The Cost Of Safety

Written by Max Osbon

If you are uncertain, optimistic or nervous about investments right now, it may be a good time to do a little reading. Knowledge is really the best way to counterbalance emotions, which we know may be running high for some right now. Our advice: Check out what the masters have said. They’ve devoted their lives to understanding investing and captured it all in print. It turns out there is truly nothing new under the sun; their insights apply year in and year out.

We love original sources, so here’s our top seven list for you to read or re-read. If you don’t like to read, give them to a trusted source to tell you what’s in them.

The Fundamentals

Security Analysis – by Benjamin Graham & David Dodd

Known as the bible of value investing. This is the book that Warren Buffet credits for his success. One of the hallmarks of value investing is patience, and at 800 pages you’ll need plenty of it.

Margin of Safety by Seth Klarman

The successor to Security Analysis. Seth Klarman is Boston’s own investment man of mystery. This book is infamous for its low supply and high $1000 price tag. However, a clever Google search might save you some money.

The Academic Approach

Against the Gods: A History of Risk by Peter Bernstein

What are all of the ways you can calculate risk? After you read this book, you will know just about all of them. From chaos theory to game theory, Pascal to Bernoulli, and gambling addicts to derivatives traders, this is probably the most comprehensive book calculating risk. It’s a perfect depiction of man’s never-ending quest to wrestle uncertainty into submission via mathematics.

Antifragile by Nassim Taleb

Before you trade any options, it would be prudent to read Nassim Taleb’s four-book series. Antifragile is one of my favorites as it explores the concept of antifragile investments – investments that do well specifically in chaotic times.

For Emotional Endurance

The Upside of Stress by Kelly McGonigal

Would you rather lose money on an investment or watch others gain while you sit out on the sidelines? Greed, regret, fear, and other emotions can get in the way of otherwise rational and logical decisions. Not all stress is bad stress.

Bonus Reading

Wealth in Families by Charlie Collier

Charlie says you should give your children just enough money to give them an advantage, but not enough to make them lazy. What goals, stories and lessons can you pass down to the next generation to give them a leg up beyond the financial inheritance?

Classics: An Investor’s Anthology by Charles D. Ellis

A collection of articles and letters written by famous and wildly successful investors. If you like primary sources, this is a great collection of ideas and advice straight from the titans themselves.

** For Clients Only **

As a special offer, for Osbon Capital Management clients only, we’re happy to send you copies of any of the above titles for you or for your family members. Simply let us know and we will ship to your address.

Max Osbon – mosbon@osboncapital.com


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