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Good Reading -- July 2017

Good Reading -- July 2017

Philip C. Ordway

Essay/talk Here is a copy of a talk I gave at John Mihaljevic's excellent conference in Zurich last month. The goal was to "update" Charlie Munger's famous talk "The Psychology of Human Misjudment" to include more recent examples and the work of Kahneman and Tversky. The best part is probably the contribution of Jason Zweig -- collaborator with Kahneman on his book and leading expert on all things behavioral and investing -- who was kind enough to share his thoughts. A big thank you to him for that and to John for hosting an excellent event. Books

  • Thinking, Fast & Slow -- This was the third time I've read the book from cover to cover, and I still ate it up. This one is firmly entrenched on my Mount Rushmore.

  • Influence: The Psychology of Persuasion -- I re-read this classic too, in conjunction with Kahneman's book and my "Psychology of Human Misjudgment" project (see below). Way ahead of its time and highly recommended for anyone who's missed it.

  • Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street -- This is one analyst-turned-journalist's tail of the long case against Steven A. Cohen. The book got incredible reviews, but it didn't really click with me for several reasons. I put it down about halfway through.

  • The Cubs Way: The Zen of Building the Best Team in Baseball and Breaking The Curse -- This is not a Moneyball-style exploration of the Cubs' front office, but it is an interesting collection of biographical sketches and little anecdotes. (Examples: The championship parade in Chicago was apparently the largest peaceful gathering of humanity ever seen in the Western Hemisphere. This was the first World Series game at Wrigley ever broadcast widely on television. Joe Maddon lives by the "praise publically, criticize privately" mantra.) I liked some of it but not enough to finish the whole book.

Facts and Figures

  • Vanguard is a >5% holder in 491 S&P 500 companies, up from 116 in 2010. (Source: BAML)

Quoted "As the biggest earthquake ever recorded in Japan rocked the Roppongi Hills skyscraper in central Tokyo, Makoto Yamada put on his helmet, dropped to his knees, and traded. 'We had an option to leave, but we couldn’t leave the position at the time,' the 39-year-old former Goldman Sachs Group Inc. quant said, recalling the March 2011 quake and hours of aftershocks that he and some trader colleagues braved from the bank’s offices on the 48th floor. My 'life is important, but protecting the P&L is more important.'"


  • On GE and the Myth of the CEO Superhero -- Roger Lowenstein busting two pervasive and pernicious myths: that corporate dealmaking is an accretive activity (across all deals) and that CEOs are or even can be omnipotent.

  • How I lost my 25-year battle against corporate claptrap -- This is a great column about the endless rise of nonsensical business jargon.

  • Jamie Dimon interview -- Some interesting comments from about education, infrastructure, economic growth, the Trump administration, business-society partnerships, and more.

  • "Any good job is a good job. This whole concept of a dead-end job? It's not true. I've heard it my whole life. Jobs lead to dignity. If you're good at the first, then you can get the second. Jobs lead to household formation. Jobs are a better solution for society." (That reminds me of Charlie Munger's remark that the most important educational institution in America is McDonald's. It often gets derided as a "McJob," but it has effectively trained tens of millions of people to show up every day on time, do a job, and take home a paycheck. I think he has a point.)

  • A U.S. Shoe Town Tries to Rebuild from Warren Buffett's "Worst Deal" Ever -- This is an interesting look at the infamous Dexter Shoe Co. as well as the trials and tribulations of "reshoring" an industry.

  • "Carlos Kaiser" -- Here is a brief article (and here is another) about "the greatest football who never lived." The man known as Carlos Kaiser used an attractive facade and social proof to completely fabricate a two-decade career in professional soccer despite no demonstrated ability to actually play the game.

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