Books 2015 Q1 & Q2

matthias on 2015/08/15

The first half of this year has been a tremendous episode for me reading-wise. I almost doubled my reading compared to the last years, coming in at 28 books. I’m not sure if that’s a good thing because one must always wonder where the additional reading time came from (assuming I’m not suddenly reading more efficiently). I believe, however, that I read most voraciously at times where I didn’t have many other choices, e.g., during travel times or at night where I was too tired to pursue more creative endeavors.

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If I had to recommend one book, I’d go with Lorimer’s letters from a self-made merchant this time. The timeless wisdom there just spoke to me. If you’re interested in investing, but don’t want to get too involved, I’d go with Faber’s global asset allocation.

General

  • Kavadlo - Raising the Bar; Kavadlo describes how Pullup - Dip - Hanging Leg Raise work together and how they link together in the Muscle-Up. Supplement exercises like dips and handstand pushups balance out the overall pull-heavy program. This book was highly inspiring for me. I actually switched my program over to a grease-the-groove like program for  a while because what I did felt stale and stress at my job had increased; let’s hope this goes somewhere.
  • Randers - 2052; This book is (supposed to be) the successor of the widely popular “Limits to Growth” (wiki) study and book from 1972. After 40 years, one of the then many authors, discusses why reality did not play out as their simulation had predicted back then (we should’ve run out of oil already, for instance) and why we are still not off the hook. Randers is somewhat hopeful that solar technology could save us but we’ll probably maneuver ourselves into a very ugly situation with too much CO2 and global warming first before we consider making serious changes. Having only a single author this book certainly carries less credibility than its predecessor and I am leaning towards more optimism in human ingenuity. Nevertheless, the advice he gives towards the end of the book is very valuable (think about whether your house is in a possibly soon to be inundated area; go see important touristic sights as soon as possible if you care; accept that virtual reality will be the best entertainment when there’s just too many of us).
  • Brand: Whole Earth Discipline; Reading Brand’s book was really an experiment in confirmation bias for me. I loved how he describes nuclear power as a necessity to battle CO2 issues. When it comes to genetically engineered agriculture, I am not on the same page however. Here, I really like Taleb’s point of view who says that observing something for a while without noticing any danger doesn’t prove that it’s safe at all.
  • Aung San Suu Kyi - Letters from Burma; I had noticed this book in an exhibition about Burma in Munich and borrowed it from the library shortly afterwards. While it is an enjoyable read, it also made me think why the regime has been able to sustain itself for so long and how life might be like in such conditions.
  • Lorimer - Letters from a Self-Made Merchant to His Son Being the Letters written by John Graham; I became aware of this book through the Farnam Street newsletter. Coming from the 19th century, it promotes classic (and mostly timeless) values in a beautiful and enjoyable fashion. Highly recommended!
  • Ariely - Upside of Irrationality;In his second book (of the bundle I bought anyway), Ariely describes how we can make our own irrationality work for us and what we should avoid. See my notes for the gist of the book: KauerNotes-Upside_of_Irrationality
  • Joel - Ctrl Alt Delete; Joel writes about changes in the job market, especially with respect to marketing. He argues that businesses must create useful content for customers if they want to keep their attention. I liked (because I agreed with?) the main message of the book. I took a new nugget from his strategy of not enabling any notifications on his phone. I disagree with some of his advice however. Classic jobs may be gone, but the new jobs may be much more temporary than most would like as well. Start-up culture shouldn’t only be about working long hours to meet deadlines. Small teams profiting from low communication overhead and high dedication are at least as important. He also understates the importance of silence for getting work done (he really likes open space, communicative offices) but that may be his field. Finally, only history will tell whether we will really not have pencils and keyboards anymore at some point of our lifetime. I doubt it. The death of paper has been proclaimed many times and we’re still happily using plenty of it.

Finance

  • Schwager: Market wizards; In this must read for everyone interested in trading Schwager interviews some of the biggest and most successful traders of our time. I highly recommend it!
  • Covel - Trend Following;  Covel does justice here to the performance of the great trend followers (who pursue a certain family of trading systems). There is some advice on how to construct a profitable system, but more importantly there is plenty of guidance on what to focus on in the first place. It’s essentially a book that points you vaguely into the right direction but leaves a lot of research and understanding to you. In spite of or now that I have understood more (3+ months since I read it) I would say because of this approach, I highly recommend it!
  • Kindleberger, Aliber - Manias, Panics and Crashes; A classic that details every speculation bubble we had over the past centuries. Interesting to see that their frequency increased the more connected the world became. The book is written in economic jargon and somewhat textbook-like. I often felt like the author is re-explaining things. I read the 6th edition btw, the older ones are supposed to be more concise if we trust Amazon reviewers.
  • Rickards - Currency Wars; Book starts out with very personal vision of a return to the gold standard in a war game simulation. It was a very interesting read and made me aware how much we are relying on the dollar as a reserve currency. I would’ve appreciated some more analysis from a non-US perspective and some more practical guidelines for the little man.
  • Tharp - Super Trader; A tremendously useful book in my eyes. There’s somewhat more psychology and meditation talk than I would’ve expected; there are many exercises that make this a non-straightforward read. I’m still working on them of course. The instant value I got is the explanation of position sizing and its importance. Besides that, Tharp mostly preaches stop losses, early loss taking and letting profits run.
  • Faber - Global Value; Author evaluates the performance of a CAPE-based global portfolio. Note: Faber runs Cambria; many interesting ETFs there.
  • Faber - Global Asset Allocation; Faber evaluates all weather strategies and points out that risk parity is not the only way to achieve low volatility medium-sized returns. Very interesting book that motivated me to look into my own strategies again.
  • Tresidder - How much money do I need to retire?; I bought the Kindle version of this book a long time ago. Maybe I’m being overly critical, but the book didn’t really speak to me. The author retired after working as a hedge fund manager at the age of 35 and seems to be somewhat unaware of the struggles that the more average people face. If you’re interested in fast retirement I’d much rather have you read Jakob Fisker’s ERE or Pfau’s paper/blog post about withdrawal strategies.
  • Greyserman, Kaminski - Trend Following with Managed Futures: The Search for Crisis Alpha; I skimmed this in the library after hearing about it on the trend following podcast. I must admit that it was above my level unfortunately. I like that they examine a vast amount of data, but I was surprised how complicated they describe what I believe is essentially a moving average trading system after all.
  • Tharp - Definite Guide to Position Sizing; This book was heavily pointed to in Super Trader which I greatly enjoyed. It contains a vast selection of position sizing strategies which makes it very unique. Many of these strategies may be somewhat obscure however and the most important ones are already in Super Trader. Nevertheless, I recommend this book. Warning: This book is difficult/expensive to obtain. I read it in the reference room of the Singapore national library.
  • Terry, Schwartz, Sun (Goldman Sachs) - The future of finance part 3 (download link - consider googling if down, should be free), Goldman Sachs (in early 2015) describes on ~60 pages what the next trends in finance look like. Wealthfront-like automated advisers (in particular for the currently under-served folks with high income but low equity), Crowdfunding, mobile payments and international transfers are the big topics for them. Notes I made: KauerNotes-Future_of_Finance_3b
  • Antonacci - Dual Momentum Investing; tremendous book about combining relative and absolute (or trend following) momentum investing. The suggested strategy is explained in a few chapters and can probably be found in the author’s papers as well. The book helps add the conviction you require to actually trade it. Antonacci delivers insight on smart beta, buy and hold as well as other investment strategies. See my notes for more details: KauerNotes-Dual_Momentum

Health & Fitness

  • Little, McGuff - Body by Science; A research-based book about training. The authors go over the literature to debunk the efficiency of running for fat loss, then label most common exercise programs as begin either too dangerous or causing too much attrition. They then advocate high intensity training (HIT), an approach from the 1970’s (Nautilus Fitness) that sounds a bit too good to be true. By properly fatiguing muscles once a week we can have the optimal stimulus for muscle growth and strength gain. I’m not 100% convinced because the idea has been around for so long and never really took off in spite of its obvious appeal. I will nevertheless try it for myself and see how it goes. For more notes and details, see my notes: KauerNotes-Body_by_Science

Self-Improvement

  • Michael Lum: Who broke my rice bowl
  • Michael Lum: From beggars to millionaires
  • Rath: Strenghtsfinder 2.0; I did the test (note that every book includes only one coupon for their online test) after it was recommended to me by two individuals whose opinion I highly value. Nevertheless, I feel that the insight I have gained from this so far did not help me that much. It’s also obvious that this book is a sales pitch for a lot of other products. Basic MBTI tests I took online and compared with people close to me have told me more about my interactions with them.
  • Altucher - Choose Yourself!; Altucher promotes the fall of the middle class and job security. Again? Yes, but it comes from a man with experience picking himself up and (re-)starting from scratch. Among others I loved the Simple Daily Practice where you practice one meaningful thing every day, the reasons for being an entrepreneur and the practicality he brings to everything (start by finding customers instead of VC backing, get your product right and forget networking)
  • Godin - Linchpin; In this book about making yourself indispensable, Godin postulates that the current system is broken and that we must bring our humanity, our art back into a work system that is driven by checklists and procedures to be followed. I found his expansions on what constitutes art, on motivation, and our inner resistance extremely valuable. Most importantly, I believe that his idea that we can define ourselves through our work and our contributions more than just via our resume can motivate and give hope to everyone. Here are more notes from me: KauerNotes-Linchpin

Fiction

  • Verne: Paris au XX siecle; Discovered long after the death of the author, this book contains a remarkably accurate, yet sad description of our times where the main valuation metric has become money creation. Certainly an interesting read!
  • Lefevre - Reminisces of a stock operator; Early 20th century investor talking about how he essentially trend-followed into riches by reading the tape and buying on strength, selling on weakness. This is supposedly the earliest book on trend following and it’s entertaining to read as well making it a clear recommendation from me as well.
  • Pratchett - Going Postal (Discworld); The first book I read from the Discworld universe. It was recommended to me personally and I must agree that Pratchett’s wit and humor is indeed special. Highly entertaining read!