Tuesday, January 25, 2011

2010 Book Wrap-Up

In 2010 I read 44 books, a few books shy of what I needed to average a book a week. I try to maintain a 1:1 business to pleasure book ratio. Last year I read 24 business books and 20 fiction/other books, which is pretty close to the target.
In reverse chronology I've presented the date I finished the book and some quick thoughts that I wrote in LinkedIn's Amazon Reading List. I've only provided the Amazon Associates links to books that I really enjoyed and recommend. (Disclosure: if you were to buy these books by clicking through then I earn 15%.)
• December 23, 2010 - The Cluetrain Manifesto: The End of Business as Usual
by Rick Levine, Christopher Locke, Doc Searls, Dick Summer
Comment: "This book, written in 1999, is an extremely dated topical business how-to manual for the Internet age. References fall flat just a decade following its publication, e.g. they reference AltaVista and Lycos as the "big" search engines. All of the main points are regurgetated ad nauseum which is beside the fact that it's message isn't that revolutionary. This book was an interesting case study in how Net thinkers were prognosticating about the future as the commercialization of the web took hold. But to get through that case study is exhausting and I wouldn't recommend it to anyone."
• December 17, 2010 - The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
by Scott Patterson
Comment: "This book is an OK read about the financial crisis. Before I read the book I didn't realize that quantitative models had a very different arc going through the crisis. They felt it more acutely in August and November of 2007 than in September 2008. If you're looking for more than just human interest stories about four of the most famous quants ever then you should look elsewhere."
• December 9 – 2010 - The Great Santini: A Novel
by Pat Conroy
Comment: "A good novel on growing up in a military household and the juxtaposition of a father who is invested in the large institutional mindset while also trying to raise individuals. Some parts were laugh out loud funny and some parts were cringe-inducingly sad. "
• December 3, 2010 – New Ideas from Dead Economists: Introduction to Modern Economic Thought
by Todd G. Buchholz, Martin Feldstein
Comment: "This book is eerily similar to Heilbroner's "The Worldly Philosophers". It is also similar to a readable textbook that mashes together the origins of a considerable amount of economics: public choice, Keynesian macro, and microeconomics. That being said you can imagine how dense the 313 pages is. But I did enjoy parts of it and the prose is at times wonderful with thought-provoking ideas popping off the page. I would give it to any undergraduate because of the exposure to a wide array of economic topics."
• November 26, 2010 - The Kite Runner
by Khaled Hosseini
Comment: "My mom asked me to read this book. I have to admit, it is a great book. A fantastic novel about friendship punctuated by the mistakes and pitfalls of life. I'd recommend this book to anyone."
• November 22, 2010 - Last Night in Twisted River (Hardcover)
by John Irving
Comment: "John Irving is a masterful storyteller, but I didn't connect with this story the way my family has. I found the circular storyline and the implication that the main character was actually John Irving hokey, not thought-provoking.
Also, as it seems to be a running critique across many books, I thought the two year old child character was too well spoken and the eighty-year old characters were too sprite for their age."
• November 18, 2010 - Against the Gods: The Remarkable Story of Risk
by Peter L. Bernstein
Comment: "I've seen so many references to it that I had to read this classic text on risk management. It delivered. I learned an incredible amount, most of which was the progression of mathematics and probability theory throughout history. It was a little light on the more recent developments like VaR. I would liked to have seen more about these issues rather than twenty pages on portfolio insurance, which failed, followed by a wrap-up chapter."
• November 8, 2010 - Sam Walton: Made In America
by Sam Walton, John Huey
Comment: "Sam Walton's memoirs were a fantastic read. His love of Wal-Mart and his passion for retail shine through the pages. His book takes you through his career with lovely business anecdotes revolving around his 'key principles'. Many of the chapters could form the basis of a good cases course. In the last few chapters, which were written in the throes of cancer, he struggles with his legacy. I believe any Wal-Mart-hater will come away with a different impression of the company after reading this book, because Sam is very successful in imprinting the message that his dedication to his customers is the #1 priority and the spoils of business is a distant last. "
• November 2, 2010 - Beach Music: A Novel
by Pat Conroy
Comment: "This book was fantastic! It was four or five stories woven into one cohesive book. The prose was so beautiful and illustrative that I couldn't put the book down. Some of his remarks are so subtle that if you read too fast you will miss them. I remember one passage where he is describing a character's Appalachian parents where he writes "no one ever mentioned my mother's maiden name." I thought that was so well crafted. He didn't simply write that she was in-bred - he took the circuitous route and made you think about what he was saying. I loved this book and I would recommend it to anyone.
My only qualm was that the 8-year old daughter was waaaaay too mature for her age. She said things that girls five or six times her age wouldn't have the wisdom to express and I felt it undermined her character. But it was far from ruining the book for me."
• October 13, 2010 - Winning
by Jack Welch, Suzy Welch
Comment: "This book can best be summarized by the Warren Buffett quote on the cover - "This is the only management book you will ever need." It could be used as an MBA textbook - it's that good. It describes, in detail, the whole gamut of topics that you would want to cover in a management class. Great stuff.
The only thing I didn't like about this book is that Jack Welch comes across very old school in some parts, specifically when he is talking about women and their roles in society and also about work/life balance. Despite some editing gloss, I felt his old boys school perspective shone through."
• October 7, 2010 - I'll Mature When I'm Dead: Dave Barry's Amazing Tales of Adulthood
by Dave Barry
Comment: "A very funny book given to my by my publisher friend, Delia Arevalo. For me, the laughs were front-loaded because he wrote a 30-page "Twilight" spoof towards the end. That stuff doesn't speak to my audience."
• September 29, 2010 - Autobiography of Benjamin Franklin
by Benjamin Franklin
Comment: "I read this book because it was recommended in two consecutive books that I read, but I would not recommend it. If I wanted to know more about Ben Franklin, I would go towards a more modern biography rather than straight from the source. Franklin writes the story to his son and in such a manner that you don't believe he thought through the text nor edited it in any fashion. I completely gave up when I had to flip through pages of description of his effort to perfect his morality and his 13-pronged planned for executing that plan. "
• September 20, 2010 - The Unincorporated Man (Sci Fi Essential Books)
by Dani Kollin, Eytan Kollin
Comment: "This book was on such an interesting topic and widely read by my favorite bloggrs that I had to pick it up. And it did not disappoint. A very polished book for first time authors Dani and Eytan Kollin. For a little bit of perspective, it was a cross between the futuristic sci-fi storytelling of Arthur C. Clarke and the objectivist/rugged individualist philosophy of Ayn Rand." • September 7, 2010 - Confidence Game: How Hedge Fund Manager Bill Ackman Called Wall Street's Bluff
by Christine S. Richard
Comment: "This book is not the best account of the prognosticators of the financial crisis that I have read. If you want that, read "The Big Short". But if you want a 300 page meandering tale of hedge fund manager Bill Ackman's lengthy crusade against bond insurer MBIA, then by all means, read this book.
I would have liked this book much better if the author had spent more time eliciting on the process that led up to Ackman's investment decision rather than skipping over it as an easy, breezy conclusion. "
• August 11, 2010 - The Big Short: Inside the Doomsday Machine
by Michael Lewis
Comment: "Excellent book on the financial crisis. I can definitely see why it has been on the NYT bestseller list for so long. Michael Lewis is a fantastic storyteller; this is now the third book of his I've read. I'm sure I will read more.
I love how the story is told - from the perspective of roughly three groups who debunked the subprime market and ended up going short well before the crisis struck in 2007.
Before I read the book I didn't know that AIG had stopped underwriting credit default swaps on subprime mortgage debt by 2006. I was under the impression they had continued in that market up until it collapsed. "
• August 6, 2010 - Shadow Puppets
by Orson Scott Card
Comment: "I love the Ender series. Book #7 was pretty good but the departure from the Ender storyline in favor of the Bean storyline is only so-so. If you like the series, you should consider reading it. Card is definitely an interesting author and he has some interesting predictions about the future of Middle East politics."
• August 4, 2010 - How To Win Friends and Influence People
by Dale Carnegie
Comment: "This is a terrific text. The title is a little hokey, but this book is the premier text on human relations. If you want to learn human psychology and quickly improve your effectiveness within an organization and in life in general, then you should pick this book up.
One of the greatest suggestions within the book (and if I become a professor I will use in every class) is to get in front of your people and ask for their expectations of you and their expectations of themselves. Making an impromptu contract explicit will cause everyone to strive to live up to it."
• July 22, 2010 - Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger
by Janet Lowe
Comment: "I read a significant amount about Warren Buffett and Berkshire. That fascination has branched over and now includes his second in command, Charlie Munger. After reading Ms. Lowe's book, I feel that I can relate much more with Mr. Munger's life philosophy.
Interesting facts of note about Mr. Munger: he demures from the spotlight, he "splurged" and built a $6 million custom boat that he has pretty much donated to charities for fundraising events, Lowe reports that he feels some form of guilt about accumulating such vast wealth while producing relatively little in societal value, he has a large family and is considered a good father (in contrast to Buffett who was given a "Dummies Guide to Parenting" from one of his kids - I thought that was a horrible sign). I can really relate to those characteristics.
All in all an OK read - there were certain details that don't mesh with my preexisting knowledge of the events. For instance, she says that some of the Long Term Capital Management investors were never returned their principal which conflicts with Roger Lowenstein's book "When Genius Failed" who wrote that LTCM had returned most of their outside investors' money in 1997 - one year before their implosion. I understand its ticky-tacky.
If you want to read it, just ask me and I'll give/lend it to you."
• July 15, 2010 - Wooden: A Lifetime of Observations and Reflections on and Off the Court
Comment: "I know I recommend a lot of the books I read, mostly because they have been referenced by authors that I like or have been personally recommended to me and I'm just passing that on, but if you were to choose any of the books from my list that I've recommended then it should be this one.
This book can change your life. It is the most inspirational and motivating book I have ever read. It is the best how-to book on how to be a coach. It is also probably the best parenting book I could ever imagine.
I've already started to institute some of his logic and thinking into my everyday life. For instance, Jenny was complaining about an interaction with a patient yesterday and I told her, and it sounded like it came straight out of Wooden's mouth, "you should only concern yourself with the things you can control."
I could see how someone would say that the liberal use of basketball references would be distracting if you didn't like that. But that is John Wooden's lens. That is how he sees the world. And it's also the source of his influence which may account for why he references the ten championships. Or he may just be proud of that accomplishment - and rightfully so.
This book was so good that I am planning on purchasing one for everyone in my family for Christmas. That may not be exciting when everyone gets the same gift, but that is how strongly I believe everyone should read this book. It was that powerful."

Updated 1/24/2011 - I did give six copies of this book away as Christmas presents.
• July 13, 2010 - Irrational Exuberance
by Robert J. Shiller
Comment: "I read this book because I had heard what an excellent forecast of the financial crisis and the deflated stock market and housing price bubbles. Now that I have read it I have no doubt about that. An excellent read, Dr. Shiller changed my opinion on a lot of financial ideas. One example is the conventional wisdom that equity prices "always" outperforms bonds. It is so ingrained in the investing culture that I had never questioned it. Until now. While he didn't change my mind about it, Dr. Shiller also solidified a number of the key arguments against the efficient markets hypothesis. His writing is extremely cogent and a variety of extremely well written sentences pepper the chapters.
I would recommend this book to anyone. While quite dense to finish, it is well worth your time."
• June 25, 2010 - The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good
by William Easterly
Comment: "This book is an excellently informative journey through development economics and the bureaucracy of foreign aid. I believe that it is more balanced than the "planners" who tend to dominate the literature, e.g. Jeffrey Sachs. If you want to read about many different countries economic histories and also theories on how aid organizations could operate then I wholeheartedly recommend this book."
• June 15, 2010 - Every Last One: A Novel
by Anna Quindlen
Comment: "Anna Quindlen is a fantastic author. Her writing presents a new and interesting idea on each page. While she remains a "popular" author today, with all the negative connotations that pejorative comes with, I believe time will be more kind to her. Quindlen may well write the Next Great American Novel.
In all good consciousness I can't recommend such a "heavy" book to my friends and family, unless I'm Oprah or a sadist. But it is an excellent read and you may really enjoy it as much as I did."
• June 9, 2010 - Capital Ideas and Market Realities: Option Replication, Investor Behavior, and Stock Market Crashes
by Bruce I. Jacobs, Harry M. Markowitz
Comment: "This book covered the gamut of portfolio insurance and its role in the October 19, 1987 crash. In light of the May 6th "flash crash" it was an excellent historical perspective of the events surrounding financial market turmoil."
• May 24, 2010 - The Count of Monte Cristo (Penguin Classics)
by Alexandre Dumas
Comment: "GREAT BOOK. I never thought I would enjoy a classic book as much as I enjoyed this book. The length was no problem, because it really added weight to the torture that Dantes went through in executing his revenge. If you haven't read it, do it; It is free on the Kindle."
• May 11, 2010 - Ignore Everybody: and 39 Other Keys to Creativity
by Hugh MacLeod
Comment: "Great book. If you are looking for some motivation to reach for your dreams, especially if it involves anything creative, then pick up this book. It is funny, full of great anecdotes, and really good life advice. I would recommend it to any and all of my friends."
• May 10, 2010 - How to Tell a Story and Other Essays
by Mark Twain
Comment: "Humorous and short is about all I can say about this."
• May 9, 2010 - Lords of Finance: The Bankers Who Broke the World
by Liaquat Ahamed
Comment: "This is a hefty economic history of international finance from the beginning of the twentieth century through the Great Depression. While it is very informative and eye-opening, the weight of the details can be cumbersome at times. In the end I am glad that I read it because I gained a really solid foundation in the economics goings-on and players of all the largest economies (US, UK, France, and Germany) for a good portion of three of the most turbulent decades in recent history."
• April 29, 2010 - Treasure Island
by Robert Louis Stevenson
Comment: "I've always felt that I skipped over a lot of great classics, so I'm now making up for lost time. It was a great read: excitement throughout. If you haven't you should definitely think about reading it."
• April 27, 2010 - This Time Is Different: Eight Centuries of Financial Folly
by Carmen M. Reinhart, Kenneth Rogoff
Comment: "Great book on financial crises. The authors put together the largest data set on financial history I have ever seen, adding to the richness of their findings. This will be a classic economic history book one day."
• April 19, 2010 - Trade Like Warren Buffett
by James Altucher
Comment: "I would not recommend this to anyone. Altucher inserts Q&A sessions with "Warren Buffett-like" fund managers, plugs his other book for five pages in the middle of the book, and then there is the fact that he starts out very slow explaining everything in great detail and then around p. 190 he starts rushing through topics very quickly. Take it from Altucher himself - there are better Buffett books worth reading, e.g. Hagstrom or Lowenstein.
I did enjoy the section on risk arbitrage though."
• April 13, 2010 - Zen and the Art of Motorcycle Maintenance: An Inquiry into Values (P.S.)
by Robert M. Pirsig
Comment: "The best book that I have ever read. It's the perfect book. While I try to wade through some of the more esoteric philosophical discussions, some of it ended up going over my head. But the overall message of the book didn't.
I would recommend to (almost) anyone."
• April 2, 2010 - The Crash of 2008 and What it Means: The New Paradigm for Financial Markets
by George Soros
Comment: "I liked this book, but I wouldn't recommend it. Soros changed my paradigm away from a market fundamentalist to a centrist. There is a time and a place for markets, but leaving them unregulated may not be the best thing for our country. Soros tends to ramble a bit and you are forced to overlook his rants on the Republicans especially Bush if you want to finish his texts. I enjoyed his analysis immensely."
• March 26, 2010 - The PayPal Wars: Battles With Ebay, the Media, the Mafia, And the Rest of Planet Earth
by Eric M. Jackson
Comment: "This is the second book in a row on a start-up for me. It was very educational, because Jackson was at the company from late 1999 through June 2003 so he was on-hand for most of the major developments and gives a good insiders-account of the plot developments as they (likely) unfolded.
I would not recommend this book for just anyone. First, there were major questions that were left unanswered or incomplete, for instance the section detailing the selling of Paypal to eBay felt rushed/not well thought out. Also, Jackson places himself closest to the center of action at all times, so it feels more like an autobiography of his time at PYPL rather than a history of the company (which is what I was expecting). As a result of this, I felt the book was more than a little self-serving which left a bad taste in my mouth when I finally put the book down."
• March 22, 2010 - My Start-up Life
by Ben Casnocha
Comment: "This is an excellent book on entrepreneurship based on Ben Casnocha's eGov startup and takes you from start to finish with excellent advice and essays interspersed. Ben's energy and passion for entrepreneurship really shine through the pages. I found the advice on business plans and networking profound and useful."
• March 16, 2010 - Pilgrimage to Warren Buffett's Omaha: A Hedge Fund Manager's Dispatches from Inside the Berkshire Hathaway Annual Meeting
by Jeff Matthews
Comment: "I loved this book which provides a great look into the 2007 and 2008 shareholder meetings. Jeff Matthews' prose is simple and engaging, his thoughts flow clearly and draw you through the page. His tone is respectful even amidst his critiques, of which they are few but very valid (e.g. the issue of Buffett restricting his business's growth by not reinvesting directly into them). This book might even prompt me to make my own trek to Omaha..."
• March 15, 2010 - One Up On Wall Street : How To Use What You Already Know To Make Money In The Market
by Peter Lynch, John Rothchild
Comment: "This is a great book on picking stocks by a five-star veteran of the mutual fund business. Lynch teaches the majority of his methods in evaluating companies and the differences in classifications.
The only drawback is that some of the stock names are quite outdated, because the first edition was written in 1990."
• March 5, 2010 - How I Became a Quant: Insights from 25 of Wall Street's Elite
by Richard R. Lindsey, Barry Schachter
Comment: "This is a great insight into an array of people in the quantitative side of the financial services industry. It explains how they got there, what they do, and, with great self-adulation, what they've accomplished. I liked this book. Cliff Asness and the Jacob/Levy duo really motivated me to become a financial professional and also to pursue and enjoy a practicioner's insight into academia."
• February 25, 2010 - Boomsday
by Christopher Buckley
Comment: "This book was the best satirical novel I have ever read. Hilarious stuff. Buckley really drives through the meta-issue (from the book) of fixing Social Security."
• February 22, 2010 - Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System---and Themselves
by Andrew Ross Sorkin
Comment: "This book is so interesting that it has prompted me to read it at a clip of 100 pages a day. The most difficult part of the text is keeping the cast of characters straight, but as a daily WSJ reader it is managable. It is a fantastic read. Early on I felt that gives the reader the sense that Dick Fuld is definitely the bad guy in this story, a man obsessed with maintaining his power and not aligned with the shareholders' interests at all, but towards the end he gives the impression it may have been ignorance, naivete, or simply too much love for a company he helped build that his decisions were clouded. I would recommend this book for anyone looking to discover the inside-events of September 2008.

The only thing that vexes me about this book is that I don't think Sorkin understands the difference between monetary and fiscal policy. He repeatedly states that the Fed is in charge of fiscal policy --> it's not."
• February 12, 2010 - From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity
by Arnold Kling, Nick Schulz
Comment: "My favorite economist's new book on his economic ideas. It outlays his construction of economics 2.0 relative to the classic teachings of economics 1.0. It is filled with interviews of big-name stars in the academic world. The best part, by far, is chapter 2 which does the best job of explaining why rich countries are so much better off than poor countries and why than any other reading I have ever experienced."
• January 29, 2010 - The Glass Room
by Simon Mawer
Comment: "This book is beautiful. It shadows a group of people, namely a couple, and their house from the mid-1920s through World War 2 and on, revolving around them and showing that each has a life to itself. This book mixes the organic with the inorganic, juxtaposing the straight lines of a modern house with the long curves of pregnant bellies. I really enjoyed this book."
• January 21, 2010 - To America: Personal Reflections of an Historian
by Stephen E. Ambrose
Comment: "My uncle Spike gave this book to me for Christmas. It was a great general history book on America - well, the first 200 pages were. Then Dr. Ambrose had to make a last lap for the last 50 pages to get in all of the historical events that passed him by, e.g. the women's lib movement. I would recommend this book, namely because it inspired me to read more on President Eisenhower."
• January 19, 2010 - And Then the Roof Caved In: How Wall Street's Greed and Stupidity Brought Capitalism to Its Knees
by David Faber
Comment: "An interesting journalistic look at the financial crisis. This is one of the first books that I've picked up on the events of 08-09, certainly not the last, but an important one. David Faber is a good story teller and he throws in vignettes to spur the reader on about the human impact of the runup and subsequent crash. A good, quick read."
• January 13, 2010 - Reminiscences of a Stock Operator Annotated Edition
by Edwin Lefèvre, Jon D. Markman, Paul Tudor Jones
Comment: "Good, classic book on trading with timeless lessons like not listening to anonymous yet credible-sounding "tips" from news sources and knowing where your broker's real income comes from. It was a long slog for me, because I didn't think Lefevre was the best author in the world even though his messages were great."

Monday, January 24, 2011

Haiku - Society's Impetus

Today's 5 books with Robert Shiller inspired me to write this haiku:

Society's Impetus
All selfish actors
satisfying only themselves
pushes us forward.

Friday, January 21, 2011

Metro takes my advice

As an update to my December post on how to fix Washington DC transit system, the Metro's, budgetary issues they announced they will consider selling naming rights to their stations. Well, well, well.
Bosses at Washington's cash-strapped public transportation service
are mulling selling "naming rights" for Metro stations as a way of filling a
budget gap, a spokesman said Friday.
"We're looking at a possible $72
million dollar shortfall in our budget for the upcoming year, and so we're
looking for creative ways to try to close that deficit," Metro spokesman Steven
Taubenkibel told AFP.
"One idea would be station naming rights," where
corporate entities buy the right to have their brand associated with one of
Metro's 86 stations.

Source: Yahoo!News.

Gov't Employee Accountability - Is there an app for that?

There should be. I was thinking the other day, after another dreadful encounter with a federal coworker, that there should be a mechanism that people who work with someone have to provide their supervisor with feedback. A comment card for each civil servant if you will.
First, I should tell you about the encounter. I was trying to excess a Blackberry for an employee who retired in December.Dorothy Madison (that is her name) is the lady who you turn this type of equipment in to. So I tried emailing her. No answer. Then I called and left a voicemail. No return. Called again and this time she was in so I told her I would be right down. When I get there she is nowhere to be found. So I wait for fifteen minutes. Get bored and frustrated. Called again to set up a drop-off (you can't leave these things because you have to sign off on it). Not returned. I walk down to her office again and the gentleman who sits across from her recognizes me and helps me immediately.
The worst part about it is that her horrible, atrocious customer service is allowed to continue and never addressed because, most likely, her supervisor is unaware of this behavior. As long as a federal employee does exactly what their boss wants them to do within a reasonable amount of time then they will at least get a fully satisfactory performance rating which will make them eligible for bonuses which are calculated as a small percentage of basic pay. In response to this and as a thought exercise in how to improve government customer relations, I imagined there should be an application that employees can use to document their interactions with employees. The feedback could then be used to provide better annual performance evaluations - "so a few people have reported that you repeatedly blow their emails off..."
Going a step further, I thought the app could integrate social networking features with an office leaderboard of best customer service appraisals so that competition could be introduced which could initiate a positive feedback loop of improvement. As far as I'm concerned, and maybe I have a skewed perspective, competition is always a good thing. People would become more consistently helpful in an effort to earn one more five- or ten-star rating to push themselves up. From a Jack Welch-type management style it could help to identify the bottom 20%, those that you would want to get rid of, and because firing in the government is so notoriously hard it could form evidence for going down that road.
When I started to think along an implementation line, I quickly ran into the problem that groups of employees would collude to artificially raise their scores.
But it was a fun thought exercise that I think could improve the severely-underserved customer relationships in the federal government.