Read your way to investing success

This may come as a surprise to many investors, but books contain knowledge and knowledge can be useful

What should an equity investor's reading list be? That may sound like a strange question to many ears. After all, it should be obvious that the only thing an equity investor needs to read are websites, forums, and messages that give out tips on which stocks have momentum. Maybe, some investors also like to read company financials, research reports or even business news. But surely that's all. What else would an equity investors need to know?

Well, according to a reading list recommended by of one of the world's most successful investors, just about anything but the above. The investor in picture is Charlie Munger, the partner and deputy of Warren Buffett, and his list of recommended books have nothing of investing, and not even much of business.

Munger's list mostly has books on science, biographies, and history. In fact, the list is dominated by science books. There's Jared Diamond's amazing book Guns, Germs, and Steel: The Fates of Human Societies is typical, as is Richard Dawkins' The Selfish Gene, and Ice Age: How a Change of Climate Made Us Human by John Gribbin.

There's a pattern to these kind of books which go beyond a narrow topic. These are multidisciplinary books that connect the dots across a wide swath of science, human history and society. Is there a connection here to the way one needs to look at events and trends and the kind of books that Munger recommends ? Cause and effect are never linear and to know what will happen to businesses one has to connect trends from many different fields.

The recent Volkswagen affair is an interesting example. The linear response would be to say that Volkswagen is going to have a bad time. However, a different picture might emerge when one combines many disparate trends: Volkswagen, similar anomalies in almost all diesel vehicles, how emission limits have changed, the way emission controls work, Tesla and other electric cars, taxi-hailing apps, and self-driving vehicles. Connect the dots and it suddenly looks possible that not just the auto industry, but the way people use vehicles and the role they play in society could be in for a deeply disruptive change over the next decade or two.