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. An objective appreciation for my cancer helped me deal with it better, make much 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 in general. Six months of chemotherapy and rehabilitation means you a lot of time on your hands. In 2016 I became a reading machine!
If reading could help me better understand and deal with illness, then could it help me better understand and deal with life? The answer to this question was a resounding yes. Knowledge leads to wisdom, the Return On Investment (the price of books) and the compound interest (on accumulated wisdom) is exponential. Reading gives you a compelling competitive advantage in life! Charlie Munger, Warren Buffet’s business partner at Berkshire Hathaway, sums it up best:
In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero. You’d be amazed at how much Warren reads [he’s purported to spend 80% of his day reading] – and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.
Munger is also an original proponent of a multidisciplinary approach to reading: weaving together ideas and insights from multiple disciplines to redefine problems outside of normal boundaries and reach solutions based on a new understanding of complex situations. He reads across mathematics and the sciences, psychology, history and business. Charlie Munger inspired me not to just read business books, but to learn much more broadly from everything around me and apply those lessons and concepts to situations pertinent to me and my clients.
Books that shaped my thinking in 2016
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. Inspired by the book, I’ve also written about the cognitive biases of entrepreneurs, as identified by Kahneman.
Sapiens: A Brief History of Humankind, by Yuval Noah Harari. Harari is without doubt 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.
Shoe Dog, 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.
Superforecasting: The Art and Science of Prediction, by Philip Tetlock. Read this book and you will never look at a prediction about the future in the same way again. Mind-alteringly good!
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.
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. It’s impossible to quantify the long-term ROI from reading this book.
I was also deeply influenced by Seeking Wisdom: From Darwin to Munger, by Peter Bevelin; Influence: The Psychology of Persuasion, by Robert Cialdini; and Nassim Nicholas Taleb’s The Black Swan: The Impact of the Highly Improbable.
Books that shaped my thinking in 2017
Scale: The Universal Laws of Life and Death in Organisms, Cities and Companies, by Geoffrey West – a book and author that embodies the multi-disciplinary approach. West is a theoretical physicist turned biologist. He is also the former President of the Sante Fe Institute, a research institute dedicated to the multidisciplinary study of the fundamental principles of complex adaptive systems. He identifies consistent theories of growth that underlie biological organisms, cities and businesses, and they are mind-blowing. He also identifies why cities are one of the most resilient eco-systems on the planet.
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.
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.
The Cyber Effect, by Mary Aiken – Aiken is a cyberpsychologist (the study of the impact of emerging technologies on human behaviour). Whilst not anti-technology, she speaks with a cautionary tone about our relationship with technology and urges us to think now about what might be done to mitigate future potential damage before it is too late. Given that 2017 will probably go down as the year in which big-tech began to fall from grace, it will be interesting to see how prescient her thinking is. Two of the most compelling ‘unknown unknowns’ that she identifies relate to our addiction to technology and it’s impact upon babies and young children. Whilst I don’t have children, you should read this book if you do. It was enough to make me give up my smartphone and become a proud owner of the re-launched Nokia 3310 dumb phone.
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?”
Homo Deus: A Brief History of Tomorrow, by Yuval Noah Harari – with my fondess for Harari’s writing after reading his first book Sapiens: A Brief History of Humankind, I opened up this book with trepidation. The book puts forward some very interesting ideas early-on but I found myself leafing quickly through the final pages which I found no more informative than the plethora of available click-bait blog posts about how the likes of AI will change the world decades from now. Harari excels at helping us understand the past but, devoid of a crystal ball, he has no better ability to predict the future than the next person. In the complex adaptive system that is our wonderful world, the reality is that we just don’t know. The book is a worthy read though and I’d encourage you to do so, but my challenge to you is to read it after first absorbing Philip Tetlock’s Superforecasting: The Art & Science of Prediction and Nassim Taleb’s Black Swan, then tell me how confident you are about what our long term future looks like.
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