Books

Books

When I was younger I read a lot. It was a way for me to kind of escape reality. Not that my reality was terrible, but getting to live so many different lives is exciting. When I went to college I stopped reading, which is ironic, but I was too busy doing college kid things to read and learn. I dropped out of college and joined the Marine Corps. It wasn’t until 2011 when I deployed to Afghanistan that I started to read again. I had tons of time to read, and little else to do most of the time. When I came back I stopped reading again because all that time was now taken up by people, the internet, beer, sleeping in a bed, and other little things.

This year I made it a point to read. This was inspired by many things. In 2015 I started actually saving and investing my money. Something about having kids and realizing you don’t want to work until you die drove me to that. I had very little knowledge about investing, so I started reading here and there. I started listening to podcasts centered around saving money and investing. One common theme is that those people read a lot of books. Patrick O’Shaughnessy is probably the most famous “reader” in that little community. I joined Twitter to get closer to these people and started expanding my “FinTwit” web. Following guys like Morgan Housel, Patrick, Michael Batnick, Josh Brown, and many others has led to some incredible books.

This year so far I have read north of 35 books. I wanted to write a few notes about each one. This list is sort of chronological but I can’t remember the exact order I read them in.

One Up On Wall Street-Peter Lynch presents a strong case for contrarian investing. His track record is remarkable. He basically plowed huge sums of money into solid companies that were being unfairly beaten up for various reasons. This was one of my early introduction in the Efficient Market Hypothesis. I still think in the long-term markets are efficient, but short term people completely destroy any efficiency. I believe Peter proves this with his performance. 4/5

The Undoing Project-This was the first Michael Lewis book I read. He covers wonderfully the relationship between Amos Tversky and Danial Kahneman and their contributions (read: invention of) Behavioral Economics. He does a great job going into their lives as well, and it led me to want to learn more about the wars that Israel fought. One book on my nightstand covers the Six Day War and I’m excited to reach it in the queue. This book inevitably led me to other Michael Lewis books. I loaned this particular one to my boss and he dropped it in a bathtub of water…5/5

Moneyball-I saw the movie so I knew vaguely what to expect. Being a life-long St. Louis Cardinals devotee and baseball player I was excited for this one. The story, as all Lewis-told stories are, is told exceptionally well. This opened my eyes to lots of aspects of the game I hadn’t yet known. It also illustrates how people react when their reality is challenged. As it turns out, people don’t particularly like it when they’re proven wrong. 4/5

Where Are The Customer’s Yachts-This book is hilarious, and makes you think a lot. If you don’t know the background you could read the whole thing thinking it was written in this decade. The closest thing I know of to Fred Schwed today is Jason Zweig. Any industry where you are supposed to be of service to somebody but you enrich your own life more than their own is probably worth being dismantled. 4/5

The Lost City Of Z-This was brought to my attention thanks to a screenshot Michael Batnick posted on Twitter. It tracks an explorers mysterious expedition into the Amazon to search for a lost city he referred to as Z. It was amazing to me that guys did this with their lives just for the glory, because it paid very little and was incredibly dangerous. The expedition was lost, and nobody quite knows what happened to them. It wasn’t until very recently that people realized he was probably right, and we are still discovering very large Amazon civilizations that were far more sophisticated than we ever knew. 5/5

Thinking Fast And Slow-The Undoing Project turned me to this one, and it was outstanding. This is one book I’ll read again. Daniel Kahneman puts his entire life’s work into these pages and you have an incredible path into his genius mind. It is pretty easy to read, and is eye-opening. 5/5

Flash Boys-Another Lewis book which could probably be a movie. I had no idea that High Frequency Trading existed, but this is a great story told inside that industry. While I’m not sure how I feel about HFT, it is hard to like it after reading this book. Sometimes things just aren’t as they seem. 4/5

Misbehaving-Part of my Rabbit Hole Expedition into Behavioral Economics. Written by Richard Thaler, this is a great extension of Thinking Fast and Slow and was the first books I felt I needed to write in the margins. Another one I’ll read again, but is incredibly helpful to get your brain thinking about things in different ways. 5/5

Nudge-Yep, more Thaler. This time with Cass Sunstein they cover how to influence decisions using Libertarian Paternalism. After reading this books a lot of things from the Obama Administration made more sense. I put some of the idea into practice and it has changed the way I interact with people all the way down to my children. 4/5

River of Doubt-Another Batnick one. This books tells the story of Teddy Roosevelt’s Amazon expedition after he was President of the United States. It is amazing to think that a former US President would embark on such a journey. The story was great, and I learned that Teddy could have become a main course for some Amazonian cannibal tribes. 5/5

The Big Short-Another Lewis book that turned into a movie. I have seen the movie, and was please to see the book was pretty similar. This story is remarkable, and we still haven’t learned much from this event. After recently finishing Liars Poker I realized that nothing has changed and we will repeat these mistakes about every ten years. 4/5

When Genius Failed-I had no idea what Long Term Capital Management was until this book. Another great study on people making incredibly mistakes with their money. Like I mentioned earlier, this seems to happen about every ten years. 4/5

Fooled By Randomness-Nassim Taleb is hard to read sometimes, he is either way too smart for me or a rambling idiot. Either way, this was a great book that ties in well to LTCM, the GFC, and other financial events that we never saw coming. What I got out of this is to question people, no matter how “expert” they seem, this includes Mr. Taleb. 4/5

Too Big To Fail-A pretty comprehensive run-down of the GFC. It is hard to believe that nobody went to jail for this crap, but they didn’t. Everything is great until it isn’t. 4/5

Boomerang-Another Lewis book. This wasn’t one of my favorites of his, it seems rushed and impersonal. What I did get out of this is to expect something bad to happen in the global financial markets soon. Not everything is at it seems and we are stretched thin. 3/5

Against the Gods-The classic book on risk. This was eye-opening for me. It combines EMH, history, and money. I had not realized that the way we deal with risk is fairly new, and changes constantly. Some of the things we take for granted today were revolutionary ideas a hundred years ago. We will never deal with risk perfectly, but we are getting better. 5/5

Surely You’re Joking, Mr. Feynman-This was a really fun book to read. Written by the guy who helped build the A-bomb and also won a Nobel in Physics, Mr. Feynman showed me that knowing something is different from understanding it. It helped my change the way I approach learning, and has helped tremendously. This guy knew how to live. 5/5

Shoe Dog-The story of Nike as told my Phil Knight. This guy lived at 100 miles an hour building this company and showed how long it takes to become an overnight success. I read this in two days, and enjoyed it thoroughly. 5/5

The Black Swan-Nassim Taleb brings another one, but I liked Fooled by Randomness better. I almost wish I didn’t read this book because it kind of ruined Taleb for me. His hostility toward those who don’t agree with him is hypocritical in the least. Oh well, he still makes some good points no matter how closed off his mind has become. 2/5

Algorithms To Live By-This was fun, and I suck at math. The grass is always greener, I know now that has been mathematically proven. It has also helped me adjust how I decide things and arrive at conclusions. I’ll likely read this one again. 4/5

The Great Crash 1929-I knew of the Great Depression, everyone does. But I didn’t know really what caused it or how it came about. This book covers it well, and is pretty close to primary source. 4/5

The Aquariums of Pyongyang-This is written by a guy who spent ten years in a North Korean gulag and survived. He then escaped to China and then South Korea. The brutality in NK is mind-boggling. This was another book I finished in a day. 5/5

DIY Financial Advisor-A pretty helpful book written by Dr. Wesley Gray and a few others. This convinced me to reposition my portfolio and simplify, something I knew I needed to do but this gave me the courage. 4/5

Organization Alpha-While I’m not a money manager this was helpful to see how people do manage large sums of capital and things to look out for. I’m sure I’ll be reading it again. 4/5

Adaptive Markets-I really wanted to like this book more, but it should have been half as long. Andrew Lo goes into great detail on the inner working of his AMH that doesn’t so much as challenge EMH as it does complement it. He doesn’t really get into it under the second half of the book and even then it appeared haphazard. It was Thinking Fast and Slow, Nudge, Misbehaving, and several other books all rolled up but unorganized. He still makes some wonderful points and I do think this is a good way to look at markets. 3/5

Endurance-Another Batnick recommendation. I read this book quick, it was wonderful. This made me want to go on adventures but finding them is even more challenging these days. 5/5

The Cardinals Way-This was a Moneyball type book but written about the St. Louis Cardinals. It was interesting to get a deep look into the organization but the book was so poorly written and organized. The author writes columns on baseball, and you can tell, this was just a bunch of columns thrown together. The book had little direction, and I suffered through it. If I didn’t love the Cardinals I would have quit. 2/5

Liar’s Poker-Yep, Lewis again. This was another fast read because he tells stories so incredibly well. The parallels between this and the Big Short are incredible. Just bankers being bankers. 4/5

Fooling Some of the People all of the Time-Written by David Einhorn about his short of Allied Capital. I was pleasantly surprised by this book which I had little hope for once I started. I thought to myself that a book written about one short couldn’t possibly be worth it, especially for how long it was. It was great to see what these guys look for and it peels back the layers on some questionable actions on both sides. 4/5

Zen and the Art of Motorcycle Maintenance-A coworker recommended that I read this book and I’m glad that I did. It has very little to do with motorcycle maintenance. The book tracks the author’s cross country motorcycle trip with his son and his struggle with sanity. It is worth a read, and has left an impact on me so large that I keep the book on my desk and read parts of it during down time. 5/5

Modern Monopolies-A recommendation from Patrick O’Shaughnessy. This was a great read on platform companies and how they grow and succeed or fail. It was pretty eye opening and allowed me to see companies from several different angles. This is one I’ll probably read again and was one of the more informative books for me. 5/5

How to Lie With Statistics-An older book written in the ‘50s but still incredibly applicable to today. I’m glad I read it because it gave me a new lens to view statistics. As a result I have an incredibly hard time believing anything that is quoted in stats these days. 4/5

Who Gets What and Why-Written by Nobel Laureate Alvin E. Roth this book was actually pretty disappointing. The information on market construction was interesting but it was incredibly repetitive and seemed rather self-aggrandizing. The author just talks about the great things he has done in market construction for 200 some odd pages. Could have been a 20 page white letter. 3/5

Dead Companies Walking-A recommendation from a Twitter friend. This was a fun book to read because Scott Fearon writes like he is just talking to you. He talks in depth about some of his best, and worst, shorts and even some longs he has entered into. It was fun to see another way to view businesses and identify some red flags. 4/5

The Three Body Problem-This is a science fiction book written by a Chinese author. I never read sci-fi but Twitter recommendations were overwhelming. This was an incredible start to the trilogy, and was wonderfully entertaining. The author weaves history, physics and fantasy into a very readable format that kept my attention to the last page. 5/5

The Dark Forest- The second installment in the “Three Body” series. Just as good if not better than the first book, it goes deeper into the science aspect and was really fun. The author explores game theory and society with approachable simplicity and really gets you thinking. I’ve got the last book in the trilogy and can’t wait to start it. 5/5

Finance for Normal People-This book can be summed up as a nice summary of Kahneman, Thaler, Sunstein, Ritholtz and just about everybody else who has explored behavioral economics and how it applies to individuals. This was fun, but at time hard to get through just because the material was mostly a repeat from what I read. If I had read this before all the others I’m sure I would have enjoyed it much more. 4/5

 

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Uncertainty

I found out last week that I would be medically retired from the Marine Corps. This isn’t entirely surprising, I’ve been injured for a while now and the surgery I underwent to fix me just didn’t work. In a place where there are no spares, there is no room for a part that can’t perform the way it is supposed to.

It is comforting to know that I’ll be retired though. This comes with all sorts of perks and gives me a little breathing room that I did not plan on having, but this is still a very uncertain time. The last eight years of my life have been pretty stable.

That may come as a surprise, with deployments ever-looming, field exercises, going in early, staying late, duty, and the always enjoyable 2 am phone calls. But military life is really a stable thing. I always knew when and how much I would get paid, and I usually knew where I was going and why. If I didn’t understand something it didn’t really matter anyway because I didn’t have a choice in the matter. Not having a choice is actually comforting in a way. My family had health care, and if necessary a house would be provided for us on base. So there were really very few big unknowns in my life. Even when I was moved from California to North Carolina they sent movers to the house, they packed and inventoried the entire house, moved it to NC, unloaded the truck and unpacked the boxes. I didn’t have to lift a finger. Anyway, that period of stability is about to end.

I joined the Marine Corps in 2009 while I was studying history at Colorado State University. I was about 3.5 years into my degree and was in the middle of the teaching portion where I was in a real classroom with real students. I was miserable, and I knew that this wasn’t for me yet. I really enjoy teaching and telling stories, but I didn’t have the mindset or the patience at 21/22 years old. I had always wanted to be a Marine since a very early age, around 8 probably. My parents pushed hard for me, their oldest son, to go to college and get a degree. I followed through on their wishes and only applied to Colorado State. All my buddies from high school went to where everyone in St. Louis goes to college, Mizzou, and I just didn’t want to go to “high school 2.0.” In August of 2005 I moved out to CSU and began that chapter. I was a good student, and maintained a good GPA, but just felt like I was treading water. I was studying history and reading about the activity in Iraq and Afghanistan, I feared I was missing my chance. I remember picturing myself as an old man and the regret I would have in not joining the Marine Corps, so I decided to quit school and enlist. Some of you may be wondering why I didn’t just finish school and become an officer. I really don’t know why, I was just ready to move on and I was pretty lazy at that point, enlisting was easier and I could join sooner. In April I swore my oath, in August of 2009 I was on a plane to San Diego for boot camp.

In October of 2011 I was fortunate enough to deploy to Afghanistan with my unit at the time, 1st Light Armored Reconnaissance. It was a good experience, I got to do and see lots of things and it was very informative, I was finally taking part in history. I figure that somebody will be talking about our Afghanistan experience in some way for hundreds of years, and since I took part in that, I’ll live for eternity in some small way. To me, that is pretty neat. When I came back I knew I wanted to reenlist so I did that. Following that I was moved to the East Coast as part of my “incentive” and we came this way in 2013. In the Marine Corps there are lots of unknowns, but you can usually decide what you want to do with some degree of certainty, all you have to know is who to talk to and how to talk to them.

Fast forward a few years and I’m on my out, and with it the certainty of a “do as your told” lifestyle goes with it. I always joke that we are institutionalized like prisoners but that is the easiest way to relate this to civilians. We do things a certain way here, and whether you are in Okinawa or California, the Marine Corps is pretty standard form place to place. The longer you are here, the more strange the “outside world” looks and the more you notice how different we are. This I’ll cover more deeply in a lighthearted post later on. The civilian world is an odd place to us, and the more time we’ve spent “on the inside” the harder this transition becomes. Full disclosure, most of us look down on civilians but say we don’t. It’s hard not to because we get routinely brainwashed that we are special and everyone else is lazy and stupid. We think everybody should join the Marine Corps but fail to realize that if everybody did it would be a disaster.

I think what I’m most afraid of is losing this identity and leaving my little bubble. Lots of guys get out and are just lost, and can’t find a purpose. People ask me what I do, and I get to tell them I’m a Marine. I’ve had several friends and acquaintances that have left the Corps and have killed themselves or very seriously attempted to. It is hard to leave what was literally every aspect of your life and go find something else, another identity. I won’t be “Staff Sergeant Gunn” anymore; I’ll just be a dude. I am determined to not become that verbose, annoying twat who never shuts the fuck up about the Marines, like the high school quarterback who can’t leave behind his glory days. But this really was the best and most meaningful time of my life and now I have to find something else to give me meaning. I testify here and now that I won’t wear an Afghan Vet hat until I’m at least 50 years old; I might get a license plate though.

I have a general idea where I’ll land, but not really. When people ask me what I’m going to do when I get out I usually say I don’t know. Then I get the cross look, like I should know exactly what I’ll be doing. That would be nice, but that isn’t really the way things work. I suppose it would be easier if I knew when my last day would be but I have no idea still. I think it will be January, but I have about 90 days before whatever day that I can get out on what is called terminal. I hope I’ll land somewhere in financial planning, that would be great, but I have to do some things like finish that degree before I can more seriously pursue that. A lot of things are up in there air, and I really just don’t know. I’m keeping an open mind and just want to find something I can be proud of and help some people in the process.

I’m comforted with the knowledge that I am capable of working hard, truly believe that no job is beneath me, and don’t need much money to be happy. That alone gives me some great flexibility. So I welcome this upcoming period of uncertainty and am genuinely excited to see where I’ll be in five years. I’ll miss the Marine Corps (mostly just the Marines) with all my heart but nobody can do this for eternity and I’ve got to get out of the way.