Category Archives: What we read

Some links (06/2017)

Charlie Munger speaks at the AGM of the Daily Journal

The “Becoming Warren Buffett” documentary (h/t Monevator)

Current trends in China (h/t marketfolly)

Great annual letter from Longcast Advisors

A great collection of spin-off reading material (Greenblatt, Munger, Klarman)

Google’s self driving car team already cashed out and left. Still no self driving cars on the road but fatal accidents are rising. I guess car insurance will stay for some time. (h/t Abnormal Returns)

Book review: “The Art of the Deal” – Donald J. Trump (with Tony Schwartz)

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´So far, my blog has been 99,9% “Trump Free”. As a German, I haven’t really followed what Trump did and said over the last decades so I think I am not able to form a qualified opinion about him or what he will do as POTUS.

I think it is also waste time to watch TV shows where German politicians debate what Trump will do or not because most of them don’t have a lot of background knowledge either. As with stock analysis, I am a big fan of “Primary resources” and so I decided that I should at least read one book co-authored by “his Trumpness” himself. There are many Donald Trump books out there but the first one from 1987 is “the Art of the deal”. I thought that maybe the first one is also the most authentic one.

The book starts with the description of a typical week of Donald Trump in early 1987. Clearly this is meant as a name dropping exercise to impress the readers about the then not so famous Mr. Trump. Indeed the list is quite long and interesting.

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Book review: “The Undoing Project” – Michael Lewis

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Michael Lewis is clearly “THE” author for financial books at the moment. His books are usually great to read, very well researched and a few of them have already turned into movies like “The Big Short”.

“The Undoing Project” is the story of Amos Tversky and Daniel Kahneman, two Israeli professors who developed the so-called “Prospect Theory” which deals with the behavioural “biases” that the human mind shows when deciding under uncertainty. And for which Kahneman got the Nobel Prize in 2002 (Tversky unfortunately died some years before that).

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Up until Prospect Theory, the human mind was assumed to be perfectly rational for most theories dealing with human behaviour and decision-making. As stock investors we all know that human behaviour in the stock market is anything but rational, however only following the groundbreaking work of those two guys, we now have a more structured way to understand how the mind really works.

The book covers the story of this “unlikely” pair of academics who started this revolution plus some side stories about people who were greatly influenced by them, for instance in Basketball and Medicine.

The book describes in very great detail how the relationship between Tversky and Kahneman developed, how it was interrupted by the different Israeli wars, how they moved from Israel to the US and how it ended. To be honest, I found this a little too much detail. It is an interesting story , no doubt, but I guess a few pages less would have made the book better.

Towards the end I really had to force myself to finish the book when Lewis describes in great detail how they tried more or less successfully to counter their critics. I think this was my first Michael Lewis book where I seriously thought about not finishing it.

All in all I would say it is an OK book for people who like those kind of biographic books, however for people interested in the theory and topic itself, Kahneman’s book “Thinking Fast and Slow” in my opinion is the much better choice.

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