Nassim Taleb is a Lebanese-American author, essayist, philosopher and statistician. He’s been a hedge fund manager, a derivatives trader, a professor at multiple prestigious universities, and a risk analyst.
As an author, Taleb is renowned for his books Antifragile, Fooled By Randomness, Skin in the Game and The Black Swan. Each of these dives deep into probability, randomness and risk.
He’s also an avid reader, reviewing nearly every book he reads under his personal Amazon account.
Naturally, several of these are finance and investing books that he’s read to stay on top of his field. Below, we’ve briefly summarized his favorites.
However, it’s worth noting that Taleb reads books in nearly every genre — from history to philosophy to psychology and even fiction.
To that end, we’ve compiled a list of his non-financial book recommendations later in the article.
First, finance and investing.
Finance and Investing Books
Taleb isn’t a fan of economists. He made this clear in a 2010 interview with The New Statesman, saying that “being an economist is the least ethical profession, closer to charlatanism than any science.”
So when he recommends books written by economists or financial professionals, they’re likely to be full of gold.
Here are his finance and investing reading recommendations, listed chronologically by date of first publication.
A Guide to Econometrics
Author: Peter Kennedy
Originally published: 1979
Taleb said: “Great Intuition Builder!”
Peter Kennedy was a Canadian economist and long-time Simon Fraser University economics professor.
He’s best known for his contributions to the field of econometrics, which is the application of mathematical and statistical methods to evaluate economic issues.
Econometrics is notorious for being tough for new students to understand. In A Guide to Econometrics, Kennedy breaks the mold by leaving out the technical details.
Instead, he explains this complex field in a way that makes it more accessible to beginners, weaving humor, intuition and practical advice throughout.
In his review, Taleb praises this book for taking a more intuitive approach to econometrics and statistics.
What I Learned Losing a Million Dollars
Authors: Jim Paul and Brendan Moynihan
Originally published: 1994
Taleb said: “One of the rare noncharlatanic books in finance.”
Through a series of successes, Jim Paul rose from small-town life to governor of the Chicago Mercantile Exchange — the world’s largest financial derivatives exchange.
But thanks to a mix of economic arrogance and hubris, he lost his wealth, job and reputation.
Paul partnered with veteran Wall Street trader and Bloomberg News editor-at-large Brendan Moynihan to detail his life in What I Learned Losing a Million Dollars.
In the book, Paul and Moynihan show that there are near endless ways to win in the markets. However, there are only a few ways to lose — and they’re mostly psychological. Understanding these factors can help you avoid losses.
Taleb describes this book as “noncharlatantic,” which one can take to assume he means that it’s written without much pretense.
Both Paul and Moynihan have plenty of trading experience, so you get more than simple theory here.
No Bull
Subtitle: My Life In and Out of Markets
Author: Michael Steinhardt
Originally published: 2001
Taleb said: “The man is one of the greatest traders in history.”
Michael Steinhardt is an American billionaire investor and hedge fund manager known for earning his clients an annualized average return of 24.75% between 1967 and 1978.
No Bull is a mix of Steinhardt telling his life story and teaching the strategies he used to perform so well as an investor.
Taleb said he loves this book because it isn’t trying to argue anything.
Instead, you get a first-hand look at the life of one of the most successful traders ever, including insight into how he did so well.
The Statistical Mechanics of Financial Markets
Author: Johannes Voit
Originally published: 2001
Taleb said: “Very useful bridge between physics methodologies and finance.”
Johannes Voit’s first career was as a professor of theoretical physics.
After accomplishing a great deal in that field, he became interested in applying statistical physics to financial markets.
He explores these possibilities in The Statistical Mechanics of Financial Markets, which is widely considered a seminal work in the field.
In the book, Voit uses both his understanding of physical models and empirical financial data to assess the fundamental assumptions of various financial models we take for granted, bridging the gap between financial events and physical phenomena.
For example, he shows that we can predict stock market crashes with modeling techniques similar to those used to predict earthquakes and even phase transitions (such as when liquids change to gases).
Overall, this book provides a clear and concise — though by no means simple — way to explain asset prices using statistics.
Bull!
Subtitle: A History of the Boom and Bust, 1982-1999
Author: Maggie Mahar
Originally published: 2003
Taleb said: “Mahar had the courage to take a look at what was behind all of this religious belief in markets.”
Maggie Mahar is a financial journalist known primarily for her work on the American health care system.
However, she’s no stranger to other financial topics — which is made clear in her book Bull! A History of the Boom and Bust.
In the book, Mahar tells the tale of the overall bull market that ran from 1982-2000. Rather than focus on technical economic or financial concepts, Mahar explores the stories of various parties at the time, from Wall Street investors to the average person.
She also explores a lot of financial tricks executives used to manipulate the perceived value of their companies.
Despite Mahar being a journalist, Taleb — who isn’t a fan of the profession or its practitioners — loves the work because Mahar has “the attitude and mindset of a truth-seeker.”
Plus, he says the story format makes this an enjoyable read.
The New Financial Order
Subtitle: Risk in the 21st Century
Author: Robert J. Shiller
Originally published: 2003
Taleb said: “Throughout his career Shiller has stood for unpopular ideas and has been proven right (his 1981 paper on volatility, his 2000 discussion of the bubble). I would read and re-read this book.”
Robert Shiller is a Nobel-prize winning economist and academic who’s held positions with the American Economic Association, investment firm MacroMarkets LLC, the National Bureau of Economic Research and Yale University.
In The New Financial Order, Shiller presents several ambitious ideas for reworking how we temper financial risk — particularly those risks posed to “ordinary riches,” such as people’s homes and incomes.
Taleb wrote that he appreciates Shiller for standing for unpopular ideas that were proven right.
For example, in 1981 Shiller published a paper challenging the efficient-market hypothesis; that paper is now cited as one of the most influential economic pieces of the 20th century.
Similarly, Taleb believes that Shiller is ahead of his time with this book.
Why Stock Markets Crash
Subtitle: Critical Events in Complex Financial Systems
Author: Didier Sornette
Originally published: 2003
Taleb said: “I learned more from this book than any other on disequilibrium.”
Didier Sornette is a pioneer in econophysics, which applies scientific theories and methods in physics to economic problems.
He’s a scientist first, but he’s found ways to bridge science and finance — which is apparent in Why Stock Markets Crash.
In the book, Sornette applies his experience in various fields to explain how you can detect the root cause of a catastrophic market event years in advance. He uses advanced statistical modeling techniques to demonstrate his analysis, and he applies them to historical examples of financial crises.
Although Taleb doesn’t care much for the idea of crashes, he notes that Sornette’s concepts can apply to huge market successes, too.
In other words, he argues that, in theory, you can use Sornette’s concepts to buy into the market before it takes off.
The Misbehavior of Markets
Subtitle: A Fractal View of Financial Turbulence
Authors: Benoit Mandelbrot and Richard L. Hudson
Originally published: 2004
Taleb said: “The deepest and most realistic finance book ever published.”
Benoit Mandelbrot was one of Taleb’s mentors.
He’s also one of the most influential mathematicians of the 20th century, known for his contributions to fractal geometry.
Fractal geometry is a high-level mathematical concept.
Fortunately, he and science journalist/former Wall Street Journal editor Richard Hudson explain it in simple terms in The Misbehavior of Markets.
The first half of this book details traditional theories of finance and risk analysis. The authors explore familiar concepts such as modern portfolio theory and basic probability.
Part two introduces fractals, defining what they are (“…a self-similar subset of Euclidean space whose fractal dimension strictly exceeds its topological dimension”) and how you can apply them to market behavior.
Mandelbrot and Hudson conclude the text with a few pieces of practical financial advice.
Taleb wrote that this book’s ideas are more realistic than conventional investment wisdom. In his mind, this is a better book for learning how markets work than many often-recommended classics.
Modelling Extremal Events
Subtitle: For Insurance and Finance
Author: Paul Embrechts, Claudia Klüppelberg and Thomas Mikosch
Originally published: 2004
Taleb said: “This book is the bible for the field.”
Paul Embrechts is a mathematics professor at EZH Zurich (a Swiss public university) specializing in insurance mathematics.
His work is primarily in the field of extreme value theory, a branch of statistics that deals with extremely unlikely events — which is essential to insurance.
In Modelling Extremal Events, Embrechts et al. attempt to create a complete guide for dealing with these types of events. The book is quite academic, containing a mix of theory, practical applications and graphs/charts.
According to Taleb, this text contains everything you need to know about extreme value theory and predicting extreme events; nothing of relevance is excluded.
Financial Derivatives
Subtitle: Pricing, Applications, and Mathematics
Author: Jamil Baz
Originally published: 2004
Taleb said: “No financial book has the clarity of this text.”
Hailing from Lebanon like Taleb, Jamil Baz has a long career of leadership roles at prestigious financial firms, ending with his current managing director position at global fixed income management firm PIMCO.
He also teaches financial economics and mathematics at Oxford University.
His book Financial Derivatives offers a comprehensive look at derivative pricing and the complex mathematics involved in the field. Various other advanced financial and economic topics relevant to derivatives are also covered.
Financial Derivatives is essentially a textbook, so it’s not a light read. That said, Taleb writes that this book is vital for any quantitative finance academic or practitioner, as it covers topics other quantitative finance books leave out.
Related: The best books about quantitative finance.
Rational Decisions
Subtitle: The Gorman Lectures in Economics
Author: Ken Binmore
Originally published: 2008
Taleb said: “This is a must read as it presents a comprehensive set of the principles and axioms behind neo-classical economics.”
Ken Binmore started his career as a mathematician. Eventually, he switched to economics and became a leading expert in the field of game theory.
In Rational Decisions, Binmore explores Bayesian decision theory — a decision-making framework that attempts to quantify the tradeoff between decisions using the probabilities and costs of events.
This theory was created by statistician Leonard Savage, who argued that it only works on a small scale. Binmore uses math to prove Savage’s point. However, he then proposes an extension that could work on a larger scale.
Rational Decisions explains everything clearly and thoroughly. It offers an accessible yet expert view on the complex topic of Bayesian decision-making.
The Blank Swan
Subtitle: The End of Probability
Author: Elie Ayache
Originally published: 2010
Taleb said: “A gutsy look at the ‘end of probability’ and how we will need to envision the world once we get rid of this artificial, antiquated tool.”
Elie Ayache is an engineer by training, but he wanted to trade options. His first day as an options trader on the floor of the French Futures and Options Exchange was October 19, 1987 — otherwise known as Black Monday.
The Blank Swan — a play on the title of Taleb’s book The Black Swan — explains why events like this can happen.
In the book, Ayache essentially argues that probability in markets is an artificial concept we use to explain prices, among other things.
Taleb praised this book for addressing so-called “black swan” events — major surprises that we inappropriately rationalize with hindsight — in ways he had not thought about before.
The Kelly Capital Growth Investment Criterion
Subtitle: Theory and Practice
Authors: Leonard C. MacLean, Edward O. Thorp and William T. Ziemba
Originally published: 2011
Taleb said: “Finally, a compendium of the most rigorous research on risky decisions.”
Edward Thorp is an American mathematics professor known for his 1966 book Beat the Dealer, in which he proved you can overcome the dealer’s house advantage in Blackjack through card counting.
He used a formula called the Kelly Criterion to devise his strategy.
In The Kelly Capital Growth Investment Criterion, he explains how traders can apply this formula to the financial markets.
In short, Taleb argues that the book presents a more realistic method of trading than modern portfolio theory, even stating that “every surviving speculator uses explicitly or implicitly method 2” (with “method 2” being the formula explained in this book).
Models. Behaving. Badly.
Subtitle: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life
Author: Emanuel Derman
Originally published: 2011
Taleb said: “An elegant combination of memoir, confession, and essay on ethics, philosophy of science and professional practice.”
Emanuel Derman has a broad background: theoretical physics, programming and quantitative analysis. Throughout his life and career, he’s witnessed both the power and pitfalls of modeling future events.
In Models. Behaving. Badly., Derman examines various scenarios from his life in which mathematical models failed.
He tries to explain why modeling works in physics but fails in economics and finance, coming to the conclusion that it’s because the latter deals with human beings.
This is partly why Taleb likes it. He writes that financial modeling isn’t scientific, and believes this book to show that. He also notes that the personal story aspects of the book help the reader further understand the contents.
The Dao of Capital
Subtitle: Austrian Investing in a Distorted World
Author: Mark Spitznagel
Originally published: 2013
Taleb said: “The Dao of Capital mixes (rather, unifies) personal risk-taking with explanations of global phenomena. You cannot afford not to read this!”
Spitznagel is a successful investor and hedge fund manager. But before that, he was a graduate student of Taleb’s at NYU.
He shares a unique investment philosophy with Taleb that’s based on ancient Chinese Daoist concepts. Instead of pursuing immediate gains, you seek out immediate losses.
Then, you profit off of other investors’ urgency for immediate gains and intolerance for small losses.
The Dao of Capital goes much deeper into this investment strategy. Spitznagel uses several analogies and historical events to convey how it works.
Like with other finance and investing books, Taleb says that he enjoys his former student’s work because it comes from someone experienced in the subject matter. He also appreciates that Spitznagel supplements factual information with his personal experiences and real-world examples.
Fiction Books
- Collected Fictions by Jorge Luis Borges
- The Count of Monte Cristo by Alexandre Dumas
- The Crocodile by Fyodor Dostoyevsky
- The Opposing Shore by Julien Gracq
- The Secret of Fatima by Peter J. Tanous
- The Sunday Philosophy Club by Alexander McCall Smith
- The Tartar Steppe by Dino Buzzati
Health Books
- 1,000 Foods To Eat Before You Die: A Food Lover’s Life List by Mimi Sheraton
- Body by Science: A Research-Based Program for Strength Training, Body Building, and Complete Fitness in 12 Minutes a Week by John Little
- Free The Animal: Lose Weight & Fat With The Paleo Diet by Richard Nikoley
- Good Calories, Bad Calories: Challenging the Conventional Wisdom on Diet, Weight Control, and Disease by Gary Taubes
- Happy Accidents: Serendipity in Modern Medical Breakthroughs by Morton A. Meyers
- Laughing Gas, Viagra, and Lipitor: The Human Stories Behind the Drugs We Use by Jie Jack Li
History Books
- Intellectual Life in the Middle Ages: Essays Presented to Margaret Gibson by Lesley M. Smith (Editor)
- Levant: Splendour and Catastrophe on the Mediterranean by Philip Mansel
- The Discovery of France: A Historical Geography from the Revolution to the First World War by Graham Robb
- The French Revolution and What Went Wrong by Stephen Clarke
Math, Statistics and Probability Books
- Birth of a Theorem: A Mathematical Adventure by Cédric Villani
- Mathematics: Its Content, Methods and Meaning by A.D. Aleksandrov
- Probability, Random Variables and Stochastic Processes with Errata Sheet by Athanasios Papoulis
- Probability Theory by S.R.S. Varadhan
- Statistical Models: Theory and Practice by David A. Freedman
- The Elements of Statistical Learning: Data Mining, Inference, and Prediction by Trevor Hastie
- The Science of Conjecture: Evidence and Probability Before Pascal by James Franklin
Philosophy Books
- A Few Lessons from Sherlock Holmes by Peter Bevelin
- Confessions of a Philosopher: A Personal Journey Through Western Philosophy from Plato to Popper by Bryan Magee
- Kant and the Platypus: Essays on Language and Cognition by Umberto Eco
- Letters from a Stoic by Seneca
- I Think, Therefore I Laugh: The Flip Side of Philosophy by John Allen Paulos
- Information: The New Language of Science by Hans Christian Von Baeyer
- Plato and a Platypus Walk Into a Bar: Understanding Philosophy Through Jokes by Thomas Cathcart
- Seeking Wisdom: From Darwin To Munger by Peter Bevelin
- Straw Dogs: Thoughts on Humans and Other Animals by John N. Gray
- The Birth of Tragedy by Friedrich Nietzsche
- The Dream of Reason: A History of Philosophy from the Greeks to the Renaissance by Anthony Gottlieb
- The Doctrine of Deification in the Greek Patristic Tradition by Norman Russell
- The Making of a Philosopher: My Journey Through Twentieth-Century Philosophy by Colin McGinn
Psychology Books
- A History of the Mind: Evolution and the Birth of Consciousness by Nicholas Humphrey
- Consciousness – An Introduction by Susan Blackmore
- Mapping the Mind by Rita Carter
- Mean Genes: From Sex to Money to Food: Taming Our Primal Instincts by Terry Burnham
- Social Cognition by Ziva Kunda
- Strangers to Ourselves: Discovering the Adaptive Unconscious by Timothy D. Wilson
- The Halo Effect: How Managers let Themselves be Deceived by Phil Rosenzweig
- The Mind Doesn’t Work That Way: The Scope and Limits of Computational Psychology by Jerry A. Fodor
- The Paradox of Choice: Why More Is Less by Barry Schwartz
- The Status Syndrome: How Social Standing Affects Our Health and Longevity by Michael G. Marmot
- The Wisdom Paradox: How Your Mind Can Grow Stronger as Your Brain Grows Older by Elkhonon Goldberg
- Thinking and Deciding by Jonathan Baron
- Thinking, Fast and Slow by Daniel Kahneman
- Why Everyone (Else) Is a Hypocrite: Evolution and the Modular Mind by Robert Kurzban
Miscellaneous Books
- Critical Phenomena in Natural Sciences: Chaos, Fractals, Selforganization and Disorder: Concepts and Tools by Didier Sornette
- Deep Learning by Ian Goodfellow
- Explaining Social Behavior: More Nuts and Bolts for the Social Sciences by Jon Elster
- How Nature Works: The Science of Self-Organized Criticality by Per Bak
- Idea Makers: Personal Perspectives on the Lives & Ideas of Some Notable People by Stephen Wolfram
- Invariances: The Structure of the Objective World by Robert Nozick
- Order Without Design: How Markets Shape Cities by Alain Bertaud
- Perilous Interventions: The Security Council and the Politics of Chaos by Hardeep Singh Puri
- The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph by Ryan Holiday
- The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust by John Coates
- The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly
- Who We Are and How We Got Here: Ancient DNA and the New Science of the Human Past by David Reich
Reading List Archived From Taleb’s Website
Below is the reading list from Taleb’s personal website, which has since been deleted. Thankfully, we’re able to access an archived version via The Wayback Machine.
The list is made up primarily of 20th Century modernist novels, many of which were originally written in French. Where applicable, we’ve included the English title in case you want to pick up the translated version.
- A Burnt-Out Case by Graham Greene (1960)
- A Confederacy of Dunces by John Kennedy Toole (1980)
- A l’ombre des jeunes filles en fleurs (“In the Shadow of Young Girls in Flower”) by Marcel Proust (1918)
- Albertine disparue (“The Sweet Cheat Gone”/“The Fugitive”) by Marcel Proust (1925)
- Amerika by Franz Kafka (1927)
- Auto-da-fé (“The Blinding”) by Elias Canetti (1935)
- Belle du seigneur (“Beauty of the Lord”) by Albert Cohen (1968)
- Climates by André Maurois (1928)
- Clea by Lawrence Durell (1960)
- Death in Venice by Thomas Mann (1912)
- Ferdyduke by Witold Gombrowicz (1937)
- Ficciones (“Fictions”) by Jorge Luis Borges (1944)
- Flaubert’s Parrot by Julian Barnes (1984)
- Hotel du Lac by Anita Brookner (1984)
- Howard’s End by E. M. Forster (1910)
- How Proust Can Change Your Life by Alain de Botton (1997)
- I, Claudius by Robert Graves (1934)
- Il deserto dei tartari (“The Tartar Steppe” by Dino Buzzati (1940)
- Immortality by Milan Kundera (1990)
- Justine by Lawrence Durell (1957)
- Keep the Aspidistra Flying by George Orwell (1936)
- La colline inspirée (“The Sacred Hill”) by Maurice Barrès (1913)
- La condition humaine (“Man’s Fate”) by André Malraux (1933)
- Le grand maulnes (“The Great Meaulnes”) by Alain-Fournier (1913)
- La noia (“The Empty Canvas”) by Alberto Moravia (1960)
- La romana (“The Women of Rome”) by Alberto Moravia (1947)
- La storia (“History”) by Elsa Morante (1974)
- Lady L. by Romain Gary (1958)
- Léon l’africain (“Leo Africanus”) by Amin Maalouf (1986)
- Les jeunes filles (“Young Ladies”) by Henry de Montherlant (1936)
- Mashen’ka (“Mary”) by Valdimir Nabokov (1926)
- Mémoires d’Hadrien (“Memoirs of Hadrian”) by Marguerite Yourcenar (1951)
- Memoirs of an Anti-Semite by Gregor von Rezzori (1969)
- Najda by André Breton (1928)
- Paulina 1881 by Pierre Jean Jouve (1925)
- Seta (“Silk”) by Alessandro Barrico (1996)
- Sherlock Holmes Series by Arthur Conan Doyle (1891-1927)
- The End of the Affair by Graham Greene (1951)
- The Magic Mountain by Thomas Mann (1924)
- The Man Without Qualities (Vol. 1) by Robert Musil (1943)
- The Razor’s Edge by William Somerset Maugham (1944)
- The Remains of the Day by Kazio Ishiguro (1989)
- The Sun Also Rises by Ernest Hemingway (1926)
- The Tattered Cloak and Other Stories by Nina Berberova (1930s and 40s)
- The Unbearable Lightness of Being by Milan Kundera (1984)
- Tortilla Flat by John Steinbeck (1935)
- Travels with my Aunt by Graham Greene (1969)
- Un amore (“A Love Affair”) by Dino Buzzati (1963)
- Un taxi mauve (“A Mauve Taxi”) by Michel Déon (1973)
- Una vita (“Inept”) by Italo Svevo (1892)
- Villa Triste by Patrick Modiano (1975)
- Voyage au bout de la nuit (“Journey to the End of the Night”) by Louis-Ferdinand Céline (1932)
Nassim Taleb on Reading
On the same website where Taleb listed the books above, he shared some of his thoughts on why reading is a worthwhile enterprise.
I treat books as friends; you miss them when you don’t see them for a while. Perhaps the best test of one’s appreciation for a novel is whether one craves it at times, enough to reread it. Rereading a novel is far more enjoyable than reading it for the first time. Many I have read more than twice, some (like Il deserto dei tartari, un taxi mauve, Paulina 1881,…), more than five times.
Taleb’s archived personal website.
Up to the age of 25, you read wholesale and in a mercenary way, to “acquire” a possession, to build a “literary culture,” and do not tend to reread except when necessary. After 25, you lose your hang-up and start rereading — and it is precisely what you reread that reveals your literary soul, what you like.
As with friendship: you do not judge friends, you do not mix business and friendship; I even physically separate literature from more functional books (different libraries; I feel I am corrupting literature by having scientific or the philistinic “nonfiction” in the same area).
Summary
In Antifragile, Taleb wrote that, “Curiosity is antifragile, like an addiction, and is magnified by attempts to satisfy it — books have a secret mission and ability to multiply, as everyone who has wall-to-wall bookshelves knows well.”
He definitely fits his own description.
If you also find yourself endlessly curious and need some new book suggestions, consider adding some of Taleb’s personal favorites to your own bookshelf.
thank you for making this rj