My Favorite Books - 2016 Edition

I am deeply jealous, albeit slightly confused, of people who read over fifty books a year. I try to read around fifteen, and even then, I have trouble remembering what I read a few months after the fact. This is normal, of course, as the act of remembering information is a proxy of instituting that information in your daily thinking. If you don't think about it, you forget it. That's why the amalgam morning headlines you read with your first cup of morning coffee are forgotten by the time you have your third cup. The information comes in one ear and comes out the other. What comes in easy goes out just as easy. 

But some things stay with you. Out of the few thousand articles I read this year, I can recall maybe three or four that had a lasting impact on my thinking. That makes you wonder: was it even worth reading all of those articles in the first place? For me, the answer is an unequivocal "probably not." As I've publicly stated before, going forward in 2017, I will decrease my time spent reading news and increase my time spent reading books. Time is limited, knowledge and information are not. Your goal as an intellectually curious person, I believe, is to maximize the gathering of knowledge and information while minimizing the time spent garnering it all. 

With that preamble out of the way, let us look at some of the books that are worth remembering, just as we did in 2015

The True Believer

Most books are too long and cover too little. This book is the opposite of that. If you had to cram as much wisdom per sentence, you would have a hard time matching The True Believer. The book is all about mass movements; how they form, what keeps them in power, and finally, why they eventually fail. What makes it especially interesting is the author, who was a self-educated drifter and longshoreman. You will not find any pseudo-intellectualism in his writing. Here are some quotes that resonated with me:

When a mass movement begins to attract people who are interested in their individual careers, it is a sign that it has passed its vigorous stage; that it is no longer engaged in molding a new world but in possessing and preserving the present. I ceases then to be a movement and becomes an enterprise. 

When people revolt in a totalitarian society, they rise not against the wickedness of the regime but its weakness.

[On what makes a good leader] What are the talents requisite for such a performance? Exceptional intelligence, noble character and originality seem neither indispensable nor perhaps desirable. The main requirements seem to be: audacity and joy in defiance; an iron will; a fanatical conviction that he is in possession of the one and only truth; faith in his destiny and luck; a capacity for passionate hatred; contempt for the present; a cunning estimate of human nature; a delight in symbols (spectacles and ceremonials); unbounded brazenness which finds expression in a disregard of consistency and fairness; a recognition that the innermost craving of a following for communion and that there can never be too much of it; a capacity for winning and holding the utmost loyalty of a group of able lieutenants. 

The knowledge in this book can be applied almost anywhere - markets, technology, or your own leadership.

The Lessons of History 

History is a collection of stories that help you pattern match. When we live in a world filled with social media echo chambers and filter bubbles, it is important to be able to take a step back from the news and take a deep look at what's really going on. History lets you do that because the outcomes of each event are known. The patterns (stories) are there to be absorbed, and the matching (making links to the present) you must do on your own. More often than not, pattern matching results in a successful decision, but there are times it can hurt (a deep background in history and patterns can make you jaded and hesitant to act, whereas naivety encourages participation, even if through sheer inexperience). The Lessons of History is a course on the patterns our society goes through, and I use it to think about today. 

So the first biological lesson of history is that life is competition. Competition is not only the life of trade, it is the trade of life - peaceful when food abounds, violent when the mouths outrun the food. Animals eat one another without qualm; civilized men consume one another by due process of law. Co-operation is real, and increases with social development, but mostly because it is a tool and form of competition; we co-operate in our group - our family, community, club, church, party, "race", or nation - in order to strengthen our group in its competition with other groups. 

Intellect is therefore a vital force in history, but it can also be a dissolvent and destructive power. Out of every hundred new ideas, ninety-nine or more will probably be inferior to the traditional responses which they propose to replace. No one man, however brilliant or well-informed, can come in one lifetime to such fullness of understanding as to safely judge and dismiss the customs or institutions of his society, for these are the wisdom of generations after centuries of experiment in the laboratory of history. 

So the conservative who resists change is as valuable as the radical who proposes it - perhaps as much more valuable as roots are more vital than grafts. It is good that new ideas should be heard, for the sake of the few that can be used; but it also good that new ideas should be compelled to go through the mill of objection, opposition, and contumely; this is the trial heat which innovations must survive before being allowed to enter the human race. 

Before I tackle any business decision, I try first to find some sort of historical precedent as to the outcome. If the outcome is beneficial in my favor, I proceed to think deeper about the problem. If the outcome is negative, I reevaluate whether the historical apology is an apt one, and if it is, whether this is a decision that is worth pursuing. History doesn't repeat itself but it often rhymes.

Fooled by Randomness 

We are often assigned books to read at an early age, with the ultimate goal of having these books teach us something about life. I believe this can actually be detrimental. For a book to be impactful, you must not only understand it from an academic perspective, but also be "ready" for it. Reading a book you are not ready for is detrimental as you are less likely to pick it up sometime again in the future if you did not appreciate it the first time around. When I first read Fooled by Randomness a few years ago, I didn't fully appreciate the lessons it told. For this reason, I decided to re-read it this year, despite it not resonating with me years ago. And I'm very glad I did, for it has changed the way I approach certain situations in my life. 

My lesson from Soros is to start every meeting at my boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.

People do not realize that the media is paid to get your attention. For a journalist, silence rarely surpasses any word.

Lucky fools do not bear the slightest suspicion that they may be lucky fools - by definition, they do not know that they belong to such a category.

The first lesson I took away from Fooled by Randomness is that the magnitude of an event is far more important than the frequency with which it occurs. This is simple to understand in the case of investing. In the first scenario, let's say you have $100 to invest, and you do so by investing $1 in 100 companies. Each of these investments returns 5x the initial capital invested. In the second scenario, you still have $100 to invest, but ninety-nine of your investments fail, and only one returns 1000x. In scenario one you make a total of $500 ($1 x 100 x 5). In scenario two you make $1000 ($1 x 1000 x 1). Frequency is overrated; magnitude is underrated. There is another application of this very same idea to networking. For work, I often have to attend conferences and various meetups. In the past, I usually opted to having short conversations with a large amount of people. These conversations tended to be chit-chatty in nature, and very rarely led to any sort of lasting relationship. More recently, however, I have pivoted to speaking with only one or two people at a conference, but giving them much more time and attention. This has been incredibly beneficial, both from a relationship-building perspective, but also for building friendships. Again, the magnitude of conversation mattered much more than the frequency of it.

The second lesson comes in the form of how I view luck vs skill. Taking advice from successful people is a popular pastime. But is it possible to separate how much of their success is attributed to luck vs skill? This is a question to the answer of which I am still trying to determine. This much I have learned, however: do not take advice from people who have have gotten rich based on the outcome of one event (more likely than not that advice is not reproducible and was the result of luck); take advice from those who have a consecutive record of success (it is more likely than not that skill was involved rather than luck); be wary of the advice from experts as soon as that advice enters a field they have not been successful in (skill does not often translate well to other topics); luck can be increased by rolling the die more times (take chances, fail often, learn, and move on). 

And with that, let's mark an end to 2016 and look forward to a memorable 2017. I know I haven't been great at keeping this blog updated, but thanks always for reading and keeping subscribed.