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Good Reading -- May 2018


  • Getting There: A Book of Mentors -- I got an autographed copy of this book at the Berkshire meeting in Omaha. I didn't know much about it but the author seemed very nice and the premise was appealing (it is a collection of short biographical essays). I didn't have any expectations, but this book is awesome. I found it to be full of wisdom and inspiration, and I can't recommend it enough.

  • Some of my favorite essays in the book were written by Mike Bloomberg, Sara Blakely, Anderson Cooper, John Paul DeJoria, Craig Venter, Laird Hamilton, and Muhammad Yunus. But they're all excellent.

  • The Warren Buffett Shareholder: Stories from inside the Berkshire Hathaway Annual Meeting -- This is a collection of essays written by people throughout the Berkshire ecosystem: writers (Jason Zweig), investors (Joel Greenblatt, Tom Gayner, Tom Russo), managers (Tony Nicely), and miscellaneous legends like Jack Bogle, among many others. It was compiled and edited by "Essays" author Larry Cunningham, who was kind enough to send me a copy. It is well worth a read for any Berkshire students out there.

  • Fewer, Bigger, Bolder: From Mindless Expansion to Focused Growth -- This a worthwhile book in that the central premise is very valid: Not all revenue is worth pursuing, and almost all companies would be better off focusing their energy/resources in a few areas. There is no Munger/Berkshire in the book, but "invert your way to better customers" would be an appropriate tagline or subtitle.

  • A History of the World in 12 Maps -- I was lured by the title (who doesn't love maps and history?) and the beautiful cover and illustrations. But as the title implies it is an ambitious undertaking, and the writing made for a slog.

Facts and Figures

  • Li Ka-shing recently hosted his final annual meeting for his Cheung Kong group. Since its IPO in 1972 he has generated a compounded annual return of 20.3%. Since Buffett took over Berkshire in 1965 he has generated a compounded annual return of 20.9%. (Source: Bloomberg)

  • 53 years versus 46 years and 20.9% versus 20.3% may not seem like big differences, but the result of compounding is actually massive. $10,000 invested at inception in each company would have yielded $233.7 million from Berkshire and $49.2 million from Cheung Kong.


HK: "I've always tried to look a little bit ahead, at least when I'm sober -- and when I'm not, I look way ahead. [Laughter]"

JR: "Are you sober now?" HK: "Yeah, but not for long."

-- Herb Kelleher, speaking to Fortune reporter Jennifer Reingold in 2013


  • Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making -- I pulled this down to read a while ago but somehow it slipped through the cracks. Then I recently met one of the authors by blind chance, and yeah, I wish I had read this the minute it came out.

  • "We call the chance variability of judgments noise. It is an invisible tax on the bottom line of many companies."

  • "Where there is judgment there is noise -- and usually more of it than you think."

  • I would bet that the "noise index" for individual company valuations would be in this same 50-60% range even for insiders (execs, board members, etc.) and probably higher than that for outsiders.

  • Be worried about the quake -- and the flood -- This article is a synopsis of a new book, which I haven't read but just ordered. "In 1861, it started raining [in California] and didn't stop for 45 days, inundating much of the state. 'In LA, they said there was water from "mountain to mountain." All of Orange County was underwater. And the Central Valley was underwater for six months..." The [book] examines the evolutionary phenomenon that makes humans ignore risk and focus on more short-term, immediate crises. 'Our fear of randomness makes us create patterns to explain why bad things happen. We don't want to think it can happen to us.'"

  • Sticking with the grim natural disaster thread, here is an incredible article from a few years that I've mentioned before and just reread: The Really Big One: An earthquake will destroy a sizable portion of the coastal Northwest. The question is when.

  • Here's another about construction trends and risk: San Francisco's Big Seismic Gamble.

  • The Key to Everything -- This is Freeman Dyson's fascinating essay / book review of Geoffey West's book "Scale." I liked the book but had some issues with it, albeit not exactly these issues... (Thanks to Joe for sending this!)

  • How One Company Scammed Silicon Valley, and How It Got Caught -- Roger Lowenstein reviews John Carreyrou's book about Theranos, which I'm looking forward to reading this summer.

  • 2018 Alexander Hamilton Awards: Langone and Druckenmiller -- You may not agree with every word, but there are plenty of worthwhile thoughts in this short speech.

  • Southwest's Herb Kelleher: Still Crazy After All These Years -- A classic from the archives. It feels like a bygone era, but this interview is only five years old.

  • Joel Peterson on Leadership, Betrayal, and the 10 Laws of Trust -- For anyone who's missed it until now, the EconTalk podcast is a gem that is well into its second decade. I enjoy most of the interviews, but I especially liked this one with Joel Peterson covering a range of topics on business and leadership.

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