Reading a book can be deceptively expensive. The cost of a new hardcover book on Amazon is usually in the vicinity of twenty dollars, but the real cost of reading any book is the time you spend reading it. If you value your time at fifty dollars per hour and the typical book takes five hours to read, that is a $250 time commitment. And often that commitment is well worth it since you have the ability to absorb the knowledge a writer has poured out onto a page over hundreds or even thousands of hours of effort.
Books can represent a terrific value proposition provided that you avoid the ones that are not worth your time! In addition to hopefully conveying interesting information to readers, writing book reviews helps to synthesize the information and compliments the goal of active reading. Importantly, conveying this type of information does not carry with it the negative aspects of writing about investment ideas. As a result, book reviews have become a more common subject for articles on this website in recent years.
The book recommendations that appear in this article are mostly not related to finance and investing. Although these are all books that I read in 2019, most were not published this year. A similar list of recommendations appeared during the 2018 holiday season and a list specific to investing appeared several years ago. Hopefully these recommendations will provide an interesting starting point for your own holiday season reading or ideas for gifts.
Alexander Hamilton. Ron Chernow’s epic biography of Alexander Hamilton represents the authoritative modern account of the life of one of the most consequential founding fathers. Although often castigated as a monarchist by his rivals, Hamilton had anything but a privileged upbringing. He rose from a position of poverty and family dysfunction in the Caribbean to the heights of American political power in a very short period of time, gaining the trust of George Washington during the Revolution. He parlayed early success into positions of great influence in shaping the Constitution and establishing the foundational elements of American capitalism. Hamilton was a flawed man whose style sometimes led to more antagonism than necessary, but his importance to the success of the American experiment cannot be denied. Chernow has a way of bringing historical figures to life and Hamilton is no exception.
Dignity: Seeking Respect in Back Row America. Chris Arnade left his job as a trader on Wall Street in 2012 to focus on the plight of the poor in America. While still working as a trader, Arnade had a habit of taking long walks through New York City. His willingness to talk to the drug addicts, prostitutes, and homeless people he encountered formed the basis for a more in depth examination of what he calls “the back row” of American society – those left behind in our modern economy. Worse than being left behind, the back row is misunderstood and belittled by the “front row” elites, and this misunderstanding crosses racial, ethnic, political, and geographical lines. Although this isn’t a book about how Donald Trump came to power, it does help to get a sense for the dissatisfaction that makes people willing to make Hail Mary attempts to shake up the system.
The Bed of Procrustes. Nassim Nicholas Taleb is best known for his first book, Fooled by Randomness, which is part of a five volume set called The Incerto. The Bed of Procrustes is probably the least read of Taleb’s work and is also the shortest. As a book of aphorisms, the text is entirely comprised of short statements of a principle or opinion, such as “If you find any reason why you and someone are friends, you are not friends.” Chances are that if you appreciate Taleb’s work in general that you will also enjoy his often witty and profound takes on a variety of subjects from economics to philosophy to practical aspects of life. Taleb is often very polarizing on social media, something that he obviously views as a necessary aspect of his role as a “BS detector”, but the fact is that his insights have proven to be correct and his work extremely valuable even for those who are put off by his often acerbic online persona.
Night. No matter how many Holocaust museums one visits or how many first-hand accounts one reads, it is impossible to fully understand the horror of the crimes of Adolf Hitler’s Third Reich before and during the Second World War. Nevertheless, it is the responsibility of current generations to make an effort to remember what happened as the remaining individuals who witnessed it directly will be gone within the next couple of decades. Elie Wiesel experienced the horror firsthand as a teenager when he and his family were taken to the Auschwitz concentration camp in 1944. His account of the death of his family members and the suffering of countless others has deeply affected readers since the book’s publication over sixty years ago. Wiesel lived until 2016, clearly haunted by his experiences but determined to convey the horror so that such atrocities will not be permitted to happen again. Night can be paired with Dawn which is a story of the moral and ethical choices facing a Holocaust survivor-turned soldier during the war of Israeli Independence.
The Alchemist. Paulo Coelho published The Alchemist in 1988 at the age of 41. Published originally in Portuguese, the book attracted little attention at first and his original publisher cancelled his contract. However, the book went on to achieve great success and has sold over 50 million copies. Coelho did not give up. Like the story of the Andalusian shepherd boy in the book, Coelho had a laser-like focus on his “personal legend”: “It is what you have always wanted to accomplish. Everyone, when they are young, knows what their Personal Legend is.” The shepherd boy in the story had known ever since he was a small child that he wanted to travel in order to see and experience the world. His quest, set in an earlier time, led him from the comfortable pastures of Southern Spain that he had known all his life to the pyramids of Egypt. Along the way, he learned much about himself, human nature, his place in the world, and his ultimate destiny. A grand adventure sure to be appreciated by young and old alike.
Where Are the Customers’ Yachts? Fred Schwed wrote the first edition of this book in 1940 and revised it in 1955, yet far from stodgy and outdated, this book will seem like it was written about investor behavior this year. Contexts and examples change, but the underlying human condition and the follies we encounter never changes. On topics ranging from the investor’s passion for prophesy to inflation to chartists, to economists, to the inability of most people to simply sit and do nothing, Schwed will have you nodding in recognition of some of your own mistakes while bursting into spontaneous laughter. The book is full of gems such as: “When a statistician works up a sufficient reputation for profundity, he is graduated and becomes an economist”. As Jason Zweig notes in his introduction, many investment books can make you think, you can occasionally find something useful, but it is very rare to find an investing book that can make you laugh. Schwed’s classic is such a book.
Walk the Sky. The John Muir Trail in California’s Sierra Nevada mountain range is one of the most scenic pathways in the world. After writing an account of my walk this summer, I received several inquiries regarding the trip. It is difficult to convey the trail in words but, luckily, those with an interest in the scenery can read John Dittli’s Walk the Sky. The book is not a guide for the trail, but instead provides numerous excellent photos of the trail along with accompanying essays. Dittli knows the Sierra Nevada from his decades of exploration and has a unique talent for capturing scenery.
The Prado Guide. Madrid’s Prado Museum is one of the highlights of any trip to the city and is considered by many to be the greatest public collection of paintings in the world. You can easily spend an entire day wandering around the collection. This guide contains full color photos and could be of interest to anyone, but of course is of greatest interest to someone planning to visit the collection. My purpose for including it here is to point out that most people who visit museums either rent audio guides or rely on placards next to artwork. Neither provides a real understanding of what you are actually looking at. It is much more rewarding to invest a few dollars or euros in a proper guidebook and read about what you are looking at in more detail. By doing so, you will also escape the herds of tourists on tours who move from one piece to another with robotically timed precision. Unfortunately, this approach ends up being superficial – a mile wide and an inch deep. Consider investing in a book for your next visit to a great museum.
The Little Book of Valuation. One of the most consistently interesting investment blogs is Aswath Damodaran’s Musings on Markets. Over the past year, Damodaran has made a special effort to examine many of the highly publicized initial public offerings and attempt to provide valuations in cases where most investors would give up in frustration. Most IPOs are priced based on the strength of the narrative presented by the company whereas true investors, as opposed to speculators, care about estimating intrinsic value. Damodaran clearly lays out his assumptions regarding each company and presents valuations for each while fully acknowledging the hazards of doing so in cases where the variables are difficult to forecast. He also provides downloadable spreadsheets so readers can test variances based on their own judgment. The Little Book of Valuation is a 2011 book that lays out Damodaran’s approach to valuation in greater detail.
The Feynman Lectures on Physics. Like many who opted to study business in college, I viewed other subjects mainly as requirements to be met as efficiently as possible. I took science seriously, but only to the point where I needed to in order to secure an A. Information obtained in this superficial manner is usually not retained, and therefore cannot be called upon decades later. If we take Charlie Munger’s advice to learn as many mental models as possible, it is hard to ignore the hard sciences. The Feynman Lectures on Physics, which are also available free of charge, is an excellent way to begin to understand physics, and I have only made modest headway on the first volume this year. Often challenging but never boring, Feynman’s lecture notes are definitely worthwhile for the intellectually curious.
Disclosure: The Rational Walk participates in the Amazon affiliate program and receives a small commission for all products purchased via links on this site.