Nicholas’ 2020 Reads

  1. In Defense of Elitism by Joel Stein – Enjoyable read that actually lessened my resentment of the elite. Stein doesn’t offer a solution for the rise of populism or of polarization in the world, but he does offer a set of entertaining stories that give you better appreciation for the variety of people and world views in our country. And with his humor and relatability, he offers an example of how very differently-minded people can get along. As I read this book, I caught myself getting frustrated with someone’s worldview, only to end up laughing out loud by the end of the page. We need more humor like this to remind ourselves not to take life so seriously. I especially do when it comes to this stuff. No one in this book comes out unscathed, but everyone remains relatable (or at least worthy of acceptance).
    • Near the end he even got me to switch up my thinking on the role of government. Our government doesn’t necessarily exist to execute the will of the majority. You could actually make a stronger case that it exists to prevent the majority from squashing the minority. Government moves slow, and that’s a feature, not a bug (as I’m sure many Democrats appreciate today, and many Republicans will appreciate at some point in the future). Moreover, the stupid things the government does (including Oregon’s frequently anti-business government) don’t necessarily flow from the offices of malevolent or misguided bureaucrats, but represent a moderated version of the stupid shit that your average idiot voter wants. So really my problem isn’t with the government so much as it’s with my fellow citizens and their refusal to entertain conflicting ideas.
    • The rise of populism isn’t a good thing, because it doesn’t represent the de-ossification of a decrepit institution so much as the removal of reasonable restrictions on the politicians representing the mandate of thoughtless idiots. There’s a concept that is somewhat widely appreciated in the world of finance, investing, and economics known as “second order thinking.” Second order thinking is a tool that looks beyond the immediate effects of an action, and attempts to predict and understand the potential for unintended consequences. Prohibition of alcohol was intended to create a sober society. In actuality, it spawned a thriving black market for booze that, in turn, fueled the rise of organized crime. Most people (ie your average voter) are terrible at this kind of thinking, especially when it comes to imagining how getting what they want might not be good for them. They fail to see unintended consequences. Probably, having thoughtfully chosen, and reasonably informed people running the day-to-day and big picture is a reasonable alternative. You might even want to pay some people in government a higher salary to attract people who are both intelligent enough, and capable enough to handle this. Good god who have I become?
  2. Harry Potter and the Sorcerer’s Stone: Through December and early January Michelle and I read to each other in 1-chapter increments. It was really enjoyable. Solid book, and it’s kind of nice that the characters and voices are already established, which makes it easier when you go to do voices for characters, and makes it easier to come up with your own take. I enjoyed reading Harry as a nasally whiner, and Ron as Napoleon Dynamite. Plus, I do a mean Draco.
  3. The Most Important Thing by Howard Marks – This is high on my “Investing Books Worth Owning” list. My mom gave it to me as a Christmas gift, along with a note which reads, “I hope this adds ‘value‘ to your library.” The joke she’s making here is that Marks is an accomplished value investor praised by Warren Buffett himself. I am proud of my mom for knowing this, though I worry how much time I’ve spent talking about value-investing with/at her for this to have stuck. Unlike me, she has other things she’s more interested in. For the investors reading this, I can’t recommend this book highly enough. For the rest of you, just hire someone who likes reading this sort of thing. You and your advisor will both be happier (especially if that advisor is yours truly).
  4. Elon Musk by Ashley Vance: What a fascinating life this guy has had! I’m not sure if this is a book full of traits to emulate or traits to avoid. He is such a hard-driving risk-taker that he accomplishes amazing things. Yet because of all the fallout in his personal life, I really wouldn’t trade lives with him. He is perennially on the brink of bankruptcy, yet today is among the richest handful of people on the planet. He uses his wealth aggressively and for the future benefit of humanity, and I’m glad there are people like him.
  5. Atlas Shrugged by Ayn Rand: I struggled with this book for over two years, reading it in between other books. At one point, when it had been on my reading list for over a year, I wondered in a blog post whether I wouldn’t be better off dropping it and moving on to something else. Yet, I sensed something essential in this book that I needed. Was it excellence? A great story? Inspiration? No. But I did gain these lessons:
    • You need a duality of logic and feeling. Rand does not place much value on feeling, and places complete emphasis on logic. But what occurred to me in reading her book, is that your brain isn’t fully logical, nor does it need to operate solely on logic to be effective. As I see it, there are two parts to your brain. The conscious part speaks in words and reason. You control this part, and use it to examine ideas critically, and to make thoughtful decisions. I think it is critical that this part be grounded in logic, facts, and an objective understanding of reality. You abandon this “technical” brain at your peril. Yet there is another part, which I think Rand takes for granted. Possibly, as a creative, she is naturally strong in this second area and takes it for granted. This is the subconscious brain, involved in creativity and dreaming (both the waking and sleeping kinds).
    • I have become fascinated with this part of my mind over the past several years. It is a little voice that speaks in pictures and feelings, guiding me to surprising places and new ideas. As much as possible, I want to live in harmony with it, and to better understand its uses and its limits. I often ask it questions, and it replies with frowns, nods, and stomachs full of rocks, as well as questions of its own for me (conscious me) to explore.
    • Creative writing in particular is an ongoing dialogue with this little voice. It speaks a feeling, which my conscious brain then translates and critiques, and sends back with another question. All day long my brain amuses itself with questions sent back and forth.
    • But the trick is in knowing how to integrate the two voices when making decisions. You shouldn’t let pure logic drive your choices, because your brain can’t consciously process the full set of data required to make an optimal and rational decision in all cases. Often, you’ll feel something with your gut that is worth exploring for reasons you have yet to discover. That exploration is an adventure. It begins with somewhat of a blind leap of faith, yet you’ll run into trouble unless you engage the conscious part of your brain to guide you safely along the path.
    • I think in writing Atlas Shrugged, Ayn Rand may have relied too much on the “thinking” part of her brain. The novel is long, and it is dense. It reads at times like a legal contract trying to squeeze out all the potential misinterpretations or exceptions to what the document proposes. Worst of all is when her characters give long speeches on relatively abstract concepts like logic, and reason, and truth. These aren’t arguments so much as a long string of claims. She makes her best case, not when a character grandstands on her behalf for up to 20-odd pages, but when presenting the world that results from the abandonment of personal responsibility. The dystopian America she presents is entitlement carried to its logical conclusion. That, not the fiery rants of protagonists, is what compels me. I think if she had trusted more to the little voice in her own head, this could have been a great book. Maybe she wouldn’t have felt the need to over-explain every concept, or make the villains so flawed and weak against such lionized heroes.
    • That said, I basically like her pro-selfishness philosophy, and see it as preferable to most alternatives. I often hear utterances, often from politicians, that belong in her backwards society. These are statements which begin, “everybody deserves…” or end “…. is a basic human right.” Rights don’t work that way. Rights are a construct we invented and maintain because we figured out that providing and enforcing them makes for a more productive society so that we can all enjoy better lives. Freedom of speech, equality under law, the right to own and improve property, limited liability… All of these things point to more people leading more productive lives. That’s the tension you have to explore when promising anything for free, because ultimately, somebody has to provide the thing you’re promising, and the thing you’re providing has to be worth more than the cost of providing it. What happens in Ayn Rand’s book is that humanity kills the golden goose over a single generation. They demand such a harsh and relentless transfer of wealth from “the productive” to “the unproductive,” that upward mobility, ambition, and hard-work are utterly choked out.
    • Reading this book, I thought of who I want to be, which is I think the most important thing a book can make you do. It made me ashamed of self-pity, and lit a fire in my heart for becoming more and more useful to others. You don’t get anything you want unless you can embrace that. Yet, I fear transforming myself into my best and most productive self, only to be torn down by those people who have not embraced this notion of responsibility. This is a limiting belief. But still, what right to they have to what I am building, to what I am taking this chance on myself to pursue? It will take me another couple years to get back to breakeven in terms of earning even a meager salary by most people’s standards. But I am ambitious and patient, and I see a bigger opportunity than most people dream of. I can only succeed by helping people along the way; fortunes cannot be had (and kept) by theft. So it really bothers me to hear people speak dismissively of rich people, as if they aren’t much good for society. In reality, I think wealth is probably a decent proxy for the net value you’ve provided the world.  Perhaps I am the marginal case such self-styled “policy experts” should consider. If I have no reason to work, I just won’t. I don’t need much money to be happy, but I crave accomplishment, growth, and wealth. If I don’t think I have a good chance of getting those things (and keeping them), I won’t try. You can’t get my best effort by coercing or guilting me. Reading Atlas Shrugged has helped me understand this relationship I have with the society, and what my options are if I don’t think it’s a worthwhile deal. The key is to communicate it and attempt to influence the world towards the deal I can agree to.
    • The other realization I got from this book is that the value of a resource depends on who possesses it. This is the most basic reason a free-market system allows for superior production and living standards than any other system. When resources are constantly being put to higher and higher use, abundance ensues. Consider the same set of ingredients in the hands of a world-class chef vs your average person. One will produce a once-in-a-lifetime meal, the other will produce “food,” or worse, a burned, inedible mess. This also applies to your time. We all have time, the same number of hours in a day. Yet some people get much more accomplished, and can often command a higher daily wage than people who are less effective.
    • Ayn Rand created a panoply of industry titans in her book. These are men and women who could get the impossible done on schedule, invent strange and futuristic technologies, or squeeze profits out of even the most hopeless enterprises. I want to be worthy of inclusion in that Colorado enclave they created (Galt’s Gulch), or whatever equivalent exists in business circles today.  There seems to be an elite club, and I want in. Not for the elitism itself, but for having become the person who belongs there. Maybe this social circle exists only in my imagination, but I want to be the sort of interesting and useful person who can hold the attention of the titans I listen to on podcasts. I want to earn my membership, and I want that club to exist in such a society that it is worth belonging to. I want it to belong to people who gave something great to the world, not those who rose to the top through political maneuvering or grandstanding.
    • That is a goal which I feel constantly inadequate of, yet which I am moving towards with each passing week. I do not know for sure what my path into their ranks will look like, it may be completely unexpected. But for now I imagine working as a money manager who can multiply fortunes, identify great businesses, and offer useful counsel on new adventures.
    • The key is that you need to give people some greatness worth striving for. If all you do is tear down greatness everywhere you find it, you’ll wind up with a hero-less, cynical and backwards-sliding society. The people who would’ve otherwise undertaken their own great adventures will stay home and do what’s mediocre. And why shouldn’t they, if all they get from their neighbors for taking risk is scorn and resentment? We need heroes, to believe in the greatness of human accomplishment. That belief makes it more likely that you and I will do something with our lives worth remembering.
  6. After Dark by Haruki Murakami: Solid Murakami book, one of the more enjoyable that I’ve read of his recently. Writing notes in this list, I think a big part of why I find Murakami so interesting is that he facilitates that conversation between my conscious brain and the unconscious part.
  7. Fellowship of the Ring by JRR Tolkien: Damn fine book. I love how it ages with me, such that I notice different things on each read-through. As a kid, I thought it was all about magic, slaying orcs, and destroying evil. Then in college it seemed to be all about friendship and adventure. Today, what stands out is the way an adventure unfolds as a long series of choices, made with the best wisdom available. Tolkien included a few red flags foreshadowing Boromir’s corruption, which I’ve picked up in the most recent reading. Conversely, I am more and more impressed with Gimli, as well as the hobbits. They are little in stature, but big in heart. The world the hobbits venture into is (literally) too big for them at first, but they prove to be the most important characters of all (even including Merry and Pippin).
  8. The Two Towers by JRR Tolkien
  9. Return of the King by JRR Tolkien – I read the Lord of the Rings Trilogy as a quarantine book club with my friends Logan Greydanus and Dylan McDowell. Spending an hour with them each Wednesday afternoon was often the highlight of my week during a difficult time.
  10. The Hobbit by JRR Tolkien – I read this on in the fall and really enjoyed it. I found a dramatic reading on YouTube, and had the most fun with this book that I ever have.
  11. In Praise of Shadows – Kind of interesting to learn about Japan around the turn of the century, as well as to learn about a design ethos based on low-light conditions.
  12. New Sales. Simplified
  13. Why We Sleep – Can’t recommend highly enough. Really good. Life-changing.
  14. Traction (was okay, probably more useful for larger companies. Lot of focus on employees. I think it should be called momentum, not traction.)
  15. Harry Potter and the Chamber of Secrets (Michelle and I read this to one another)
  16. Harry Potter and the Prisoner of Azkaban (Michelle and I read this to each other too).
  17. Vagabonding by Rolph Potts – Not bad. Pretty entertaining considering it’s just some guy’s philosophy of travel. Not useful except that you should basically feel free to travel however you want, without the expectation of creating “Instagrammable” moments.
  18. One Page Marketing Plan
  19. High Profit Selling by Mark Hunter
  20. Building a Story Brand by Donald Miller – Good book. Probably will reread sometime.
  21. The Science of Storytelling by Will Storr – I’ve wanted to get good at storytelling for a long time, and have found that it is definitely a learnable skill. I practice with my involvement in toastmasters, as well as my work as a financial planner. Stories are better than facts, in the way that gold is better than gravel. This book in particular was well-suited to my analytical style, and love of the hero’s journey monomyth. A few takeaways:
    1. Your heroes need a tragic flaw or wound, something that forces them into the adventure, and through which the adventure offers them a chance to resolve this shortcoming.
    2. Your heroes must rise and fall in status. Dynamism in this area is the thing that social creates are most well-wired to perceive and find interesting. Think of the greatest stories: Star Wars, Pride and Prejudice, Harry Potter, Hamlet, Christ…. You see characters constantly rising and being knocked back down.
  22. CFA Level II, Volume V – Fixed Income and Derivatives
  23. CFA Level II, Volume II – Financial Reporting and Analysis
  24. CFA Level II, Volume III – Corporate Finance
  25. CFA Level II, Volume VI – Alternative Investments and Portfolio Management
  26. CFA Level II, Volume I
  27. CFA Level II, Volume IV
    • I’ve been reading this series out of order, but have still enjoyed it pretty well. The plot isn’t really as important as the individual characters, but the overarching themes have been the most thought-provoking of all.
    • I’m getting over the “when am I going to use this?” question. Partly, this is because the content is getting more and more applicable to the work I do in portfolio construction and investment selection, and partly because the most valuable work to be done today isn’t about plugging numbers into the right formula, but in applying high level concepts to practical situations. Increasingly, I see stocks (and other investments) not just as a specific company or story, but as a collection of characteristics that tell me I either want to park money with it or not.
    • In fact, many of the things I’m learning here can be applied to businesses more broadly, such as evaluating Lifetime Value of a Customer through a Net Present Value Framework. This has actually led me to upgrade my own business model and how I think about what I’m doing. Another concept is “duration” and which interest rate to apply to an investment. I have a few articles on these and other topics, written in my journal which I’m working on publishing.
  28. Built to Sell – Excellent book! Written for people with aspirations of one day selling their business (service businesses in particular), it shares some great insights on how to make your business more valuable. The twist? Once you’ve created such a business that can run itself, you may no longer want to sell it! Useful to all business owners and self-employed people, because it forces you to think about how to improve your business. Some keys: narrow down your offering, and productize it as much as possible so that you are no longer the biggest bottleneck for your business. Say no to high-paying custom work; you must commit fully to your transformation to a sellable business.
  29. Double Your Profits in 6 Months or Less – Gimmicky title aside, I love this book. Not only is it full of ideas to consider for your own business, it gets you in the state of mind to make those profits a reality. After reading it, I immediately cut $45/month worth of unneeded expenses, and am on the hunt for more. It also has good insights for generating sales and increasing prices to further improve your margins from the top line. Just a really fun book full of possibilities. Based on my feelings about this book, I’m probably in the right job, working with the right people. My only disclaimer is that you need to take it with a grain of salt. It’s easy to go too far with cutting expenses, and to push too hard on your relationships with customers and suppliers. Short term profits are worth less than the long term value of your business. I think he makes this point in the beginning, but it bears repeating because the more nuanced your thinking, the more valuable this book.
  30. Norse Mythology by Neil Gaiman – Having finished all the Jordan Peterson lectures, I found this extra interesting. You see a lot of the same themes as with other religions, such as Odin sacrificing himself for the wisdom to rule the gods and save them from the giants. Also, giants = nature. Loki represents the incorporation of the shadow self, which is useful and inventive, but also treacherous. Plus stories about Thor are always cool.
  31. The 80/20 Principle by Richard Koch – excellent
  32. Rest by Alex Soojung and Kim Pang – nothing really new here. It’s a parade of examples repeating the same concept.
  33. Exactly What to Say – Phil M. Jones
  34. Pet Sematary
  35. ‘Salem’s Lot

Bailed on:

  1. The Sword in the Stone