Below are brief video reviews of three books highly recommended by Hedgeye CEO Keith McCullough. If you're searching for a thoughtful book about how to simplify the complexities of financial markets, look no further.
1. This Book is the Bible of Financial Markets
"This is somewhat of a Bible to me," says McCullough about "The Misbehavior of Markets" by mathematics legend Benoit Mandelbrot. "I learned a ton from this guy, if only what not to do. It's an alternative to establishment economics. It's certainly an alternative to how people think about markets relative to economic data."
2. ‘The Most Important Book I’ve Read on Behavioral Finance’
“This book provides a real baseline for understanding, ‘What is behavioral finance?’” McCullough says of Daniel Kahneman’s seminal book, Thinking Fast and Slow. “What this book does is it teaches why human beings should embrace uncertainty.”
McCullough says Thinking Fast and Slow should push anyone “who is not a believer in behavioral finance” to prove “why this isn’t a better way.”
3. This Is One of the Better Economics Books You’ll Ever Read
“I’d like to thank Mr. Simon for being not only a revolutionary in this space, but for challenging the status quo,” McCullough says of Nobel laureate Herbert Simon’s witty autobiography, Models of My Life. “That’s a really important component of this book. It contextualizes where we were in economics back in the 1970s and outlines a better path forward.”
Simon's keen insights influenced myriad disciplines including economics, political science, sociology, psychology and computer science.“To be good at this, the people that I’ve found to be most useful, at the foundational level of what I do, are the people whose insights cross disciplines,” McCullough says. “They’re not ideological or people that only navigate one domain of the social or natural sciences.”