A Fool and His Money is a critically acclaimed personal account of a year devoted to investing in the markets. The book offers a comic and educational journey through the investment world, highlighting the experiences and lessons learned by the author. It includes humorous anecdotes and practical advice for investors.
Parent Effectiveness Training by Thomas Gordon offers practical advice on building respectful relationships with children. It emphasizes active listening, I-messages, and the 'No-Lose' method for conflict resolution, promoting a nurturing family environment and fostering self-discipline in children. The book challenges traditional authoritarian parenting methods, advocating for a collaborative approach that encourages mutual respect and cooperation.
In 'Complexity: A Guided Tour', Melanie Mitchell provides a comprehensive overview of complex systems science, covering topics such as chaos theory, genetic algorithms, and network theory. The book explores how complex, organized behavior arises from simple interactions across various biological, technological, and social phenomena. It offers insights into the current research and future prospects of complexity science.
Richards J. Heuer Jr.'s "Psychology of Intelligence Analysis" is a seminal work in the field of intelligence studies. It delves into the cognitive biases and mental processes that can affect the accuracy of intelligence assessments. The book emphasizes the importance of self-awareness, critical thinking, and rigorous analytical techniques to mitigate these biases. Heuer's work has had a profound impact on how intelligence agencies approach analysis, promoting a more systematic and self-critical approach to decision-making. The book's insights are relevant not only to intelligence professionals but also to anyone involved in complex decision-making processes.
In 'The 4-Hour Body,' Tim Ferriss shares the results of over a decade of self-experimentation and research, involving hundreds of elite athletes, dozens of MDs, and thousands of hours of personal testing. The book covers more than 50 topics, including how to lose weight quickly, gain muscle without steroids, sleep less and perform better, and improve sexual health. Ferriss emphasizes the importance of finding the smallest changes that produce the biggest results, making it accessible for readers to achieve significant improvements in their physical health and performance.
In this conclusion to the Age of Madness trilogy, Joe Abercrombie depicts a world in the midst of the Great Change, where the Breakers and Burners have seized power, and the old order is being torn down. The story follows characters like Citizen Brock, Citizeness Savine, King Orso, and Rikke as they navigate the chaos, destruction, and political upheaval. The book explores themes of governance, survival, and the complexities of human behavior during times of revolution and societal collapse. Known for his vivid characterizations, dark humor, and intense action sequences, Abercrombie delivers a morally complex and gripping conclusion to the trilogy.
The book tells the story of the Oakland Athletics' 2002 season, where General Manager Billy Beane and his assistant Paul DePodesta used advanced statistical analysis, known as sabermetrics, to assemble a competitive team despite a limited budget. The approach, pioneered by Bill James, focused on metrics such as on-base percentage and slugging percentage rather than traditional measures like batting average and runs batted in. This data-driven strategy allowed the Athletics to compete with teams having much larger payrolls, like the New York Yankees, and achieve significant success, including a 20-game winning streak and a playoff appearance[2][3][5].
In "No Two Alike," Judith Rich Harris delves into the intriguing question of why identical twins, despite sharing the same genes, often exhibit significant differences in personality and life outcomes. Harris explores various factors contributing to these variations, including genetic predispositions and environmental influences. The book examines the complex interplay between nature and nurture, challenging simplistic explanations of human development. It offers a nuanced perspective on the role of genetics and environment in shaping individual traits and behaviors. Harris's research and analysis provide valuable insights into the complexities of human individuality.
In this book, Tetlock and Gardner present the results of the Good Judgment Project, a massive forecasting tournament that identified a small group of 'superforecasters' who are exceptionally good at predicting future events. The authors explain that good forecasting does not require powerful computers or arcane methods but involves gathering evidence from various sources, thinking probabilistically, working in teams, keeping score, and being willing to admit error and change course. The book uses stories of forecasting successes and failures, as well as interviews with high-level decision makers, to illustrate these principles and demonstrate how anyone can improve their forecasting abilities[3][4][5].
Against the Gods: The Remarkable Story of Risk chronicles the intellectual journey that has led humanity from relying on oracles and soothsayers to using sophisticated tools of risk management. The book delves into the history of probability, starting from ancient civilizations and their limitations in understanding chance, to the modern era where risk is quantified and managed. Bernstein discusses how the development of probability theory and risk management has been a key factor in distinguishing modern times from the past[2][4][5].
This book, written by Alfred Rappaport, provides practical tools and tests for corporate strategies that create shareholder value. It covers applications in business planning, performance evaluation, executive compensation, mergers and acquisitions, interpreting stock market signals, and organizational implementation. Rappaport emphasizes the importance of focusing on long-term strategies rather than short-term gains and explains key concepts such as corporate value, shareholder value added (SVA), and the role of shareholder value in decision-making. The book includes case studies, such as the acquisition of Duracell International by Gillette, to illustrate the intricate decisions and risks involved in mergers and acquisitions[1][3][5].
In 'The Nurture Assumption', Judith Rich Harris challenges the conventional wisdom that parents are the primary influence on child development. Instead, she posits that children's peers play a more significant role in shaping their behavior and personality. The book offers a compelling argument that reevaluates the traditional understanding of parental influence and highlights the importance of peer relationships in child development.
M. Mitchell Waldrop's book delves into the world of complexity science, exploring how individual elements spontaneously form intricate systems like ecosystems and economies. It highlights the work of luminaries at the Santa Fe Institute, including Nobel laureates Murray Gell-Mann and Kenneth Arrow, and their revolutionary discoveries that could transform multiple scientific disciplines. The book offers a compelling narrative about the scientists behind this emerging field and their quest to understand complex systems.
In 'Consilience: The Unity of Knowledge', E.O. Wilson advocates for the integration of knowledge from different fields to create a unified theory of understanding. He draws on the concept of consilience, introduced by William Whewell, which means the 'jumping together' of knowledge by linking facts and theories across disciplines. Wilson explores the chemistry of the mind, the genetic bases of culture, and the biological principles underlying works of art. He argues that a unified approach can lead to a deeper understanding of the human condition and the natural world, and he critiques the fragmentation of knowledge into separate disciplines. The book is a call for a new Enlightenment, emphasizing the importance of science and reason in understanding all aspects of human existence.
In this book, Robert M. Sapolsky delves into the fascinating world of stress and its impact on our bodies. He explains why zebras, unlike humans, rarely suffer from stress-related illnesses. Sapolsky combines cutting-edge research with practical advice and engaging anecdotes to illustrate how prolonged stress can cause or intensify a range of physical and mental afflictions, including depression, ulcers, colitis, and heart disease. The book also provides essential guidance on managing stress responses and offers new insights into how stress affects sleep, addiction, anxiety, and personality disorders[3][4][5].
In this book, Sapolsky delves into the complex interplay of biological processes, including neuroscience, genetics, and hormones, to explain why humans behave in various ways. He examines behavior on multiple time scales, from the immediate neural responses to actions that occur over centuries and millennia. The book addresses topics such as tribalism, xenophobia, hierarchy, competition, morality, and free will, providing a nuanced and multifaceted understanding of human behavior. Sapolsky's approach integrates cutting-edge research across several disciplines to offer insights into the biological basis of human actions, both good and bad.
In this book, Philip E. Tetlock evaluates the predictive abilities of experts by analyzing 27,451 verifiable predictions made by 284 world-renowned experts over more than 20 years. He finds that expert predictions are often no better than random guesses and identifies two types of thinkers: 'hedgehogs,' who are confident in their single, overarching idea, and 'foxes,' who are more eclectic and adaptable. Tetlock argues that foxes are generally more accurate in their predictions due to their ability to consider multiple perspectives and adapt to new information. The book also explores how the media often favors hedgehogs for their confident and decisive statements, despite their lower accuracy.
The Art of Learning takes readers through Josh Waitzkin’s unique journey to excellence in both chess and Tai Chi Chuan. The book explains how a well-thought-out, principled approach to learning separates success from failure. Waitzkin discusses how achievement is a function of a lifestyle that fuels a creative, resilient growth process. He shares his methods for systematically triggering intuitive breakthroughs, honing techniques, and mastering performance psychology. The book also emphasizes the importance of embracing defeat, making mistakes work for you, and turning weaknesses into strengths. It is divided into sections that cover his rise in chess, his transition to Tai Chi, and the similarities in preparation and execution between the two disciplines.
This book offers a unique blend of practical advice and sound theory, drawing from various sources and disciplines such as casino gambling, horse racing, psychology, and evolutionary biology. Mauboussin emphasizes the importance of a multidisciplinary approach to investing, covering topics like investment philosophy, psychology of investing, innovation and competitive strategy, and science and complexity theory. The book is written for professional investors but extends beyond the world of economics and finance, providing tools to better understand concepts of choice and risk. It includes fresh thoughts on human cognition, management assessment, game theory, and the mechanisms driving market mood swings, making it a valuable resource for long-term financial results.
In this book, Michael Mauboussin helps readers understand the interplay between skill and luck in achieving successes and failures. He provides a framework to analyze the relative importance of skill and luck, offering concrete suggestions for applying these insights to improve decision-making. The book covers various concepts such as the continuum of activities from pure luck to pure skill, the importance of sample size, and the use of tools like checklists to enhance performance. Mauboussin draws on examples from sports, business, and investing to illustrate his points, making the book a valuable resource for anyone seeking to make better decisions in both professional and personal life.
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Michael Mauboussin (@mjmauboussin) is Head of Consilient Research on Counterpoint Global at Morgan Stanley Investment Management.
Prior to joining Counterpoint Global, Michael was Director of Research at BlueMountain Capital, Head of Global Financial Strategies at Credit Suisse, and Chief Investment Strategist at Legg Mason Capital Management. Michael originally joined Credit Suisse in 1992 as a packaged food industry analyst and was named Chief U.S. Investment Strategist in 1999.
Michael is the author of The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing, Think Twice: Harnessing the Power of Counterintuition, and More Than You Know: Finding Financial Wisdom in Unconventional Places. More Than You Know was named one of "The 100 Best Business Books of All Time" by 800-CEO-READ, one of the best business books by BusinessWeek (2006), and best economics book by Strategy+Business (2006). Michael is also co-author, with Alfred Rappaport, of Expectations Investing: Reading Stock Prices for Better Returns.
Michael has been an adjunct professor of finance at Columbia Business School since 1993 and is on the faculty of the Heilbrunn Center for Graham and Dodd Investing. He received the Dean's Award for Teaching Excellence in 2009 and 2016 and the Graham & Dodd, Murray, Greenwald Prize for Value Investing in 2021.
Michael earned an A.B. from Georgetown University. He is chairman emeritus of the board of trustees of the Santa Fe Institute, a leading center for multidisciplinary research in complex systems theory.
Please enjoy!
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[07:12] Latin roots.
[09:14] No business education? No problem!
[12:15] The best food industry analyst.
[15:36] Consilience.
[19:58] Complex adaptive systems.
[23:26] Diversity.
[26:23] The wisdom of crowds.
[32:42] The minimum effective dose of cognitive diversity.
[36:02] Designing experiments.
[43:49] Against the Gods and Complexity.
[49:56] Value investing and the Santa Fe Institute.
[53:57] A brief 21st-century asset class tour.
[57:47] Base rates and horses.
[1:06:16] Good vs. great investors.
[1:13:22] Expanding options when making decisions.
[1:18:56] Favorite failures.
[1:20:35] Counteracting overreliance on experts.
[1:24:34] Intuition.
[1:34:15] Time management tenets.
[1:40:59] Parental resources.
[1:43:42] Perspectives gained by learning about complex adaptive systems.
[1:46:12] Recommended reading.
[1:47:32] Michael's billboard.
[1:50:33] Parting thoughts.
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