| How incentives work |
| 04/22/23 Books |
"Too often there's a conflict between what you say and what your incentives signal. You can tell everyone that you care about honesty, but talk is cheap. For the claim to be credible, you need to back it up by taking actions that are costly to you, such as paying the full entrance fee. If you align what you say with the incentives you offer, the signal will be credible and easy to understand."
|
| Learned along the way |
| 04/22/23 Books |
"There are many paths to the top of the mountain. Most journeys start haphazardly, trying one route and then another. But eventually, successful investors settle down and do mostly the right thing for many years, and they end up with surprising wealth - and nobody's more surprised than the investors themselves, who discover that a huge pile of dollars has resulted from decades of prosaic prudence."
|
| Book publishing |
| 04/16/23 Books |
"BookScan found that only 6.7 percent of the new titles released by (the top ten publishers in the U.S. trade market) were selling more than 10,000 copies in their first year of sales, only 12.3 percent were selling more than 5,000 copies in their first year, and only 33.9 percent of these titles were selling more than 1,000 copies in their first year."
|
| A Christmas Carol |
| 12/25/22 Christmas Books |
"Scrooge was better than his word. He did it all, and infinitely more; and to Tiny Tim, who did not die, he was a second father. He became as good a friend, as good a master, and as good a man, as the good old city knew, or any other good old city, town, or borough, in the good old world."
|
| Worth a read |
| 12/04/22 Books |
"Personal finance books don't exactly rank as the most sought-after holiday gifts. Still, if there's a money nerd in your life - or someone who aspires to be one - below are 10 personal finance book recommendations."
|
| Getting vs. staying wealthy |
| 12/04/22 Behaviour Books |
"Good investing is not necessarily about making good decisions. It's about consistently not screwing up."
|
| Going the distance |
| 10/09/22 Retirement Books |
"The average American spends the last 12+ years of life with their activities at least partially and often seriously curtailed by illness, injury, or cognitive impairment"
|
| Personal-finance books are wrong |
| 09/11/22 Books |
"Economists tend to offer more rational advice, because they are dealing with numbers; best sellers tend to offer more practical advice, because they are grappling with human behavior - with all of its mess and irrationality."
|
| The long tail is gone |
| 07/03/22 Markets Books |
"For those who don't know the term, the Long Tail concept refers to businesses that focus on products and services with almost no customers."
|
| Value factor comes back |
| 04/17/22 Value Investing Books |
"Antti's latest book does exactly that. It argues that Value (and Momentum), are still reliable long run sources of return that can (and should) be used to enhance portfolio returns during the current environment of low expected returns."
|
| Value Investing: From Theory to Practice |
| 02/08/22 Books |
"Giving a fresh take on investing, Value Investing: From Theory to Practice shows the readers a process that will enable them to find the stocks worth investing in. The book is not giving the reader stock tips, but, instead, is teaching an approach to pick stocks through a step-by-step, end-to-end process. This process includes identifying possibly undervalued stocks, estimating their intrinsic value, and making a decision to buy or not."
|
| 5 books Bill loved |
| 01/02/22 Books |
"My holiday reading list this year includes two terrific science fiction stories. One takes place nearly 12 light-years away from our sun, and the other is set right here in the United States - but both made me think about how people can use technology to respond to challenges. I've also included a pair of non-fiction books about cutting-edge science and a novel that made me look at one of history's most famous figures in a new light."
|
| The great book shortage of 2021 |
| 10/07/21 Books |
"The place where readers are most likely to find themselves in a crunch, though, is with surprise bestsellers. Every year, there are books that do much better than either publishers or booksellers expected them to and sell out their initial print runs. Normally when that happens, booksellers immediately order more books, and publishers are able to print those books and ship them out rapidly. In 2021, that's going to be a lot more difficult. If a publisher unexpectedly sells out of a book early, it may not be able to send new copies to bookstores until well into 2022."
|
| Buffett's evolution into a great manager |
| 08/02/21 Buffett Books |
"One of the most interesting aspects of Cunningham's work with and about Buffett is the revelation that there are really two Buffetts, one the great investor that we all know about, and two, his later evolution into a great manager. We'll focus on what we can learn from Buffett, the manager in this week's show." [video]
|
| On Thinking: Fast and Slow |
| 05/02/21 Books |
"It is likely that Kahneman's book, or at least some of his chapters, would be very different from the actual book, if it had been written just a few years later."
|
| Rediscovered faith |
| 08/09/20 Behaviour Books |
"For the first year of my research, I collected examples of these kinds of paradoxes - where our intuitions about what an advantage or a disadvantage are turn out to be upside down. Why are so many successful entrepreneurs dyslexic? Why did so many American presidents and British prime ministers lose a parent in childhood? Is it possible that some of the things we hold dear in education - like small classes and prestigious schools who can do as much harm as good? I read studies and talked to social scientists and buried myself in the library and thought I knew the kind of book I wanted to write. Then I met Wilma Derksen."
|
| Debt: the first 5000 years |
| 05/16/20 Books |
"Graeber's broader point is that all debt, especially interest-drawing debt, is intimately related to its enforcement mechanism. IOUs don't exist in a vacuum; they're made in societal context. In an economic system where money is fundamentally a unit of trust, the rules around recoupment and enforcement of debts are made in an environment where people generally know each other, so we see recurring features like strong creditor protection and pretty sophisticated dispute resolution. In contrast, when money is a hard, fungible unit of scarcity, enforcement isn't a matter of trust; it's a matter of force. When your enforcement mechanism is state-backed violence, lenders and debtors have a pretty different relationship."
|
| Baby boomers took their children's future |
| 02/01/20 Economics Books |
"The post-war baby boom of 1945-65 produced the biggest and richest generation in British history. David Willetts discusses how these boomers have attained this position at the expense of younger generations." [video]
|
| How things go viral |
| 01/03/20 Media Books |
"Derek Thompson stops by The Compound to discuss how and why things go viral with Barry and Michael. Derek is a staff writer at The Atlantic and author of 'Hit Makers.'" [video]
|
| The SleepEasy Retirement Guide |
| 12/27/19 Retirement Books |
"But he says a 'basic' retirement at age 65 can be achieved with just $200,000 for a couple or $375,000 for a single."
|
| Finance books in one sentence |
| 08/12/19 Books |
"Give yourself a margin of safety because Mr. Market can be insane."
|
| The peculiar blindness of experts |
| 05/08/19 Behaviour Books |
"The best forecasters, by contrast, view their own ideas as hypotheses in need of testing. If they make a bet and lose, they embrace the logic of a loss just as they would the reinforcement of a win. This is called, in a word, learning."
|
| The Next Millionaire Next Door |
| 02/20/19 Books |
"Sarah Stanley Fallaw says seventy-five percent of millionaires paid less than $1000 for their most expensive suit. Fifty percent of millionaires paid less than $300 for their most expensive watch. Three-quarters of American millionaires paid less than $300 for their most expensive pair of shoes. She also found that 65 percent of American millionaires live in homes that are currently worth less than a million dollars."
|
| Popularity |
| 01/08/19 Behaviour Books |
"Popularity is a word that embraces how much anything is liked, recognized, or desired. Popularity drives demand. In this book, we apply this concept to assets and securities to explain the premiums and so-called anomalies in security markets, especially the stock market."
|
| 5 books I loved in 2018 |
| 12/03/18 Books |
"My list is pretty eclectic this year. From a how-to guide about meditation to a deep dive on autonomous weapons to a thriller about the fall of a once-promising company, there's something for everyone. If you're looking for a fool-proof gift for your friends and family, you can't go wrong with one of these."
|
| Lessons from Annie Duke |
| 10/15/18 Books |
"[A baseball executive] was in Las Vegas sitting next to a guy who has got a 17. So the dealer is asking for hits and everybody knows the standard in blackjack is that you sit on a 17. The guy asked for a hit. The dealer flips over 4, makes the man's hand, right, and the dealer sort of smiles and says, 'Nice hit, sir?' Well, you're thinking nice hit if you're the casino, because if that guy does that a hundred times, obviously the casino is going to take it the bulk of the time. But in that one particular instance: bad process, good outcome. If the process is the key thing that you focus on, and if you do it properly, over time the outcomes will ultimately take care of themselves. In the short run, however, randomness just takes over, and even a good process may lead to bad outcomes. And if that's the case: You pick yourself up. You dust yourself off. You make sure you have capital to trade the next day, and you go back at it."
|
| 20 rules for writers |
| 10/15/18 Books |
"Stephen King's top 20 rules for writers"
|
| Capitalism without capital |
| 08/22/18 Economics Books |
"The idea today that anyone would need to be pitched on why software is a legitimate investment seems unimaginable, but a lot has changed since the 1980s. It's time the way we think about the economy does, too."
|
| Watch less, read more |
| 08/22/18 Books |
"Everywhere I have sought peace and not found it, except in a corner with a book."
|
| Lessons from Benjamin Graham |
| 07/16/18 Zweig Graham Books |
"In June 2003, HarperCollins Publishers asked if I would be interested in updating Benjamin Graham's classic The Intelligent Investor. After determining that the proposal was not somebody's idea of a practical joke, I agreed to take on the project. And as I worked on revising the book, I was reminded, once again, what a genius Graham was."
|
| Theranos lessons |
| 06/19/18 Books |
"There are jerks, egomaniacs, and hucksters everywhere. Many of them are good at their craft. Plan accordingly."
|
| Meb's Amazon accusation |
| 04/22/18 Books |
"You've probably heard much in the media recently about Facebook, fake news, and weaponizing content to influence opinions and elections. You may have seen Mark Zuckerberg dragged in front of Congress to testify about Facebook's mistakes. Well, what you haven't heard much of in the media (yet) is how Amazon is an equally bad actor. Whereas Facebook is plagued by fake news, Amazon is littered with fake products. And these fake products encourage fraud and play a role in global money laundering."
|
| Tulip mania: the classic story is mostly wrong |
| 02/26/18 Markets History Books |
"Prices could be high, but mostly they weren't. Although it's true that the most expensive tulips of all cost around 5,000 guilders (the price of a well-appointed house), I was able to identify only 37 people who spent more than 300 guilders on bulbs, around the yearly wage of a master craftsman. Many tulips were far cheaper. With one or two exceptions, these top buyers came from the wealthy merchant class and were well able to afford the bulbs."
|
| Investment writing of 2017 |
| 01/01/18 Media Books |
"Reading the work of others is the most helpful way to learn about investing and it can also improve your writing. So, where credit is due, my favorite investment pieces of 2017"
|
| A Christmas Carol |
| 12/24/17 Christmas Books |
"I have endeavoured in this Ghostly little book, to raise the Ghost of an Idea, which shall not put my readers out of humour with themselves, with each other, with the season, or with me. May it haunt their houses pleasantly, and no one wish to lay it."
|
| Joel Tillinghast interview |
| 11/06/17 Value Investing Books |
"The fund's definition of low-priced is changing in November, from a price at time of purchase of under $35, to either a price under $35 or a higher-than-index earnings yield (that is, a low P/E). The original price test was meant to include small-cap stocks, but also larger companies that were temporarily depressed and turning around. The newer test is looking for low-priced relative to intrinsic value, which is how I have always run the fund."
|
| Atul Gawande on being mortal |
| 10/16/17 Health Books |
"Surgeon, public health researcher, and MacArthur fellow Atul Gawande discusses his NY Times bestseller, 'Being Mortal: Medicine and What Matters in the End.'"
|
| Dave Chilton interview |
| 06/04/17 Markets Books |
"We discuss business, investing, and writing." [audio]
|
| Messiness is good for the soul |
| 02/05/17 Books |
"he says, disorder can actually be good for our brains because when conditions around us aren't perfect, we are forced to use creativity to solve problems, and perhaps come up with solutions that are better than we could have imagined otherwise."
|
| Read 100 books a year |
| 10/16/16 Books |
"If you're an ambitious, goal oriented person, it's possible that one of your New Year's resolutions was to read more books. Books are the gateway to imagination, to worlds we may not be able to access physically, but can emotionally. Books help us to expand what we're capable of being and experiencing. Based on the math, which I'll explain below, I'll likely have read 100 books this year."
|
| A share of Berkshire Hathaway |
| 09/24/16 Munger Books |
"Imagine opening your mail and finding a share of Class A Berkshire Hathaway stock."
|
| ILTB: Michael Mauboussin |
| 09/24/16 Markets Books |
"In this episode, Michael Mauboussin and I discuss everything about asset management: the state of the industry, the active investment process, and Michael's simple but genius 'input/output' method for daily life. This is a full seminar on asset management."
|
| ILTB: Jeff Gramm |
| 09/17/16 Books |
"My guest today is Jeff Gramm. Jeff is the founder and portfolio manager at Bandera Partners, an Adjunct Professor at Columbia Business School, and the author of Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism. Jeff and I discuss the history and current state of shareholder activism, and explore how Jeff invests himself, taking large stakes and often board seats in undervalued companies."
|
| The reality of retirement |
| 08/21/16 Retirement Books |
"Lyndsay Green, sociologist and author of 'Ready To Retire? What You and Your Spouse Need to Know About the Reality of Retirement,' spoke with men over the age of 60 and their spouses, to learn about the anxieties and unexpected pleasures of retirement. Green joins The Agenda in the Summer to explore the worry and anticipation many feel toward the end of their careers." [video]
|
| Why you should not write a book |
| 08/21/16 Books |
"There's an unwritten rule that published authors are supposed to encourage everyone who dreams of it to finally go for it and write that book! Except that's just not true. Many of the people who want to write a book should not."
|
| Quench your own thirst |
| 08/06/16 Books |
"In 1984, Koch left his consulting job and started a small brewery in Boston, using a family recipe to create a beer that would start the craft beer revolution in the U.S. His book offers unique insights into the whirlwind ride from scrappy start-up to thriving public company. His innovative business model and frank stories offer counterintuitive lessons that you can apply to business and to life."
|
| Read books, live longer |
| 08/06/16 Health Books |
"Book readers lived an average of almost two years longer than those who did not read at all."
|
| Bexit |
| 06/25/16 Buffett Books |
"Shareholder activism spares no one, no matter how high their pedestal. Berkshire Hathaway is a public company, and as far as we know, Buffett has not chosen to entrench his successors with new supervoting shares or anything of that sort. How long will his life's work survive in an era of pervasive shareholding activism? It seems almost inevitable that Buffett's company, like the public vehicles of so many other successful investors, will become a target. It will be up to Berkshire's shareholders to defend it."
|
| For food stamps |
| 05/22/16 Books |
"My income per book always reminds me of how tough it is to make at living at this gig, especially for writers who only produce one book per year. If I did the same, and my one book performed as well as TF, and my family of four were solely dependent on my income, my net would be only around $2500.00 over the income level considered to be the U.S. poverty threshhold (based on 2008 figures.) Yep, we'd almost qualify for foodstamps."
|
| Pound foolish |
| 04/30/16 Books |
"The real story with most of these individuals is that they didn't earn their money by living below their means, saving and investing prudently, but rather by selling products and services that we're told will save and/or empower us. They're more salesman than missionary, telling us what we want to hear and not what we need to hear."
|
| Jason Zweig talks at Google |
| 04/10/16 Zweig Books |
"Jason Zweig will discuss his latest book, The Devil's Financial Dictionary, and how he went about distilling everything he had learned in almost three decades as an investing journalist into definitions of Wall Street terms that are, in many cases, only a few words long."
|
| Worth a second read |
| 03/28/16 Norman Rothery Stingy Investing Books |
"It's time to re-examine the notion that bookstores are dead and to give Indigo Books & Music Inc. a second look." [$]
|
| JK Rowling's rejection letter |
| 03/26/16 Books |
"They have been some of the most painful career mistakes in history: the record-label which turned down the Beatles, the editor who told Walt Disney he lacked imagination, and the publishers who rejected J K Rowling. The misery of the latter has today been compounded after Rowling shared the painful rejection letter she received, warning her adult crime novels could never be commercially successful."
|
| Credit Suisse Global Yearbook 2016 |
| 02/14/16 Markets Books |
"The history of recoveries from these major deflationary shocks reminds us that rapid monetary policy normalization cannot be taken for granted. It also suggests that real bond returns will be close to zero over the next decade, with real equity returns around their longer run average of 4% - 6% per annum."
|
| Culture eats strategy |
| 01/09/16 Management Books |
"Nucor probably didn't have any core attributes that were unavailable to its competitors. It simply made better choices and was more fanatical about sticking to them. The resulting success was deserved. This is why culture eats strategy."
|
| Hollywood bets on The Big Short |
| 11/29/15 Books |
"Then, the following year, as I was handing the manuscript of The Big Short to my publisher, Billy Beane called and said, 'You bastard, Brad Pitt is on his way to my house. The babysitter showed up wearing a dress, and my wife is putting on makeup.'"
|
| John Cleese: So, Anyway |
| 11/28/15 Fun Books |
"John Cleese stopped by the Google NYC office to further discuss So, Anyway... a book chronicling the early life of his career." [video]
|
| Guessing the future |
| 11/28/15 Books |
"Dan Gardner is the co-author of "Superforecasting: The Art and Science of Prediction," on the groundwork it takes to accurately predict the future. What makes some better able to hone in and others not? The Agenda examines what it takes to be prepared for the future." [video]
|
| Demystifying Wall Street |
| 11/21/15 Behaviour Zweig Books |
"Can a better understanding of Wall Street help us become more successful investors? We are joined by Jason Zweig, a highly respected financial journalist, "The Intelligent Investor" columnist at The Wall Street Journal and author. His latest book, The Devil's Financial Dictionary provides an entertaining, informative and insightful look into Wall Street's true nature." [video]
|
| Phishing for phools |
| 11/21/15 Behaviour Shiller Books |
"Nobel Prize winner Robert J. Shiller visited Google's office in Cambridge, MA to discuss the book he co-authored with George Akerlof, 'Phishing for Phools: The Economics of Manipulation and Deception.'" [video]
|
| Other people's money |
| 11/07/15 Markets Books |
"Industry insider John Kay argues that the finance world's perceived profitability is not the creation of new wealth, but the sector's appropriation of wealth - of other people's money." [video]
|
| James O'Shaughnessy interview |
| 11/07/15 Value Investing Books |
"How to be humble about stock investing, and how you are likely to beat the stock market by taken yourself out of the equation" [audio]
|
| The power of nudges |
| 11/01/15 Behaviour Books |
"In the meantime, that deal qualifies as a nudge that violates all three of my guiding principles: The offer was misleading, not transparent; opting out was cumbersome; and the entire package did not seem to be in the best interest of a potential subscriber, as opposed to the publisher."
|
| William Thorndike talks about The Outsiders |
| 10/24/15 Books |
"What is the hallmark of exceptional CEO performance? Quite simply, it is the returns for the shareholders of that company over the long term."
|
| Michael Lewis on Tom Wolfe |
| 10/18/15 Books |
"Michael Lewis delves deep into the archives of the legendary reporter turned novelist to discover what made the man in the white suit the voice of a journalistic generation."
|
| The best way to be smart |
| 09/20/15 Munger Books |
"So how then do we channel our inner Munger? In this episode of the a16z Podcast, we discuss how to think about thinking; why the best investors and business leaders spend more time on what they don't know; and how the best way to be smart is to - not be stupid."
|
| The art of investing |
| 09/05/15 History Zweig Books |
"The market values of our leading securities [are] determined by...a howling mob of incurable lunatics" [via Jason Zweig]
|
| Bob Cable's inevitable wealth |
| 09/05/15 Markets Books |
"If you're the type of investor who is driven to act emotionally, then a buy-and-hold strategy is the answer for you. Ignore the market."
|
| Ten tips for writing a book |
| 07/04/15 Zweig Books |
"Never write a book ..."
|
| Another Gladwell mindworm dies |
| 05/03/15 Behaviour Books |
"Wouldn't it be cool if there was a simple trick to score better on college entrance exams like the SAT and other tests? There is a reputable claim that such a trick exists. Unfortunately, the trick does not appear to be real."
|
| MiB: Patrick O'Shaughnessy |
| 01/12/15 Value Investing Books |
"O'Shaughnessy discusses that despite the difficulties of the economic environment, youth have tremendous advantages youth in terms of an investment horizon of up to half a century. This allows compounding to take place. In our conversation, we discuss active versus passive, why investors are their own worst enemies, and what they should - and should not - be doing."
|
| The education of a value investor |
| 01/04/15 Value Investing Behaviour Books |
"Guy Spier talks about his book at Google" [video]
|
| Believing what you read |
| 11/29/14 Markets Zweig Books |
"Mackay's book is still enormously entertaining - and worth reading - 170 years after it was published. But Mackay is often quoted as though he were an objective authority on the history of notorious bubbles like the 17th century Dutch tulip mania and the South Sea stock bubble of 1720 in England. Readers should bear in mind that Mackay was a storyteller, and that modern researchers have been unable to confirm some of his best-known anecdotes - and have disproved others altogether."
|
| 101 Years on Wall Street |
| 11/01/14 Books |
"A great book for investors to read to get a long-term, historical perspective on the stock market's ups and downs is '101 Years on Wall Street' by John Dennis Brown. It chronicles each year from 1890 through 1990, and as you read about each year, several things will become obvious - investors have not changed at all"
|
| Tobias Carlisle interview |
| 08/29/14 Value Investing Books |
"Tobias Carlisle talks about his book Deep Value." [Audio]
|
| Put cheapness first |
| 02/24/13 Value Investing Stingy Investing Books |
"EBIT/EV alone outperformed the magic formula's combination of ratios. Investors would have been better off simply looking for cheap stocks and not paying any attention to quality."
|
| Taleb mishandles fragility |
| 11/28/12 Books |
"Another key to understanding Taleb is that he has a French post-modern tendency to write to impress rather than explain. He provides hundreds of loosely related anecdotes, reminding me of the Talmud quote that 'when a debater's point is not impressive, he brings forth many arguments.'"
|
| You can't trust airport security |
| 09/08/12 Books |
"When the plumber knocks at your door, why do you let him in? He's probably bigger and stronger than you. And he has a wrench. He could easily kill you and steal your money and your stuff, which would certainly be a better deal for him than receiving a moderate payment and having to fix your toilet. But you trust that he won't; and trust, that mysterious and invaluable substance, is the subject of Bruce Schneier's ambitious "Liars and Outliers: Enabling the Trust That Society Needs to Survive," which starts with the homely parable of the plumber and builds into a treatise on every aspect of trust, from marital fidelity to transnational terrorism."
|
| David and Goliath |
| 07/10/12 Books |
"What should the strategy of the weak be when facing the strong? Does being an underdog - whether as a team a country or an individual - help foster creativity?"
|
| Figuring it out |
| 07/07/12 Graham Value Investing Books |
"Before Benjamin Graham started to work on Wall Street, investment analysis was a hit-and-miss affair, focusing more on recent price movements than on the merits of individual companies. Graham, a brilliant mathematician, took the process to a much higher level."
|
| The real genius of Steve Jobs |
| 11/12/11 Books |
"One of the great puzzles of the industrial revolution is why it began in England. Why not France, or Germany? Many reasons have been offered. Britain had plentiful supplies of coal, for instance. It had a good patent system in place. It had relatively high labor costs, which encouraged the search for labor-saving innovations. In an article published earlier this year, however, the economists Ralf Meisenzahl and Joel Mokyr focus on a different explanation: the role of Britain's human-capital advantage - in particular, on a group they call "tweakers." They believe that Britain dominated the industrial revolution because it had a far larger population of skilled engineers and artisans than its competitors: resourceful and creative men who took the signature inventions of the industrial age and tweaked them - refined and perfected them, and made them work."
|
| Why chasing success makes us happy |
| 08/04/11 Books |
"As he researched his subject, exploring economics, neuroscience and evolutionary biology, Buchholtz became convinced that much of the modern happiness project was a crock - not just unhelpful economically, but unhealthy and unnatural."
|
| Super Rich |
| 02/07/11 Books |
"In both authors' works, it's difficult to find concrete business lessons. And perhaps that's the point. For example, writes Chopra: 'Your body is a constant projection of you in the world. Every cell eavesdrops on your thoughts.' The author views our metabolisms as chat rooms, with epidermal cells listening in to what's going on in the cranium. If you don't understand what he means, your foot can explain it to you."
|
| Jim Otar's Christmas freebie |
| 12/16/10 Books |
"I'd be happy to make the green edition of my book 'Unveiling the Retirement Myth - Advanced Retirement Planning based on Market History', a textbook on non-Gaussian approach to retirement planning, to your readers for a limited time, from now until January 2nd."
|
| It's Not Rocket Science |
| 12/02/10 Books |
"We've compiled four years of Tom's articles and blogs into a new book titled It's Not Rocket Science: Plain-English Advice for Managing Your Investments. The pieces are short narratives that reinforce some of the basic, yet most important, principles of investing."
|
| The Rational Optimist |
| 11/29/10 Books |
"Today's Outside the Box is two essays, by Matt Ridley and Bill Gates, from the Review section of the WSJ. Ridley has written a book called The Rational Optimist... Bill Gates writes a longer essay to say why he thinks Ridley has some things wrong, while overall giving the book high marks. This is one of the more thought-provoking exchanges I have read in a while."
|
| The Non-Economist's Economist |
| 10/05/10 Books |
"Now comes the test of whether his popular writings will endure longer than the memory of his celebrity and the pleasure of his prose. 'The Great Crash' has a fighting chance, because of its very lack of analytical pretense. 'History that reads like a poem,' raved Mark Van Doren in his review of the 1929 book. Or, he might have judged, that eats like whipped cream.But the other books in this volume seem destined for only that kind of immortality conferred on amusing period pieces. When, for example, Galbraith complains in 'The Affluent Society' that governments can't borrow enough, or that the Federal Reserve is powerless to resist inflation, you wonder what country he was writing about, or even what planet he was living on."
|
| Michael Eisner on Teamwork |
| 09/26/10 Books |
"Eisner slips into the realm of the absurd when he proposes that more successful partnerships might be an antidote to the virus of executive greed that led, he boldly asserts, to the recent financial crisis.For anyone who remembers the hundreds of millions in stock options that Eisner garnered during his tenure at Disney, when he was one of the highest-paid executives in the world, this insight is the most hilarious punch line of all. Particularly, it so happens, as Eisner is said to be a candidate to take over the Tribune Co. If Wells were alive, let's hope he'd lean forward and suggest gently to Eisner that he's making a fool of himself. Though all evidence indicates that their beautiful partnership would never have survived if Wells did anything of the kind."
|
| The elements of investing |
| 08/29/10 Indexing Books |
"The Elements of Investing.written by former Vanguard board members Charles Ellis and Burton G. Malkiel.distills investing into five fundamental principles: save, index, diversify, avoid blunders, and keep it simple. Simply visit the publisher's website and download your copy today."
|
| The original captain of industry |
| 08/03/10 Books |
"Lipton's story starts out as a period piece but turns out to be completely contemporary. Unfortunately, The Great Lipton lived in an age before The Apprentice, when there were few options for a flamboyant CEO outside the C-suite. Without him, though, there might never have been such a show."
|
| Into thin error |
| 07/16/10 Books |
"I sought Viesturs out because I was curious about the kind of attitude you develop toward error when a single mistake can easily cost you your life. I also wanted to test a hypothesis that I call "the paradox of error": If your goal is to avoid making mistakes, then you must constantly assume that you are about to make one. That's why fields like aviation and medicine have, at their best, a productive obsession with error. It turns out the same goes for mountaineering - or, at least, mountaineering as practiced by Viesturs. He's totally comfortable with being wrong, he says; the important thing is that, "if you goof up, it's in the right direction.""
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| The zeroes |
| 07/16/10 Books |
"Lane believed he would make his own fortune by giving luxury advertisers a forum to reach this small but growing mob of ultrarich arrivistes. Unfortunately he chose a medium that would prove to be a surefire prophylactic against profits. Despite zealously attempting to sell out, Lane couldn't make a buck. When stock markets collapsed in 2008, so did his publishing empire."
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| On business competition |
| 07/10/10 Management Books |
"'A funny thing happens when you begin to capture competitive differences on paper', says Harvard Professor Youngme Moon in her book Different, 'there is a natural inclination for folks in the competitive set to focus on eliminating differences rather than accentuating them.'"
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| The confidence game |
| 07/05/10 Books |
"There really are loans that so safe that they can be written with a zero-loss standard and levered 150 times - but they are only that safe if you have removed the possibility of fraud - and you can only really do that by getting your fingers dirty. You cannot do that with a mathematical model."
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| Hyperbolic Geometry defeats Nazi Spoons |
| 03/26/10 Fun Books |
"Worm hunters, Nazi spoons and homicidal robots were crushed in one of Britain.s quirkiest literary contests, as a book that uses crochet to introduce non-Euclidean geometry won the annual Diagram Prize for Oddest Book Title."
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| Gary Gorton vs. Michael Lewis |
| 03/22/10 Books |
"The basic idea is that the repo market had developed as an independent source of funds, and when some AAA rated mortgaged backed securities started to fall in price, this tainted all AAA securities, especially asset backed paper. AAA securities have a 0.01% default rate, so from a bayesian perspective, when you see a default here the probability is not that one was very unfortunate, but rather, the rating was wrong. Perhaps all ratings are wrong?!. Everyone was scrambling to understand these securities work to assess how much they are worth, and found them insanely complicated, so people naturally assumed the root cause could be anything related to 'debt', derivatives, rated securities, was complicated, etc. Everything was painted by the same brush, as when one bad cow tainted with e. coli causes a wholesale destruction of all beef products sold in the US, because one can't be sure. A run on the repo market was a classic bank run, causing the banking system to be insolvent, and lending to sharply contract."
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| Michael Lewis on Charlie Rose |
| 03/17/10 Books |
"An hour with Michael Lewis, author of 'The Big Short'"
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| Quantifying qualitative factors |
| 02/23/10 Books |
"I've just finished Ian Ayres's book Super Crunchers, which I found via Andrew McAfee's Harvard Business Review blog post, The Future of Decision Making: Less Intuition, More Evidence (discussed in Intuition and the quantitative value investor). Super Crunchers is a more full version of James Montier's 2006 research report, Painting By Numbers: An Ode To Quant, providing several more anecdotes in support of Montier's thesis that simple statistical models outperform the best judgements of experts."
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| Money for nothing |
| 01/18/10 Books |
"I'm not even Andrew Ross Sorkin, the superstar financial writer at the New York Times. The advance for my new book wasn't in the millions of dollars. It wasn't even in the high six figures. Instead, we're talking more the, um, low five figures. After you deduct my agent's commission and the costs involved in research and writing, my take was in the very low five figures. This is, I'm sorry to say, more typical for authors. Indeed, most writers don't get published at all. Only giants like Sorkin or Palin command the great publishing sums. It raises a question that financial writers, for obvious questions, rarely ask: Should you really take financial advice from someone foolish enough to write for a living?"
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| Hoisington Q4 letter |
| 01/18/10 Markets Books |
"In 2009, the book This Time is Different.Eight Centuries of Financial Folly, by Reinhart and Rogoff, shed new light on the role of debt by compiling a database that looked at financial crises in 66 countries over a period of 800 years. The main standard in explaining more than 250 crises studied is whether debt is excessive relative to national income, even though idiosyncrasies apply in each case. They reiterate that this old rule (excessive debt) continues to apply, and this time is not different."
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| Improve results with checklists |
| 01/06/10 Books |
"What's a low-tech way to improve the performance of everyone from doctors to investors to airline pilots? According to Atul Gawande, it's the humble checklist."
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| Money for nothing |
| 01/05/10 Books |
"Should you really take financial advice from someone foolish enough to write for a living? Run the numbers. If a typical author earns, say, $3 per book sold and the book sells 20,000 copies, then that's $60,000 in gross income -- before costs. But that may be for a year's work. We're talking maybe $30 an hour."
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| What matters now |
| 12/14/09 Books |
"Here are more than seventy big thinkers, each sharing an idea for you to think about as we head into the new year. From bestselling author Elizabeth Gilbert to brilliant tech thinker Kevin Kelly, from publisher Tim O'Reilly to radio host Dave Ramsey, there are some important people riffing about important ideas here. The ebook includes Tom Peters, Jackie Huba and Jason Fried, along with Gina Trapani, Bill Taylor and Alan Webber. Here's the deal: it's free."
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| Malcolm Gladwell, eclectic detective |
| 11/14/09 Books |
"Readers have much to learn from Gladwell the journalist and essayist. But when it comes to Gladwell the social scientist, they should watch out for those igon values."
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| Where SuperFreakonomics falls down |
| 10/28/09 Books |
"Almost everybody has had the experience of wondering if the problem with one's car is really as serious as the auto mechanic says - or if the mechanic is blowing it up to charge more. In our dealings with the body shop, as in many other situations, we are at what the experts would call a humongous informational disadvantage. We are always conscious of the possibility of getting charged way too much. And we sometimes are - but rarely do we run into the perfectly unscrupulous tradesman who rips us off as badly as we fear he can. Car repair isn't one of the professions that Steven D. Levitt and Stephen Dubner look at in their best-selling Freakonomics or their new SuperFreakonomics. But it's an example that's familiar to everyone and useful in thinking about questions like 'How do we know when we're getting a fair deal?' or 'How likely are we to be misled in our dealings?' or (for those who are, like me, clueless about cars), 'Why don't we get ripped off all the time?'"
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| Praise for Peter Bernstein |
| 06/18/09 Markets Books |
"Peter Bernstein aimed for large targets, and gave broad and convincing evidence of how markets worked. He only erred in letting Modern Portfolio Theory and Keynesianism affect him. With that, I hail Peter Bernstein, regretting his demise. He will be missed, as few of us had such global vision of markets as he had."
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| Risk-management pioneer |
| 06/14/09 Markets Books |
"Investing has yielded a few stars so famous they are known by first name. Warren Buffett is one. Peter L. Bernstein -- the economist, investment consultant and prolific author who died on June 5 at 90 -- was another."
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| The fat tail |
| 05/26/09 World Government Markets Books |
"In their entertaining new book, The Fat Tail, Eurasia Group investment strategists Ian Bremmer and Preston Keat observe that while banks likely spent $8 billion on credit-risk software in 2008, most spent 'far less energy on the assessment and management of political risk.' It's easy to make the argument that banks and businesses of all stripes ignore risk of the policy variety at their peril."
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| The master of money |
| 05/18/09 Value Investing Buffett Books |
"There is now a long shelf of books about Warren Buffett, but this is the first time he has gone to any trouble to add to it. Reportedly Buffett now regrets his decision--he has apparently put some fresh distance between himself and his official biographer. If so, it's not hard to see why. Alice Schroeder is a former Morgan Stanley research analyst, able to understand and to explain Buffett's money-making, but she declined to confine herself to the business at hand. She has sought to describe Buffett's psychological landscape as clearly as his financial one. For the reader, the results are pretty terrific--there are not a lot of 838-page narratives that leave you wanting more--but for Buffett they are no doubt upsetting."
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| Findependence day |
| 12/01/08 Thrift Books |
"The protagonists grapple with two key concepts - financial independence and guerrilla frugality. Financial independence (the book's title is a contraction of the term) refers to the goal for most of us: the day on which our assets are large enough to cover our living expenses and we don't have to work for a living anymore. ... Guerrilla frugality is the key means to achieve the end, financial independence."
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| James Grant pops Greenspan's bubbles |
| 11/24/08 Grant Books |
"Such proofs of Grant's foresight -- the power of mind over mania -- fill his new anthology, 'Mr. Market Miscalculates,' a bracing tonic as U.S. equities suffer what may prove their worst year since 1931. We've all met Mr. Market. He's the manic-depressive business partner invented by value investor Benjamin Graham. When the sun is shining, he urges you to sell him your share of the business. When night falls, he begs you to buy him out. Price is no object. Grant's omnibus offers a blow-by-blow account of one man's battle with this crank, from dot-com binge to mortgage meltdown."
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| The backstory on the Buffett book |
| 08/25/08 Buffett Books |
"One of the most anticipated books of the fall is "The Snowball: Warren Buffett and the Business of Life." The title's publisher, Bantam, paid $7.2 million for the North American rights and expects to sell more than 1 million hardcover copies of "The Snowball," which is due out Sept. 29. Few investors have generated as much sustained public interest as Mr. Buffett, one of the world's richest men, with a fortune estimated as high as $62 billion. R.R. Bowker's Books in Print says there are an estimated 60 titles in print about him, with more than a dozen new ones on tap this year. Now Bantam is about to find out whether there's a limit to Buffetmania."
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| Two years inside the cauldron of capitalism |
| 08/19/08 Education Books |
"The weirdest and creepiest episode is when a student writes to the entire school, confessing to a 'regrettable property-damage incident', a gorgeous euphemism for urinating against a neighbouring student's door. 'His behaviour had made him realise he still had work to do figuring out exactly who he was.' Ye-es . . . or maybe he should just resolve not to pee against people.s doors in future. Even more creepily, Delves Broughton finds that he no longer responds to such tosh with a healthy snort of laughter. 'It was serious, right? Leadership. Core values. Transformation. Being true to oneself.' It takes his wife - his American wife - to inject some common sense. 'These people are freaks..'"
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| The new economics and the pursuit of happiness |
| 07/01/08 Academia Behaviour Books |
"The revolution begun by Kahneman and Tversky is now some three decades old, and it is generating excitement well beyond the borders of academe--and so this is a good time to examine whether it has lived up to its promise. Bruno S. Frey's Happiness and Dan Ariely's Predictably Irrational together offer a fine occasion to begin such a reckoning. Not all the revolutionaries in economics are discussed by Frey; the media star Levitt does not even make an appearance. Ariely, who teaches at MIT, helps to fill in the picture. Like Levitt, he has climbed the best-seller list with some of the most counterintuitive findings of behavioral economics. One is dry and humorless, the other is sprightly and inviting, but between them these books offer an overview of what this new economics is all about, and enable us to evaluate whether it is as innovative as its adherents claim."
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| Are your stocks protected by moats? |
| 05/29/08 Stingy Investing Buffett Books |
"Thanks to The Rothery Report's Norman Rothery - with whom I had the pleasure of dining this week - I came across a copy of a book that is focused on the topic of economic moats. It's called The Little Book That Builds Wealth (Wiley, 2008), by Pat Dorsey, who is the director of equity research at Morningstar Inc. Morningstar is famous for its mutual fund ratings, but also rates individual stocks using an 'economic moat' rating system. The book divulges most of its approach to this system and makes for a fascinating read."
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| Fooling some of the people all of the time |
| 04/24/08 Books |
"Now Mr. Einhorn has written a book. But instead of packaging the real or contrived "secrets" to his success - as cliche would have it - he has tried to do something less triumphant and far gutsier. In "Fooling Some of the People All of the Time," he turns the spotlight on a single, stubborn investment play that never made much money for him but created six years of headaches."
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| Taleb outsells Greenspan |
| 03/30/08 Markets Derivatives Disaster Books |
"On a freezing day in March 2007, Nassim Taleb walked into a conference room at Morgan Stanley's Manhattan offices on 47th Street and Broadway to address a group of the firm's risk managers. His message: Your models don't work. Using a whiteboard to scribble out his calculations, Taleb, now 48, began one of his rants, this time against stress tests -- Wall Street lingo for examining how a market rout will play out. Stress tests are inherently risky because they ignore rare but potentially devastating events, Taleb said. 'Past shortfall doesn't predict future shortfall,' the options trader turned best-selling author recalls telling the assembled group of about 40. The risk managers, part of a tribe of mathematical model makers known in the finance world as quants, stared back at him blankly, and a debate ensued, according to people who were there. Only six months later, Morgan Stanley experienced its own rout. The world's second-biggest mergers adviser announced in December that it had written down its subprime-related holdings by $9.4 billion after the firm's traders misjudged how fast and far prices of the debt would fall. Their risk management had failed."
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| Six books you need to make money |
| 07/17/07 Books |
"Knowing how to invest is a life skill that can pay off big. If you're just getting into the game though, learning how to play the markets to your advantage can be complicated. The books below tell you what you need to know to make money, without a lot of financial terminology. They're not your typical textbooks - they're as fun as they are informative, and must reads for anyone interested in business and investing."
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| What else is new? |
| 06/21/07 Books |
"Old technologies persist; they even flourish. In that sense, they're as much a part of the present as recently invented technologies. It is said that we live in a "new economy," yet, of the world's top thirty companies (by revenue), only three are mainly in the business of high tech - General Electric (No. 11), Siemens (No. 22), and I.B.M. (No. 29) - and all three go back more than a century. The heights of the early-twenty-first-century corporate world are still occupied - as they have long been - by petroleum companies (Exxon Mobil, Royal Dutch Shell, and B.P., Nos. 1, 3, and 4), retailing (Wal-Mart, No. 2), automobiles (General Motors, No. 5), and finance (I.N.G. and Citigroup, Nos. 13 and 14). No Hewlett-Packard (No. 33); no Microsoft (No. 140); no Merck (No. 289)."
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| Everybody's an expert |
| 03/07/07 Books |
"People who are not experts in the psychology of expertise are likely (I predict) to find Tetlock's results a surprise and a matter for concern. For psychologists, though, nothing could be less surprising. 'Expert Political Judgment' is just one of more than a hundred studies that have pitted experts against statistical or actuarial formulas, and in almost all of those studies the people either do no better than the formulas or do worse. In one study, college counsellors were given information about a group of high-school students and asked to predict their freshman grades in college. The counsellors had access to test scores, grades, the results of personality and vocational tests, and personal statements from the students, whom they were also permitted to interview. Predictions that were produced by a formula using just test scores and grades were more accurate. There are also many studies showing that expertise and experience do not make someone a better reader of the evidence. In one, data from a test used to diagnose brain damage were given to a group of clinical psychologists and their secretaries. The psychologists' diagnoses were no better than the secretaries'."
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| A devilish delusion |
| 03/01/07 Books |
"In 1982, the Academy Award for Best Costume Design went to a film called Chariots of Fire, the story of a couple of upper-class Brits as they trained for and competed in the 1924 Paris Olympics. (You had to be there.) The movie was the year's big hit; it won a slew of awards, including Best Picture. Have you seen Chariots of Fire? It's about track and field; the actors basically spend the bulk of the movie running around in their underwear. Bam - give'em the costumes Oscar!"
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| Extraordinary Popular Delusions |
| 01/31/07 Books |
"Among the bubbles described by Mackay is the Dutch tulip mania of the early seventeenth century. According to Mackay, during this bubble, speculators from all walks of life bought and sold tulip bulbs and even futures contracts on them. Allegedly, some tulip bulb varieties briefly became the most expensive objects in the world, until the bubble burst in 1637. Other bubbles described by Mackay are the South Sea Company bubble of 1711.1720, and the Mississippi Company bubble of 1719.1720." [Note that the books themselves can now be downloaded for free.]
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