It’s time once more to look back on CapitalSpectator.com’s weekly Book Bits column and pluck a few of the more memorable titles from the archives. Per the usual routine, as each year draws to a close, we revisit ten books from 2023’s travels — titles that, for one reason or another, caught your editor’s eye and deserve another look before New Year’s celebrations commence. We’ll start with five today, followed by the balance in a week. Happy reading!
● The Missing Billionaires: A Guide to Better Financial Decisions
Victor Haghani and James White
Summary via publisher (Wiley)
Over the past century, if the wealthiest families had spent a reasonable fraction of their wealth, paid taxes, invested in the stock market, and passed their wealth down to the next generation, there would be tens of thousands of billionaire heirs to generations-old fortunes today. The puzzle of The Missing Billionaires is why you cannot find one such billionaire on any current rich list. There are a number of explanations, but this book is focused on one mistake which is of profound importance to all investors: poor risk decisions, both in investing and spending. Many of these families didn’t choose bad investments– they sized them incorrectly– and allowed their spending decisions to amplify this mistake.
● Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis
Review via The New York Times
The world Patterson portrays is largely divided among two camps: investors who subscribe to Taleb’s “Black Swan” philosophy of financial markets as vulnerable to unforeseeable shocks and those more convinced by the French researcher Didier Sornette’s “Dragon Kings,” anomalous but somewhat foreseeable events. Sornette, who steadfastly believes in “pockets of predictability,” finds Taleb and his partner Mark Spitznagel’s credo a touch too woo-woo. “Quants,” the financial engineers who trust complex formulas to tell them what the future holds — and who are the focus of another book by Patterson — are the extreme foil to both groups.
“The Black Swan concept is dangerous,” Sornette tells Patterson. “It puts us back at the time of pre-science where the wrath of nature, the lightning, the storms were the expression of the anger of the gods.”
● Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall
Review via Fortune
Books about crypto tend to fall into one of two categories: rah-rah accounts of how blockchain can better humanity or sneering takedowns that pronounce the whole thing a scam. After a recent bubble marked by staggering swindles and the arrest of leading crypto figures, you can guess which genre is hitting the shelves right now.
The newest offering is Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall by Bloomberg journalist Zeke Faux. Released today by Penguin Random House, the book features crypto Ponzi-schemer extraordinaire Sam Bankman-Fried on the cover and takes the reader on a sometimes laugh-out-loud tour of the crypto industry’s most despicable practices and people. And God, there is no shortage of those.
● We Need to Talk About Inflation: 14 Urgent Lessons from the Last 2,000 Years
Stephen D. King
Review via Financial Times
Economic history is rarely taught in universities these days. This is a pity, since it is a better guide to policymaking than Nobel Prize winning theses in economic theory. As a result, every two generations or so we are destined to repeat serious policy mistakes. In Britain the Truss government failed to study the Barber Boom of 1972-73 and arguably the world’s central banks too have failed to learn from the oil price shocks of 1973 and 1980.
Stephen D King’s highly readable and informative book provides a welcome antidote… King’s canter through 2,000 years of inflationary history — from Emperor Diocletian’s debasement of the coinage through to the Federal Reserve’s decision in 2021 to allow inflation to run at above the 2 per cent “central target” — is instructive. Money matters.
● What I Learned About Investing from Darwin
Summary via publisher (Columbia U. Press)
The investment profession is in a state of crisis. The vast majority of equity fund managers are unable to beat the market over the long term, which has led to massive outflows from active funds to passive funds. Where should investors turn in search of a new approach? Pulak Prasad offers a philosophy of patient long-term investing based on an unexpected source: evolutionary biology. He draws key lessons from core Darwinian concepts, mixing vivid examples from the natural world with compelling stories of good and bad investing decisions—including his own.
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