Wednesday, April 14, 2010

Is There An Austrian Investment Theory?

This question was posted on a class discussion board. Essentially a student was asking if there were nay investment theories or disciplines that jive with Austrian Economics. My reply is as follows: 


Austrians might want to take a hard look at the value style of investing, a la Benjamin Graham.

Chris Leithner has suggested that Value Investors and Austrian economists share a great deal of common ground. He wrote a great paper on it entitled "Benjamin Graham Meet Ludwig von Mises. You can read it here: 
http://mises.org/journals/scholar/Leithner.pdf

You can learn more about the style on Leithner's site, which is loaded with Mises quotes.
http://www.leithner.com.au/

I would recommend reading Benjamin Graham's "The Intelligent Investor." 
http://www.amazon.com/Intelligent-Investor-Book-Practical-Counsel/dp/0060155477

I would also recommend "The Art of Contrary Thinking" by Humphrey B. Neill. This is a priceless resource for maintaining a mindset that runs counter to the herd. It is an excellent tool, and a wonderful compliment to Austrian econ. Human action is a dominant theme. Furthermore, the book is dedicated to "Contrarians and Libertarians Everywhere, May Their Numbers Grow!"
You can check it out on Google Books: 
http://bit.ly/cqBpcr

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