Monday, December 21, 2015

Books I Enjoyed In 2015

The end of the year is rapidly approaching, and it looks unlikely I'm going to add to this list in the next few days. I modified this list somewhat from last year's in that I decided to include titles that I wasn't reading for the first time. I define "2015 Favourites" as books I can see myself re-reading, while "Honourable Mention" names are things I enjoyed but am unlikely to tackle again. Happy reading, and a very happy end to 2015 to one and all!

2015 Favourites

The Incredible Shrinking Alpha (Swedroe & Berkin): A quick and readable survey of the challenges facing active asset management. Anyone engaged in active management simply must grapple with these issues, as a matter of intellectual and professional honesty as well as to consider the business challenge posed by passive management strategies (be they indexers or rules-based quantitative strategies). Swedroe is a good follow on Twitter too.

The Greatest Trade Ever (Zuckerman): I have a longer post on this one, but it's just a terrific read to understand John Paulson's stupendous success in profiting from the housing debacle of 2007-2009. As I say in the other post, it's hard to write a page-turner about credit derivatives, but Zuckerman does an amazing job.

Efficiently Inefficient (Pedersen): This is a clear and entertaining read on hedge fund strategies. It features interviews with some of the leading lights in the hedge fund world, though I must confess I was a little disappointed with some of the interviews. The main material is excellent, though.

Becoming Human (Vanier): I first heard of Jean Vanier through an "On Being" interview. A philosopher and Catholic social innovator, he started the L'Arche movement for people with intellectual disabilities. His simplicity and compassion were deeply moving.

The Dhandho Investor (Pabrai): I have long heard of Pabrai's book, and finally got round to it this year. I wish I'd read it earlier. It's funny and readable, but a deeply wise book on value investing. His mantra of "Heads I win, tails I don't lose much!" is as good an explanation of how to think about achieving asymmetry in investing as you'll hear anywhere.

The Art of Charlie Chan Hock Chye (Liew): In a year when my beloved Singapore celebrated her 50th anniversary as an independent nation, this sharp graphic novel traces the country's history in parallel with a fictional graphic artist.

The Looming Tower (Wright): Everyone wanted to talk about ISIS this year, but I was a few steps behind. I bought this thinking it was an account of the 9/11 attacks, but it was much, much more. A wonderfully crisp read on the rise of modern Islamic fundamentalism and al-Qaeda.

The Outsiders (Thorndike): An excellent book on how contrarian CEOs created shareholder value, recommended by no less a luminary than Warren Buffett. It's a shame that most CEOs (and boards) think "capital allocation" = doing share buybacks when their stock is at record highs, rather than when it's the most accretive to shareholders.

Buddhism Without Beliefs (Batchelor): Batchelor is one of the giants of secular Buddhism, the movement that distills the wisdom of Buddhist thought while shedding traditional Buddhist ritual and beliefs on cosmology and reincarnation. In this volume, he makes a strong case for understanding the historical and social context in which Buddhism developed. As good as I remembered the second time round.

A Guide to the Good Life (Irvine): This is a wonderful introduction to Stoic philosophy, updating an obscure and misunderstood set of beliefs for modern times. The parallels between Stoicism and Buddhism are interesting, and goes to show you can find wisdom in disparate places if you look hard enough.

Superforecasting (Tetlock): Quite simply a must-read on decision-making and prediction. I think this is one I will read and refer to many, many more times.

The Alliance/ The Start-up of You (Hoffman/Casnocha): I enjoyed these two books by the LinkedIn founders. At times they seem a little too much like ads for LinkedIn, but I think there's a lot of wisdom in here about how to think about careers and organizations in the modern world.

The Essays of Warren Buffett: Buffett is so well-covered that it was hard to imagine that there would be much original in this collection, but I still found it useful and insightful. I did a longer post on the key messages.

Honourable Mention

Exorbitant Privilege (Eichengreen): It's really hard to write a book on the international monetary system for popular consumption. I think Eichengreen does a pretty good job here, although some may prefer a deeper look at specific events (e.g. Ahamed's Lords of Finance and Connolly's Rotten Heart of Europe). Reading it in 2015, it's funny how the book was written at a period of extreme concern about the dollar - something which seems to have vanished from the mainstream. But who knows what people will say in 5-10 years?

Poor Economics (Duflo & Banerjee): I've been hearing about Duflo & Banerjee's work for years, and enjoyed their take on the global fight against poverty. So much of what we think we know about poverty, and the poor, seems to be wrong, but it's gratifying to see people tackling the field in novel ways.

The Hard Thing About Hard Things: Entrepeneur and venture capitalist Ben Horowitz writes about his experiences in the business world. There are some great anecdotes and lessons here. Definitely one for those interested in start-up world.

Leaving Alexandria (Holloway): I've had this on my reading list for ages. In 2003 or so, I discovered a book called "Godless Morality", and was stunned to discover the author was the Bishop of Edinburgh. Since then I have been an avid consumer of Holloway's talks. This autobiography details his eventual departure from the church. While my thinking on religion is more in line with Holloway than Vanier, I preferred the simplicity of the latter's prose. Still, there was much to appreciate here.

The Novice (Schettini): Continuing the theme of those who had given up the robes, Schettini recounts his life as a Buddhist monk. Like Holloway's book, there was much to enjoy, even if the prose wasn't always quite to my taste. The epilogue was my favorite part of this, with Schettini describing the changes in his life after giving up the robes. A shame it's a relatively small part of the book, but it would be impossible to really understand without hearing first about his prior journey.

Benjamin Graham and the Power of Growth Stocks (Martin): This is an unusual take on Ben Graham as a growth investor. Martin argues that the 1962 edition of Security Analysis reveals Graham's shift in investment philosophy.

Damn Right! (Lowe): I hadn't read this since 2006, but decided to pick it up again as I re-explored the value investing classics. I found I enjoyed it less than I remembered. It's possible that Munger has become such a popular subject in the past 9 years that this edition no longer seems quite as original. Still, always worth a read for Buffett/Munger fans. And for those relatively new to the world of investments, it's a wonderful reminder that Munger didn't meet (and go into business with) Buffett till he was 36 years old, which seems positively ancient in the modern age of 30 year-old hedge fund wunderkinds.

The Education of a Value Investor (Spier): Part autobiography, part investment guidebook, part discourse on the good life. Spier's honesty was refreshing. This led me to Pabrai's book. The friendship between the two investors inspired a longer post as well.