Every year I intend to publish our annual book recommendations sufficiently early for those seeking gift ideas. But every year, the list gets cobbled together in a mad rush a few days before the 25th, much like my own Christmas present shopping. Not this year, folks, not this year.
Looking for a cheap yet thoughtful gift for that not-particularly-special someone? Or a good book for the holidays? We’ve got you covered. If you need more ideas, Forager’s 2017 and 2016 book lists are worth a look, or my solo list from 2015.
Leonardo da Vinci by Walter Isaacson
This year I turned 30. While I am still young the idea of aging scares me. Older means more experience but also, generally, aversion to new ways of thinking and doing. Fewer mistakes but also less willing to embrace opportunities to learn and improve.
In this light Leonardo da Vinci’s biography by Walter Isaacson was inspiring. Da Vinci is most famous for painting the Last Supper and the Mona Lisa. But he was also a successful sculptor, architect, designer and inventor. Throughout his life he was entirely unafraid of trying something new.
One might, for a moment, speculate whether da Vinci could have achieved even loftier peaks through specialisation. Rather, I suggest it was his curiosity in wildly diverse areas that was the secret behind his success—the archetypal Renaissance Man. He would take ideas and skills from one craft or industry and transplant them to others.
Of course, da Vinci was working with more raw talent than most of us. But that’s no excuse for complacency. A life well lived means continually learning. You can never be too well-rounded.
Flash Boys by Michael Lewis
Lewis explains how high frequency traders can use an advantage of mere milliseconds to intercept your trade orders and exploit them. He tells different stories explaining the widespread impact. There’s the construction of a fibre optic cable connecting Chicago and New York, allowing those willing to pay for the privilege to engage in legal frontrunning. There’s the arrest of an ex-Goldman Sachs computer programmer for allegedly ‘stealing’ proprietary code from his former employer. And the star trader who quit his lucrative job at the Royal Bank of Canada to set up a new exchange with a more level playing field.
I read this book just before starting at Forager. It feels much more relevant now when I hear Steve and Gareth talking about ‘the bots’ before they place their trade orders.
Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke
What can we learn from a professional poker player? Plenty, it turns out.
Duke’s starting point is that good quality decisions will, over time, lead to good quality outcomes. Duh. But over time does not mean all the time. And that’s the rub. Sports coaches, poker players and, yes, investors get praise or criticism for outcomes.
But thinking that a good (bad) outcome was always the result of a good (bad) decision won’t help. We should be focusing on the quality of our decisions and recognising that even a good decision will lead to a bad outcome some of the time.
There are plenty of other gems in this read—not just for investing but also for life’s other important decisions.
The 7 Habits of Highly Effective People by Stephen Covey
Almost 30 years old, 7 Habits remains a global bestseller today due to Covey’s use of timeless principles. Although commonly referred to as a self-help book, it has been widely used as a business manual that has made presidents, CEOs, educators and professionals more effective in their roles and lives.
Covey presents his teachings in a series of simple habits for solving personal and professional problems and taking advantage of opportunities—I recommend taking notes.
For those not keen on reading or short on time, there is an audio version of the book available. His son, Sean Covey, has also written a simplified version of the book for teens, ‘The 7 Habits of Highly Effective Teens’.
Invoking CIO privilege, I have two recommendations again this year. I’ve had a very enjoyable year on the reading front, with two books by journalists from the Wall Street Journal topping my list.
Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou is the story of Elizabeth Holmes’s Theranos. The company had an appealing narrative—dozens of blood tests from a simple prick of your finger. It attracted some US$700m of funding from high profile backers including the Walton family and Rupert Murdoch. The only problem was, it didn’t work. Carreyrou tells how Holmes, a 19-year old Stanford dropout, sold the world on her story and then went to extraordinary lengths to perpetuate the myth.
Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World by Tom Wright and Bradley Hope. This book isn’t as polished, but the story—of Malaysian ‘financier’ Jho Low—makes up for it.
You may have read that the Malaysian government is trying to recoup more than $600m from Goldman Sachs for its role in plundering the country’s 1MDB sovereign wealth fund. That’s small potatoes relative to the billions stolen from the same fund by Jho Low, whose nefarious deeds are the subject of this book.
How the money gets into his pockets is a story in itself. But the cast of famous people dipping a hand in is worthy of a good fiction novel. From Leonardo Di Caprio to Miranda Kerr, it seems all you need for friends in high places is a fat stash of cash.
The Shanghai Wife by Emma Harcourt
After spending a week in Shanghai earlier this year I was left fascinated by the history of this young city. The Shanghai Wife by Emma Harcourt follows the story of a young woman named Annie who leaves her native Australia to marry a captain who sails up and down the Yangtze River. She ends up staying on in Shanghai without him and finds herself living in the international settlement associating with the gossiping women who Annie finds suffocating.
Annie ends up befriending a local man she meets at the ladies’ club who introduces her to the real Shanghai. She begins to see the city from the perspective of the locals. But this world is far more complex and dangerous that Annie realised and she finds herself caught up in a web of conspiracy and intrigue.
I loved learning about the debaucherous gangster history of Shanghai in an easy holiday read.
Master CEOs: Insights from Australia’s Leading CEOs by Matthew Kidman and Alex Feher
How were companies like Sonic Healthcare and CSL able to successfully create value from international acquisitions where others failed? What was Wal King’s approach in leading an international business with 37,000 employees? This book offers an insider’s perspective.
Kidman and Feher compile a series of interviews with CEOs of Australian businesses that delivered above average shareholder returns over a decade. It glimpses into the philosophies and experiences of leaders that oversaw periods of rapid growth such as Flight Centre, Leighton Holdings and Metcash.
Along the way, you can pick out some common characteristics among these CEOs. They had high emotional intelligence, vision and paid attention to culture. The book is a few years old now. One advantage of letting such a book age before reading is that the survivorship bias inherent in putting such a list together becomes evident. While many of the Master CEOs and their companies kept on winning, others didn’t do so well. Investing is simple, not easy.
Sophia Bergin (daughter of the lazy Patrick Bergin)
One Night in November by Amélie Antoine
This book highlights the horrific nature of terrorism. The book is fictional but set in Paris during the factual attack at the Bataclan music club. It explores the perspectives of different people from a range of backgrounds. The smallest action or decisions can thrust you into a life and death situation. The characters are realistic and relatable. The author gives great insight into their emotional response to the trauma and the bonds that develop afterwards between survivors and their families. I found the book difficult to put down.
Chronicle of a Death Foretold by Gabriel Garcia Marquez, transalated by Gregory Rabassa
The novella takes the perspective of a detective investigating the murder of Santiago Nasar some 27 years earlier. Marquez rebuilds the story of Santiago’s death through a series of interviews with range of characters in the town. Embedded in the gossip, dreams and weather recounts of the townspeople is the perceived inevitability that Nasar would be killed. The investigation is not about the death of Nasar, but rather how the murder could ever have happened if it was so predictable.
Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street by Sheelah Kolhatkar
Grey Edge refers to the act of trading on information that reasonable people might argue is or isn’t inside information, conundrums that give compliance officers heartburn. Black Edge comes from trading on information that offers no such subjective defence.
This is a fascinating and thoroughly researched book on Steve Cohen’s firm SAC Capital. Analysts were paid for performance and black edge was often an important part of their strategy.
It’s a story about the carrots—potentially 8-figure bonuses—and sticks that lead an analyst to form a manipulative faux-familial friendship with a lonely old scientist in the hunt for edge. And the analysts that develop contacts within companies in order to get an advanced ‘read’ on quarterly financial results. It’s about the Darwinian process that allowed Cohen to benefit from the insights of his more nefarious analysts while hiding behind a veil of plausible deniability. It’s about the FBI agents monitoring wire taps week after week trying to turn hunch into conviction. This is a story, ultimately, about a billionaire able to buy his way out of jail time and back into the investment business.
I am not uncertain that many of you will enjoy this book.
If you’ve got any good book, blog or podcast ideas to share, please leave a comment. Thanks.
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Forager Funds is a boutique fund manager specialising in a value investing approach. We offer an ASX listed Australian Shares Fund as well as an International Shares Fund both aimed at delivering returns for long term investors.