My FavoUrite BOOKS
Kahneman is a Nobel laureate and recognised as the father of behavioural finance. The brilliance of his work lies in his two-systems-framework to decode our thinking machinery. The reflexive brain (System 1) is the part of our brain which evolved through millions of years of evolution and helped our ancestors survive in the hostile African savannah. The other part is the reflective brain (System 2) which is slow, deliberate, logical and came into existence in last few hundred thousand years of human evolution. All errors in judgement, Kahneman explains, happen when System 1 starts interfering with System 2. An encyclopedic compilation of practical ideas on psychology which will improve your decision-making by 10x.
Don’t let the slipshod title fool you. For the uninitiated, Scott Adams is the creator of Dilbert, one of the most popular and widely distributed comic strips of the past century. I can vouch for the tremendous utility of Scott’s methods. Goals are for losers. Passion is overrated. Luck can be manipulated. That’s just a tiny sample of many groundbreaking ideas from Adams’ book which is filled with instantly implementable insights to improve the odds of being successful. What happens when a famous cartoonist loses his ability to draw? And then the same cartoonist with a thriving public speaking career, loses his voice. The book is worth a read just for the rib-tickling humour Scott weaves into his own life story.
Charlie Munger, Warren Buffett’s indispensable financial partner, was so impressed with Cialdini’s book that he gifted him a class-A share (worth $100,000 then) of Berkshire Hathaway. Persuasion is the ability to extract yes from others. It’s a science and learning is akin to having a superpower. Cialdini elaborates six psychology principles and he aptly calls them the weapons of persuasion. Once you understand and master these tricks, you become the man who brings a flame thrower to a stick fight. Even if you have no intention of deploying these tricks on others, knowing them will help you see through the invisible manipulation that persuasion experts practice all around us.
Warren Buffett is unarguably the best investor the world has ever seen. Buffett gives the credit for a huge part of his success to his longtime partner and best buddy Charlie Munger. At 95 years of age, Charlie is the oldest billionaire alive today. Poor Charlie’s Almanack is a compendium of ideas and philosophies that Munger has preached and practiced. It’s an illustrated handbook on living a happy, satisfying, and abundant life. Munger’s insights span across dozens of disciplines including business, investing, accounting, philosophy, engineering, physics, mathematics, and psychology. Those who haven’t read this book, all I can say (giving a spin to Munger’s famous quote) is that they’re “living like a one-legged man in an ass-kicking contest.”
The author, Paul Graham is a programmer, writer, and a silicon valley venture capitalist. Graham first made his fortune when Yahoo acquired his company in 1998. In 2005 he co-founded Y Combinator, the first of a new type of startup incubator. Since then Y Combinator has funded over 1000 startups, including runaway successes like Dropbox, Airbnb, Stripe, and Reddit. He’s a deep thinker and the essays on his blog have a cult following. The book is a compilation of some of his essays. He continues to write on his blog. Graham is a nerd with a deep aesthetic sense. His essays cover wide range of topics including computers, business, investing, and social science.
We often go through each day without questioning how flawed and limited our perception really is. To learn to see the world as it is, we need ideas from multiple disciplines. And to think in a multidisciplinary way, you have to stop sweating the small ideas in your own discipline and reach out for big ideas in other disciplines. Stepping into different disciplines expands your mind’s ability to experience radically different thoughts, perceptions, and ideas. Peter Bevelin’s book is an eclectic mix of wisdom from a wide spectrum of human knowledge. Physics, Biology, Engineering, Chemistry, Sociology, Psychology, Accounting, Literature, and Philosophy are just a small set of bodies of knowledge that Bevelin cut across.
A deterministic world is where every cause has a predefined and unique effect, where good decisions always precede good outcomes and vice versa. The biggest mistake one can do while making decisions is to assume that we live in a deterministic world. We live in a probabilistic world. Which means, we often incorrectly assume that we can always judge the quality of the decision by its outcome. In her book, Anne Duke untangles this confusion. In her professional career as a poker player, she has won over $4 million in poker tournaments. Poker is a game which closely mirrors how the real world looks – uncertain, unpredictable, and holding incomplete information. Poker teaches us that the best way to think of decisions not as decisions but as bets.
Derek Sivers was a full-time musician in 1998 making a comfortable living. One day he decided to sell his music CDs online and found that there was no way for a small time musician to sell on the internet. So he learned to code and built a website to sell his CDs. Soon his musician friends started requesting him to list their CDs on the site. That’s how CDBaby.com was born. Ten years later it was doing $100 million in sales. In 2008 Sivers sold his company and gave away the proceeds ($22 million) to a charitable trust. He is the best example of what they call ‘an accidental entrepreneur’ and the book is the account of his entrepreneurial journey distilled into 40 lessons. You can finish this short book in less than an hour.
Peter Thiel, co-founded PayPal (with Elon Musk). He was also an early stage investor in Facebook, Linkedin, and SpaceX. He is one guy who has been there, done that. The book is based on Thiel’s lectures at Stanford University. Like a Zen master, Peter Thiel doesn’t believe in giving ready-made answers. His ideas are more like an exercise in thinking. The easiest way to become smart is to ponder what geniuses say, and this book is full of counterintuitive insights that will help your thinking and ignite possibility. The most interesting question that Thiel talks about, which he routinely asks people in interviews, is – “What important truth do very few people agree with you on?” Read the book — at least three times.
How much would you pay to have lunch with Warren Buffett? Mohnish Pabrai shelled out $650,000 (Rs. 4 crores) to win an auction to have a private lunch with Warren Buffett in 2006. Pabrai has built three successful businesses in the last 25 years including a technology company, a hugely profitable hedge fund and a remarkable philanthropic organization called Dakshana foundation. Dhandho is a Gujarati word which is best described as endeavors that create wealth while taking virtually no risk. Few bets, big bets, infrequent bets. Be a cloner. Prefer low-risk high-uncertainty business. Those are just a few of several wonderful investing hacks described in the book.
Sapiens (Harari’s first book) turned my world upside down. In Sapiens, Harari explained how homo sapiens came to be the planet’s dominant species. In Home Deus, he examines the new religion called Humanism — a creed which rests on the notion of individual choice and worship of the individual. The most exciting part of the book is where Harari intelligently speculates that humanity’s next targets are likely to be immortality, happiness, and divinity. He argues that science and technology will eventually make humans subservient to computer algorithms. Where Sapiens swept the cobwebs out of my brain, Home Deus marinated my grey cells with an intoxicating brew of science, philosophy, and futurism.