director at Goldman Sachs. Her long tenure (she worked at Goldman from 1998 to 2016) ended with her managing many of Goldman’s top equity clients. But success didn’t protect her from abuse. The book is maddening for its accounts of gender discrimination, antics unworthy of high school and sexual bullying. Higgins doesn’t shy away from detailing her own culpability in tolerating such behavior, nor the terrible costs it exacted on her and her family. Such was the cost Higgins felt she had to pay to fit into the toxic pre-#MeToo culture of financial firms in the 1980s. The book is a good illustration of the precept that when you violate your values for the sake of fitting in, the end result is everyone likes you except yourself. We recommend the book because it gives readers a glimpse into the inner workings—both impressive and deplorable—and the secret power dynamics of Goldman Sachs.

“Although I could study [colleagues’] lifestyle and eventually earn a salary to mildly afford it, I didn't think I could live in it, and I wasn't sure I wanted to. The country clubs, the fancy restaurants, the Broadway shows, the laissez-faire attitude, the casual sex with each other, the cocaine, this strange world that seemed to operate with different rules but rule so much more of society. I couldn’t give myself a blue blood transfusion.”

Conflict and tension define the client-advisor relationship. The conflict between expectations and reality, the tension between risk and reward. The magic of Holding the Calm is a gift for any advisor who can lean into its discipline. “Holding the Calm” has two elements. The “Calm” is the place where clients feel heard, understood, valued and safe to make conflict resolution possible. “Holding” requires creating and sustaining the space for the calm. For advisors, it generally means that they be the adult in the room and to keep their emotions in check. The book is filled with bite-size practices for defusing conflict from an author who comes out of a mediation background. For example, Holding the Calm is reinforced just by using inclusive personal pronouns. Instead of saying, “How do you want to respond?” ask, “How do you think we should respond?” Also: clarify generalities like always or never. Speak into the ears that hear you. Remember that overtly expressed self-interests often are not accurate. Find the motivating self-interest. For instance, to many parties not losing is more important than winning.

“Holding the Calm is an active yet simple way to create space for possibilities, drain the swamp of toxic emotions, fully let someone be seen and heard, and defuse tension so solutions can be found.”  

As the Federal Reserve battles today’s inflationary conditions, we can’t ask for a better guide than Ben S. Bernanke, the former chair of the Fed as well as the recipient, most recently, of the 2022 Nobel Memorial Prize in Economic Sciences. Now, this book is not easy reading and won’t soon be the source material for a Netflix miniseries. But for a detailed history of Federal Reserve policy and a vigorous defense of quantitative easing in response to the 2008 financial crisis and then again during the recent COVID-19 pandemic, this book provides advisors with a granular peak into the famously insular Fed culture and how its decisions create big movements in the markets. The book will have many critics who believe that Fed policies create asset bubbles, establish moral hazard and contribute to income inequality. Bernanke acknowledges these criticisms but parries with defenses that are more or less persuasive. As the Fed copes with current economic conditions, it will be seen whether the policies that Bernanke promoted are equal to the challenge of controlling the highest sustained inflation in 40 years.

 “The voting rules of the Federal Open Market Committee (FOMC) are convoluted. Of the 19 governors and presidents who attend and participate, only 12 vote at any given meeting. The seven board members and the President of the Federal Reserve Bank of New York vote at every meeting. The remaining four votes rotate annually among the other 11 Reserve Bank presidents. This complex design allows the Regional Reserve Bank presidents a voice but gives the majority to the politically appointed board members.”

Leadership is difficult when teams work in the same physical space. Leading remote and hybrid teams just makes a difficult task more challenging. The ultimate goal of leadership is identical to what advisors always strive to do: add value. Think of a team as a portfolio. The essence of leadership is to help the people on the team become more valuable by providing the conditions for them to add value. Advisors who supervise teams large or small, in the office or remotely, or just want to be their best selves will benefit from this compact leadership guide. The power of Leadership Two Words at a Time lies in the way executive coach and author Bill Treasurer integrates essential leadership practices in three sections—Leading Yourself, Leading People, Leading Work—with two-word headers such as Trust First, Aspire Higher, Gain Control, Nurture Talent and Lead Up. Treasurer’s language in the book is direct, clear, inspiring, and often funny, a departure from the jargon that fills most leadership books.

“Always remember that your job as a leader is to leave people better off than you found them. Your individual leadership success is contingent upon you making others successful. While you want to have a positive influence on everyone you touch through your leadership work, your leadership fate will be mostly determined by your influence over the success of the people you lead … and how successful you help your boss become.”

What is trust? A strong confidence in the reliability of someone. An arrangement whereby a person (a trustee) holds an asset as its nominal owner for the good of the beneficiary. All true, but as this intricate novel suggests, trust is an elusive entity that is mostly magic. The novel—actually four ingeniously interconnected novellas—opens in 1937 with the story of Benjamin Rask, a Wall Street bond speculator and tycoon in the mold of J.P. Morgan. We are in the satire of late-stage capitalism. Rask is described thus: “Because he had enjoyed almost every advantage since birth, one of the few privileges denied to Benjamin Rask was that of a heroic rise.”  

Subsequent sections recount Rask’s genuine infatuation with a remarkable woman who may be even a greater investor. We then have the story, some decades later, of the ghostwriter who is hired to write Rask’s memoir. We get an intimate glimpse into the well-cushioned world of the one percent and the power they have to pull strings that drive markets. Trust is less about who ends up with the most toys and more about the fight over who gets to control the narrative and whether the narrative can be—there’s that word again—trusted. In the end, the book recognizes the human costs of all Rask’s financial manipulations. That Rask cannot even imagine that his fortune might hide untold misdeeds is the ultimate corruption. As James Baldwin observed, it is the innocence that constitutes the crime.

 “Capital is an antiseptically living thing. It moves, eats, grows, breeds, falls ill and my die. But it is clean. … The larger the operation, the further removed [Rask] was from its concrete details.”

The subject of the book is really inequality. Of the French economist Thomas Piketty, the author of Capital in the Twenty-First Century, selected as one of the best books for this list in 2014, we can only be grateful that his latest book, which details the origins of inequality and his recommendations for fighting it, is at a quarter of the length of his last. Piketty is convinced that unchecked inequality dooms capitalism. His prescription for ensuring a sustainable level of equality is radical. The solution starts with tax rates that are virtually confiscatory. But for Piketty, redistributing income is insufficient. Only policies that redistribute property have the power to redress global income inequality. Piketty calls for “inheritance for all,” a program which is just as radical as it sounds. He summarizes his various proposals as “participatory socialism.” He argues that all of the progress in the world—increases in longevity, a dominant middle class, high levels of education and voting rights, dignity in aging—can be traced to progressive taxes on income and wealth that fuel the comprehensive programs of the welfare state. Still, he insists, economic growth alone cannot solve the problem of inequality. Only a significant undermining of property rights once considered sacred (such as the abolition of slavery) can make a dent. Piketty is a historian as well as an economist. He understands that stewards of property never relinquish their prerogatives except by force: wars, revolutions, economic depressions and natural disasters. Maybe, just maybe, this time it can be done without bloodshed, but it won’t be easy. “The idea that there might be only winners is a dangerous and anesthetizing illusion that must be abandoned immediately,” Piketty warns.

“Resistance by elites is an ineluctable reality today, in a world in which transnational billionaires are richer than states, much as in the French Revolution. Such resistance can be overcome only by powerful collective mobilizations during moments of crisis and tension. Nonetheless, the idea that there is a spontaneous consensus regarding equitable and emancipatory institutions, and that breaking elites’ resistance would be sufficient to put these institutions in place, is a dangerous illusion.”

As a money manager, Adam Seessel was a dues-paying value investor in the mold of his heroes Benjamin Graham and Warren Buffett. This book came about in the wake of his conclusion that he was leaving money on the table by pursuing “cigar butt” investing, a term Buffett coined to describe buying beaten-down mature companies trading below a conservative assessment of their liquidation values. He argues that the metrics that value investors have been using need updating. Where the Money Is describes a new assessment model that the author argues more appropriately values tech-based growth companies. The “BMP” model is like a preflight checklist that considers three central variables: the quality of the business (B), the quality of the management (M) and the price (P). The first variable is the most critical as a target business must have a low market share, a large and growing market, and a sustainable competitive advantage, what Buffett calls a “moat.” Using this model, growth companies like Amazon and Alphabet, which appear expensive under old models, look more palatable. Of the dozens of how-to-invest books we considered for this list, Where the Money Is hits the bull’s-eye for being both simple and actionable.

“The world has changed, but it will change again. When it does, value 3.0 will become obsolete, and we'll need new frameworks to capture the new dynamics. While value 3.0 is where the money is today, one day it will be elsewhere. Then it will be time for value 4.0.”