Books from 2014

Books from 2014

Last year I wrote an update on the books I had read. At first I wrote a paragraph review of all of them, but due to criticisms that were entirely correct, I’ve cut it down to my top books.  (My goal for next year is to read more literature and less non-fiction and economics.)

Some of them are great books, the rest are interesting but not essential reading.

  1. The Master Switch My friend Roy Bahat recommended I read this book. It is one of the best books I’ve read in a while. The book covers the history of revolutionary information/communication technologies: telegram, telephone, radio and AM/FM, television, movies and the internet. The main thesis of the book is that each revolutionary industry starts out as a cottage industry run by amateurs and hobbyists. The reach is generally local, and hundreds and many small companies are involved. Eventually, one or a few companies consolidate the industry and co-opt the government to protect monopolies or oligopolies. This not only stifles innovation but allows for unofficial censorship. I did not realize how complicit the government was in stifling innovation until I read this book and saw how the FCC repeatedly throughout the 20th century did its best to kill FM radio as well as any innovation in television and the cable industry.  Every single chapter in the book is full of amazing historical details. I strongly recommend this book.
  2. The Curse of the Mogul — This is another great recommendation from Roy. The book’s main thesis is that media companies are often treated as different beasts than regular companies. While a consumer goods company might concern itself with return on equity and operational efficiency, media and entertainment companies are obsessed with misguided ideas such as “content is king” or “globalization”. In many other industries, companies stick to their core markets and competitive advantages, but in media the CEOs are always trying to build empires outside of their field of competence. The book argues that the reason for all of this is that CEOs in media companies are moguls who are intent on expanding their territory. The internet has done a lot to reduce the returns of media companies, but the book is a damning indictment of how most media companies have been run for the past thirty years.
  3. A Short Book and A Long Memory by Crispin OdeyI read this book in 2005, but after almost a decade, I thought it was worth re-reading. Reading about macroeconomic events in the 1990s almost seems like another era. It is hard to believe that people once traded based on what happened in the economy and in stock markets rather than on rumors of what the Fed may or may not do with its balance sheet. Odey is a genius, and it is beautiful to behold the gears of his mind in motion.
  4. Hedgehogging by Barton Biggs This book is a highly entertaining read for anyone who is thinking of starting a hedge fund or investing in a hedge fund. It is also a highly depressing book. The entire hedge fund industry is dysfunctional and focused on short term returns. No one can change it, yet many smart investors continue to play by the rules because they know fund of funds will not invest in them unless the participate in the dog and pony show. I was reminded of Hunter Thomson’s, “The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There’s also a negative side.”
  5. Store Wars – This is an excellent book on retail strategy. Interestingly, while the book does discuss the competition between retailers, it addresses the broader strategic choices of cooperation and competition between stores and consumer goods companies. Anyone who works in retail or who invests in retailers should read this book. I highly recommend it.
  6. The Secret Lives of Marc Rich – I read this book in a day. I can’t recommend this book highly enough if you care about the development of the commodities trade. This book tells the story of Marc Rich, but it is also the story of the international oil trade and how modern commodities trading firms developed. He was a towering figure and was far more complex than the press made him out to be. After reading this book, it became clear that Giuliani could have settled his case with Rich but decided to score political points.
  7. Confidence Game— This book is an absolute must read for anyone interested in the Great Financial Crisis. The book looks at the bond insurer MBIA and its downfall. It also happens to be a book about Bill Ackman, who shorted MBIA in the face of public opposition from the company, the press, fellow investors as well as regulators such as the SEC and the NY State Attorney General. The ignorance and indifference on the part of regulators is sad, and only confirmed how screwed up our financial system really is. Ackman comes across as a genius. Unfortunately, he is aware of his own brilliance and also comes across as a know it all. He cannot lose and has to be seen to win and be the smartest person around. He is monomaniacal in his pursuit of MBIA. Anyone following the saga of Herbalife today should read this book.
  8. Billion Dollar Lessons— This is one of the best business books I’ve read. The beauty of reading is that you can live vicariously. You can read a novel and see the stupid things a hero does. You can learn from his mistakes without making them yourself. This business book analyzes the key mistakes CEOs make and how to avoid them. The price of the book will more than pay for itself if you can spot companies that engage in these mistakes.
  9. Cable Cowboy — The book is a story of John Malone’s career at TCI, building up a small western cable company into a huge beast that he sold to AT&T in the late 1990s. If you want to know the history of cable and the man who shaped it, then this is the book. The writer clearly admires Malone. It was a fascinating read on the US cable industry.
  10. Souls are Flying: A Collection of Yiddish Stories – This is a wonderful collection of short stories by Sholem Aleichem, I.L. Peretz, and Jacob Denizon. Most people only know Yiddish short stories through A Fiddler on the Roof by Aleichem, but this book provides dozens of funny and moving stories. It captures a lost time and place.
  11. Creativity Inc by Ed Catmull — This book is not so much a book on creativity as it is the story of Pixar and Ed Catmull. Some insights into the creative process are applicable elsewhere for writers, but other insights are highly specific to the field of animation. Most films can’t be written and re-written, shot and reshot over years until you reach perfection. Animated films allow this iterative process, but live action films don’t. Also, many creative activities are by their very nature solitary. Committees cannot help. However, the book was a pleasure to read. The book is probably more useful to CEOs and managers in seeing how Pixar runs itself well than it is to creative people. I’d recommend the book to anyone who manages employees.
  12. The Everything Store — I’m one of Amazon’s biggest customers. After my rent, books, movies and CDs are probably my biggest expense. Also, one of my bad habits is sending books and gifts to friends. However, after reading this book, I won’t be buying any more books from Amazon. Amazon’s goal is world domination, and it uses its clout to bludgeon publishers and writers. It is a big, nasty vindictive company that has bullied MacMillan and Hachette. Bezos is a genius and a tyrant. He comes across very much like Steve Jobs in Walter Isaacson’s
  13. Who Says Elephants Can’t Dance? – IBM is a giant that dominated its industry. Generally large companies cannot turn around quickly and successfully. Almost all big companies eventually succumb to nimbler, faster rivals. In this book Lou Gerstner gives an extremely clear account of how he helped turn IBM around. Anyone turning a company around should read this book and learn lessons from it.   
  14. Life by Keith Richards — I’ve never been a fan of the Rolling Stones. This doesn’t mean I don’t like their music. I simply didn’t grow up listening to them. However, this is one of the best books I’ve read on blues, rock and roll and pop music. Richards is a very colorful character, but the book has great sections on songwriting, the evolution of blues and rock and roll and what it is like to be a musician. Whatever you think of Keith Richards based on what you see of him in the press, it is impossible to read this book and not come away being a huge fan of Richards and the Rolling Stones.
  15. Rock Breaks Scissors by William Poundstone — Poundstone is one of my favorite writers, even if he is tilling the same soil over and over again. This book is about how difficult it is for humans to choose randomly. Computers and even guessing systems that are aware of our lack of random choices can outguess humans much of the time. If you want to learn how to improve your odds at multiple choice tests, cracking passwords, returning tennis serves, etc this book is for you.
  16. Faraday, Maxwell and the Electromagnetic Field by Nancy Forbes and Basil Mahon — In science classes as a kid I learned about Faraday and Maxwell, but I had never read the story of either man. This is beautiful book that makes the quest to understand electromagnetism come alive.
  17. Einstein by Walter Isaacson — This was one of my favorite books of the year. I only knew about Einstein superficially before reading this book. Isaacson makes the great man come to life, places in him a historical context and makes something as complicated as general relativity interesting. I could identify with Einstein’s international outlook amid nationalism in Germany and the US. One of the great insights of the book was that Einstein came to all his great discoveries through thinking, or his Gedankenexperiment, as he called it. He once said, “Reading, after a certain age, diverts the mind too much from its creative pursuits. Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.” I find myself too often distracted by news, constant reading of Twitter, economic blogs, etc and find too little time to think.
  18. Insanely Simple: The Obsession that Drives Apple’s Success by Ken Segall — This is a very quick read, but it is a great reminder that less is more. Clarity of thinking leads to simplicity.

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