market folly

After a bit of an absence, we're back with our Recommended Reading List series. And, this is another special edition. Our last post in the series focused on articles recommended by John Burbank's hedge fund Passport Capital. That list was included in an email sent out to their investors and featured some great reads.

This time around (thanks to Hunter over at Distressed Debt Investing) we've been alerted to a recommended reading list of another hedge fund we cover on the blog: John Griffin's Blue Ridge Capital. Long-time blog readers will know that we track Blue Ridge's portfolio because they are the pure definition of a Tiger Cub. Griffin was Julian Robertson's right-hand man while at Tiger Management and was one of the first to strike out on his own. And, Blue Ridge is also a part of the Tiger Cub Portfolio created with Alphaclone where you can replicate their 15.5% annualized returns since 2000. (More info on Griffin at the bottom for those unfamiliar).

Their reading list is quite extensive and broken up into five different categories. As such, we're going to post each category separately as they are quite comprehensive. Since they are a fundamentally intensive hedge fund, we'll appropriately start with the Analytical category. Then, over the next few days, we'll post up the Historical, Economic, Behaviorial finance, and 'Other' categories. Without further ado:

Analytical

The Art of Short Selling by Kathryn Staley: Examples and instructions on how to find overpriced stocks and profit from their decline.

Financial Shenanigans: How to Detect Accounting Gimmicks by Howard Schilit: How to identify inflated profits, suspicious write-offs, and shifted expenses.

A Random Walk Down Wall Street by Burton Malkiel: A great investing guide covering all asset classes.

One Up On Wall Street by Peter Lynch: A classic with contributions from John Rothchild as well.

The Warren Buffett Way by Robert Hagstrom: Outline of Buffett's tenets for investing.

Security Analysis by Graham & Dodd (also a staple on our fundamentals recommended list): Hands down THE best book on fundamental analysis and value investing principles.

Common Stock and Uncommon Profits by Philip Fisher: Investment philosophies from a widely regarded investor.

Winning the Loser's Game: Timeless Strategies for Successful Investing by Charles Ellis: Growing with the markets, rather than fighting them: Topics ranging from compounding to fighting down-cycles.

Built to Last: Successful Habits of Visionary Companies by Collins & Porras: Evaluation of what makes companies "great" and how to spot those with solid products, a great brand, and a bright future.

Against the Gods by Peter Bernstein: Comprehensive guide to understanding risk and probability throughout history.


As you can see, quite a lengthy and comprehensive list... and that's only one of Blue Ridge's categories. So, stay tuned as we cover the other four sections. In the mean time, make sure you also check out our past Recommended Reading Lists where we've covered the topics of:

- Fundamentals

- Good Market Reads

- Gurus

- Technical analysis


Background on Blue Ridge:

Griffin is a Tiger Cub, and as mentioned above, he was Julian Robertson's right hand man. So, needless to say, he knows his stuff. Blue Ridge seeks absolute returns by investing in companies who dominate their industries and shorting the companies who have fundamental problems. While hedge funds typically closely guard their short positions, we've gotten a sneak peek in the past at what Blue Ridge had been shorting. Both Griffin at Blue Ridge and Lee Ainslie over at Maverick Capital like to effectively hedge with a solid balance of both long and short positions (like a true hedge fund... not like some of the crazy funds these days that aren't truly hedged). Griffin attended the University of Virginia for undergrad and received his MBA from Stanford.