I can thank my experience with cancer for my new reading habits. Determined to understand my illness and what was going on inside my body, I consumed every medical paper I could get my hands on. This knowledge helped me deal with it better, make more informed decisions as part of my treatment process, and live with the aftermath. Serious illness is as much a head-game as it is a physical experience, so I transitioned from reading medical texts to books about psychology, then on to books about the world around me. Six months of chemotherapy and rehabilitation means you have a lot of time on your hands. The following books kept me occupied.
In my whole life, I have known no wise people who didn’t read all the time – none, zero. You’d be amazed at how much Warren reads – and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.
Charlie Munger (94), business partner of Warren Buffet (87).
Sapiens: A Brief History of Humankind, by Yuval Noah Harari. Harari is one of the best contemporary meta-thinkers, with the ability to weave ideas and words into compelling philosophies. He charts our origins from hunter gatherers 2.5 million years ago on to the rise of Homo Sapiens 200,000 years ago, then takes the reader through the Cognitive Revolution 70,000 years ago, the Agrarian Revolution 10,000 years ago, into the Scientific Revolution in the 1500s, the Industrial Revolution in the late 1700s and on to the present. As humans we are very good at seeing things from our own perspective and within short windows of time. This book will seriously challenge your horizons.
Thinking Fast & Slow by Daniel Kahneman. A seminal book about how our brain is hardwired by evolution to think. Reading this book, and improving your understanding and awareness of your brains deliberate flaws, will help you improve your own thinking and decision making. Ironically for a book about cognitive biases, so powerful was this book’s effect on me that I regard it as probably the most influential book I’ve ever read.
Influence: The Psychology of Persuasion, by Robert Cialdini, was first published in 1984. It is apparently one of Charlie Munger’s favourite books. The author’s theory of influence is based on six key principles: reciprocity, commitment and consistency, social proof, authority, liking, scarcity.
How to Win Friends and Influence People by Dale Carnegie was first published in 1936. Some dismiss this book as being about pop-psychology but that is their loss. Carnegie pioneered the development of personal business skills, self-confidence and motivational techniques. I find it fascinating that much of his observations, tools and techniques are now backed up by subsequent psychology studies over the last 80 years, including Kahneman and Cialdini. Warren Buffet is quoted as saying “this book changed my life.”
In Seeking Wisdom: From Darwin to Munger, Peter Bevelin explains how our thoughts are influenced, why we make misjudgments and tools to improve our thinking. This book is the A-Z of wisdom. It’s not cheap, but it’s worth every penny.
Superforecasting: The Art and Science of Prediction, by Philip Tetlock. Are you a hedgehog or are you a fox? Read this book and you will never look at a prediction about the future in the same way again.
Nassim Taleb is the author of a number of highly influential books and quite a character. He’s variously described as a former options trader, a psychologist, philosopher and flaneur. Irreverent and often highly offensive on Twitter to those he calls out as frauds, he is one of the most influential thinkers of our time. Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets deals with the fallibility of human knowledge, and our tendency (and need) to view the world as more explainable than it really is. The Black Swan: The Impact of the Highly Improbable focuses on the extreme impact of rare and unpredictable outlier events and the human tendency to find simplistic explanations for these events, retrospectively (the narrative fallacy).
The Most Important Thing by investor Howard Marks. An investing masterclass that should be read by the professional and amateur investor alike. With a focus on psychology and not mathematics, you don’t need to be good with a calculator to gain a huge investing knowledge advantage from this book. I’ve combined Marks and Taleb’s wisdom in my own post: Howard Marks and Nassim Taleb on the role of luck & randomness in life & business.
A Short History of Financial Euphoria, by J.K. Gailbraith – published nearly 25 years ago and readable in just a few hours, this wonderful little book charts the bubbles and busts of recent centuries. Gailbraith himself was a Harvard professor and consecutive advisor to US Presidents. He is recognised for being one of America’s leading public intellectuals. Given recent market surges in the likes of Bitcoin, it will interesting to see whether Gailbraith’s key messages will be as timeless as they have proven to be in the past. Or will it be the case that “it will be different this time?”
Principles: Life & Work, by Ray Dalio. Dalio is the founder of Bridgewater Associates, one of largest hedge funds in the world with approximately $160 billion of Assets Under Management. That he began the company in his two bedroom apartment in New York in 1975, makes him not just one of the world’s greatest investors but also one of the world’s greatest entrepreneurs. Consider this book part of his legacy. Dalio identifies his principles (fundamental truths that serve as the foundations for behaviour that gets you what you want) for building a successful life and business. Principles is unlike any other book I’ve ever read. For more, you might like my post Ray Dalio identifies the 11 characteristics of visionary leaders.
A Man for All Markets, by Edward O. Thorp – I’d never heard of Thorp but my hedge-fund friends soon informed me that he was a living legend. Thorp was a MIT professor, he invented card counting and the world’s first wearable computer, beat the casinos of Las Vegas at blackjack and roulette, then became a bestselling author and hedge fund heavyweight, ushering in the ‘quant’ revolution on Wall Street. A book overflowing with wisdom, for Thorp, the first question to ask yourself in any investment situation (and I’d suggest business in general) is “what’s my edge?” If you can’t answer that question then move on.
Shoe Dog: A Memoir by the Creator of Nike, by Phil Knight is an awesome biography about the founder of Nike, charting the true, and extreme, highs and lows of entrepreneurship. Knight tells the story of how, what is still widely regarded to be one of the most innovative companies in the world, it all began from the back of a van in the early 1970s. A Stanford graduate, avid reader of the Classics and books about military strategy, and a natural introvert, Knight captures a wonderful story about what he calls his Crazy Idea and the determination and grit it takes to become successful beyond what he’d ever imagined. Here are my favourite quotes from the book.
Boyd: The Fighter Pilot Who Changed the Art of War, by Robert Coram. A beautiful book about an eccentric genius who deserves to be better known than he is for his impact. Boyd is considered to be one of histories greatest military strategists, whose legacy lives in today in ways that most would not comprehend. For a summary of the book you can read my post abou the strategic genius of John Boyd.
Would any list like this be complete without including Man’s Search for Meaning by Victor Frankl? chronicles the author’s time as an inmate in the Auschwitz concentration camp during World War II. The early chapters do not make for easy reading but the book opens up into one of the deepest and most eloquent explorations of the meaning of human existence and man’s search for such meaning. This book is essential reading for anybody interested in the psychology of suffering, mental health, personal growth, and how to lead a happy life.