The brief descriptions below are of my three favorites among the book reviews published in 2024 in Enterprising Investor. Throughout the year, our Review Team members generously share their expertise and experience in bringing to CFA charterholders’ attention books that offer insights, concepts, and techniques that are useful to them in their work. The three books that I highlight here stand out for their applicability to practical issues confronting investment decision-makers.
I have derived tremendous benefits from serving as Book Review Editor since 1989, initially for the Financial Analysts Journal and since for Enterprising Investor. Writing some of the reviews myself, while working with team members on others, has been a valuable component of my lifelong learning. In addition, I have found it rewarding to help fellow charterholders enhance the knowledge and skills necessary to perform at the highest level.
The M&A Failure Trap: Why Most Mergers and Acquisitions Fail and How the Few Succeed. Baruch Lev and Feng Gu.
The 70%-75% M&A failure rate found by the authors cries out for exactly their brand of rigorous quantification of the factors that produce success or its opposite. Especially valuable is their exploration of the managerial incentives that continue to lead to doomed deals. Lev and Gu manage to make their heavily data-driven analysis highly readable, with colorful prose and engaging stories of both winning and losing transactions.
The Ownership Dividend: The Coming Paradigm Shift in the U.S. Stock Market. Daniel Peris.
It is important for practitioners to read works that challenge conventional wisdom and The Ownership Dividend certainly fits the bill. Peris’s strongly supported, alternative narrative is that the deemphasis of dividends over the last few decades was a function of specific historical circumstances, with the pendulum now set to swing back toward a more traditional focus on current income. I find particularly interesting his contention that Modigliani and Miller’s dividend Irrelevance theory is period-bound rather than generalizable to all eras.
Markets in Chaos: A History of Market Crises Around the World. Brendan Hughes.
Notwithstanding Hegel’s aphorism, commonly rendered as, “We learn from history that we do not learn from history,” investment professionals truly can up their game by studying past market cycles. Hughes reaches as far back as the eighteenth century in his examination of financial crises. He brings their lessons to bear, however, on investment decisions involving such weighty contemporary issues as technological challenges to incumbent financial institutions and the obstacles facing the United States in attempting to rectify its fiscal imbalances.
2025 Sneak Preview
In 2025, watch for a review of Buffett’s Early Investments: A New Investigation into the Decade When Warren Buffett Earned His Best Returns, by Brett Gardner. The energy and creativity that went into the Oracle of Omaha’s initial triumphs offer guidance and inspiration to opportunity seekers more than a half century on.
Also be on the lookout over the coming year for Enterprising Investor’s take on The Making of Modern Corporate Finance: A History of the Ideas and How They Help Build the Wealth of Nations, by Donald H. Chew, Jr. The theories discussed in this book are staples of the CFA curriculum, but Chew brings out an additional, vitally important dimension — the vast impact that ideas have had on financial practice and through that medium on global economic performance. After reading this book, practitioners will not merely regard the corporate finance pathbreakers as illustrious figures in textbooks but feel on a first-name basis with them.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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