Book Recommendations for books that have shaped my life, outlook, thinking, and investment process (though these are not necessarily investment books). I'm going to potentially keep this as a permanently pinned Tweet and add to it over time.

1) Talking to Strangers by @malcomgladwell. He looks at monsters in history (Hitler, Jerry Sandusky, Larry Nassar, Bernie Madoff) and digs into why society failed to see them for what they were until the end. https://www.amazon.com/Talking-Strangers-Should-about-People/dp/0316478520

Biggest takeaway:
Human beings are trusting engines. We are evolved to give people the benefit of the doubt. It’s the right move 99% of the time. If you have as your strategy "I’m going to believe what ppl say", it makes you a fantastic friend, a wonderful person to work with.

If you are a paranoid person, your life is a nightmare.

I tend to be a pessimist (I tell my PM, I'll always be 10% too bearish), and this book has been helpful for me embracing my inherent skepticism, but also to remind me that most of the time, the world doesn't work this way.

2) Everybody Lies Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are by Seth Stephens-Davidowitz.

This book is about how even in anonymous surveys, people lie about what they really think. A better proxy is Google search data. https://www.amazon.com/Everybody-Lies-Internet-About-Really/dp/0062390864/

The book looks at how Google search data combined with precinct voting data indicated racism played a role in the Trump and Obama elections. How Google search is predictive of flu season severity, and a bunch of other topics from pornography to predicting the stock market.

My big takeaway: "Do Not Trust Surveys." I used surveys in my previous job and have seen how bad the data can be. For example, any survey with "Amazon" in it. On a Restaurant survey one time, many people indicated they used Amazon Restaurants in cities it wasn't even available in

We live in an age now where Survey data just isn't good enough. Just look at the Opentable data provided during COVID-19 pandemic. The data provided by Opentable was not only MORE accurate, but was more timely and granular.

3) Homo Sapiens by Yuval Noah Harari. The book looks at the history of humans. The importance/invention of language, story telling, agriculture, social hierarchy, reading/writing, money, religions, scientific method. https://www.amazon.com/Sapiens-Humankind-Yuval-Noah-Harari/dp/0062316095

Biggest Takeaway: I like this book for many reasons. It looks at our history through many different lenses and I think one thing most humans lack is perspective, even from how we lived not too long ago even though many things we do today are rooted in practices from long ago.

For example, while losing a child today in the developed world is rare, King Edward II ascended the throne in 1307, and was the 16th child of his parents (and 5th son) as most of his siblings had died! This would be an unimaginable loss today.

Or in 1780, different towns had their own time zones. It didn't make sense to standardize. This wasn’t an issue until travel became much faster and trains could travel far enough to where a uniform time schedule was needed.

Humans have been around for a long time and what makes us different from animals is not only the size of our brains but what we have created along the way: language and stories/myths has allowed us to exist in groups of over 150 ppl to trust each other.

Religion/nations similarly allows millions of strangers to cooperate on a daily basis. Agriculture: Cultivating wheat allowed us to multiply exponentially, but did not make us richer (we multiplied to the extent the food source did).

Humans are ecological serial killers. Everywhere we go, we wipe out the existing megafauna (Australia, Americas, Eurasia). Monotheism > polytheism. Only inevitable that religions that saw their way as the only right way would win in the long run vs. more tolerant religions.

Scientific Revolution and the discovery of ignorance. As Science began to solve one unsolvable problem after another… many became convinced that humankind could overcome any and every problem by acquiring and applying new knowledge.

Poverty, sickness, wars, famines, old age, and death itself were not the inevitable fate of humankind. They were simply the fruits of our ignorance.

Why did Europe started winning? Capitalism + scientific method.

Most people throughout history lived under condition of scarcity. Frugality was their watchword. Consumerism has worked very hard to convinced people that indulgence is good for you, whereas frugality is self-oppression.

Memorable quotes: 1) We did not domesticate wheat, it domesticated us. 2) One of history’s few iron laws is that luxuries tend to become necessities and to spawn new obligations. 3) Good rule of thumb ‘Biology enables, Culture forbids.’

4) Money is the most universal and most efficient system of mutual trust ever devised. 5) Religion can be defined as a system of human norms and values that is founded on the belief in a superhuman order.

6) If religion is a system of human norms and values that is founded on belief in a superhuman order, then Soviet Communism was no less a religion than Islam. 7) to understand modern economic history, you really need to understand just a single word: growth.

8) Clearly the world does not lack energy. All we lack is the knowledge necessary to harness and convert it to our needs. 9) Never before has peace been so prevalent that people could not even imagine war.

4) Range: Why Generalists Triumph in a Specialized World by David Epstein. https://www.amazon.com/Range-Generalists-Triumph-Specialized-World/dp/0735214484

My Big takeaway is people are very specialized in a subject are often terrible at predicting how things will play out. They are too close to the subject, have entrenched opinions/mindset, and often don’t see the big picture. Key learnings:

1) Attributes that helped increase accuracy of forecasts: Active Open-mindedness.
“The best forecasters view their ideas as hypothesis in need of testing. Their aim is not to convince teammates of their own expertise, but to encourage them to help them falsify their own notions.”

2) Researchers found the more time someone spends researching a topic, the more “hedgehog”-like they become. Entrenched in their position, searching for confirming facts.

“Beneath complexity, hedgehogs tend to see simple, deterministic rules of cause and effect

framed by their area of expertise, like repeating patterns on a chessboard. Foxes see complexity in what others mistake for simple cause and effect. They understand that most cause-and-effect relationships are probabilities, not deterministic.

There are unknowns, and luck, and even when history apparently repeats, it does not do so precisely. They recognize they are operating in the very definition of a wicked learning environment, where it can be very hard to learn, from either wins or losses.”

3) People are especially bad at forecasting and even interpreting data when it conflicts with their political beliefs.
“In a study during the run-up to the Brexit vote, a small majority of both Remainers and Brexiters were able to correctly interpret made-up statistics about the

efficacy of a rash-curing skin cream, but when voters were given the same exact data presented as if it indicated immigration either increased or decreased crime, hordes of Brits suddenly became innumerate and misinterpreted statistics that disagreed with their political beliefs.

… [Researchers] found the same to be true in the United States with gun control.”

5) Thinking, Fast and Slow by D Kahneman.

This book recaps the author's life's work on why people do what they do. Basic premise: We have 2 systems. System 1 operates automatically/quickly; System 2 allocates attention to effortful mental activities. https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555

Biggest Takeaway. Sometimes System 1 is the appropriate one to use and sometimes System 2 is. BUT your mind can play tricks on you and lead you to make the wrong decision if you don't know which system is most appropriate to use.

Highly recommend. Esp for public equity investors

Favorite examples/quotes:
Intensely focusing on a task can make people effectively blind, even to stimuli that normally attract attention. The Invisible Gorilla example.

What do you think of Alan and Ben?
Alan: intelligent - industrious - impulsive - critical - stubborn - envious
Ben: envious - stubborn - critical - impulsive - industrious - intelligent
These 6 words are the same but people viewed Alan much more favorably. Sequence matters.

WYSIATI - What You See Is What You Get. Jumping to conclusions on the basis of limited evidence is important to understanding intuitive thinking.

We often fail to allow for the possblty that evidence that should be critical to our judgment is missing-what we see is all there is.

Awareness of your own biases can contribute to peace in marriages, and probably in other joint projects.

When asked "how large was your personal contribution to keeping the place tidy, in %s?" spouses answers often add up to >100%. It is useful for both parties to hear this.

There is a basic limitation in the ability of our mind to deal with small risks: we either ignore them altogether or give them far too much weight-nothing in between.

Because of the possibility effect, we tend to OW small risks which incrs the attractiveness of gambling/insrnce

Overweighting of unlikely outcomes is rooted in System 1 features. Emotion and vividness influence fluency, availability, and judgments of probability-and thus account for our excess response to the few rare events that we do not ignore.

- People overESTIMATE the probabilities of unlikely events.
- People overWEIGHT unlikely events in their decisions.

Hindsight bias has pernicious effects on the evaluation of decision makers. It leads observers to assess the quality of a decision not by whether the process was sound but by whether its outcome was good or bad.

We are risk averse when it comes to Winning (people often choose a sure $90 over 95% chance of winning $100) but are risk averse when it comes to losing (people chose 75% chance to lose $100 vs. losing $60).

The brains of humans and other animals contain a mechanism that is designed to give priority to bad news. By shaving a few hundredths of a second from the time needed to detect a predator, this circuit improves the animal's odds of living long enough to reproduce.

Negotiations over a shrinking pie are especially difficult because they require allocation of losses. People tend to be much more easygoing when they bargain over expanding pies.

Lesson? Growth > Value

Fluency, vividness, and the ease of imagining contributes to decision weights.

In one study, people who saw info about a disease that kills 1,286 people out of ever 10,000 judged it as more dangerous than people who were told about a disease that kills 24.14% of the population.

Negative framing vs. positive framing matters.

People view "a one-month survival rate of 90%" much more positively than a "10% mortality rate in the first month."

Defaults matter.

The rate of organ donation was ~100% in Austria but only 12% in Germany, 86% in Sweden, but only 4% in Denmark. The best single predictor of whether or not ppl will donate is the default option (Austria/Sweden are opt out).