Howard Marks

A good pundit on the economy and investing is Howard Marks, founder of Oaktree Capital. Occasionally, maybe once per quarter, he writes a memo that can be found here (which was also made into a podcast this week). Incidentally, I started writing memos to myself and then publishing them as a direct result of his influence.

Aside from reading his past memos, I have also read his two books as they summarize the methodology that informs his firm’s investing practices:

If a reader is looking for a formulaic approach to investing, unfortunately he will not be the source. Instead, he largely acknowledges that investing is hard, the future is largely unknown, and one simply needs to take action with the information they have at their disposal. Reading through these two books, below are a few highlights.

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Daily Rituals

The book this week is Daily Rituals by Mason Currey. It is a fairly quick read with short chapters about how successful creative people crafted their own working days. I found myself enjoying a glimpse into these people’s world, even if I often separated the person’s work and lifestyle that supports the work from their sometimes flawed character.  

While this book comprises of a collection of anecdotes about creators over time, similar themes continue to pop up that point to those habits most productive people share in common. These include routine, reflection, exercise, time-blocking, focus, and steady progress. 

A danger of works like this is that it possibly fetishizes habits where a reader can keep going on gathering stories about work habits as opposed to distilling the essence of the obstacle these routines are addressing. One can go on requesting “one more” story as opposed to simply enacting basic changes to their lives and, by doing so, making them more prolific. 

Below is more color on some of the themes that I pulled from this book.

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Coach K

Mike Krzyzewski, or Coach K, has been Duke men’s basketball coach since 1980. He is the winningest college basketball coach ever and has the most national championships by a current coach and won four national championships.

Seemingly it is easy for successful basketball coaches to get into business management speaking and writing. They are effectively managers; they are not in control of the outcome of games, as their players perform all of the action. Instead they prepare them, gameplan against their opponent, identify and address weaknesses and during the game, make substitutions and call time-outs to provide feedback. As a fan, you can see drama play out on television in the span of a few hours. The fact that basketball coaches are visible and often wear suits also helps bridge the transition into business. 

It’s not convincing that successful basketball coaches would be successful in other fields. Would they be adept at business or blue-collar work or as a car salesman? Probably not. They have a specialized interest and have developed a skill-set that is appropriate for basketball, not plumbing or computer software. With those caveats aside, the ups-and-downs within basketball are interesting to witness. Lessons learned from those trials are beneficial. While a basketball coach seems to provide a cheap form of advice on business, excellence in any field should be studied, particularly one where a supporting cast will dictate success.

As a lifelong Duke fan, it is natural to look to Coach K for guidance. As expected, most of his books are similar in content. Below are excerpts from my reading of the following:

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How The Economic Machine Works

Have you ever watched a news segment or read an article about fancy economic stuff and then realized you didn’t understand a thing they were saying? It happens a lot, even to people that have fancy degrees that are supposed to know this stuff. In times like that, I watch this.

Today’s book is not a book but a video (though I’ll still call this a BookMarc). The video we will be discussing today is How the Economic Machine Works by Ray Dalio.

I have watched this video in its entirety about two dozen times. It’s a regular go-to for me and I revisit it a few times a year, mostly in situations that I described above. In any kind of complex yet everyday field, I find that it is important to have a methodology that you follow. This “economic machine” video is a simpleton way to look at the economy, which can be complex, but is still fairly comprehensive. It acts as my economic manual and I hope more of you will use it as a resource as well.

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Good Profit

Today we visit the book Good Profit by Charles Koch.

As you will probably quickly realize, the book is written by one of the leading libertarians and largest republican donors today. It would be easy to simply think that this book must have a political slant. On the other hand, Charles Koch is the CEO of Koch Industries, which is the second-largest private company in the US with revenues of $110BB (Cargill is the largest with revenues at about $115BB). He is also the 18th richest person in the world with a net worth of about $45BB (his deceased brother, David Koch, was number 11 on the list with a net worth of around $51BB and his other two brothers are wealthy as well). Regardless of political affiliation, there are lessons to be learned from successful executives who manage a conglomerate of businesses.

Good Profit is a distillation of the Market-Based Management (MBM) philosophy that Koch Industries has developed over time. Here are a few excerpts that stood out to me and are concepts that caused me to think about personal or project-related issues.

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The Effective Executive

Today’s book review is in regards to The Effective Executive by Peter Drucker

The Effective Executive is a book that I would recommend to any white-collar worker. Drucker was a great writer on management having written 39 books over 60+ years. This book, written in 1966 is probably his best known book and focuses on managers in business “getting the right things done.” While many aspects of the business world have changed, particularly in regards to technology, the principles at the core of this book have not.

As will be the case going forward, while I took many pages of notes on the books contents and it has informed my workflow greatly, I have gone deep on only a few concepts below. 

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Brain Rules

This is the first of many planned book write-ups. I’m thinking of calling these type of posts BookMarc’s. Speaking of horrible humor, in addition to being a hacky comedian, I am also a real geek and often take lots of notes when reading a book. 

Regarding the structure of these posts, what I don’t like in a book review/recommendation is for someone to simply highlight passages of a book in their kindle and then spew it into a synopsis about the book. Additionally, bulleted lists of contents from the book are also lazy and lacking. Articles like that a) don’t make me want to read the book as I already have a synopsis of it and b) aren’t that enjoyable to read anyways. 

Instead, what might make sense is to take a few concepts from a book and then elaborate on them with my thoughts or connections that I have made from other resources. My process may start off looking like a top ten list but then a few items emerge that cause my thinking to expand on the subject matter. My thoughts may not even largely come from the book in question. The hope though is that you as a reader are interested enough in the book to read it. 

As far as the quality of the books, I won’t waste my time or yours with any books that I don’t recommend. So it should be implied that any book that I do write about is a good one. 

This post is about Brain Rules by John Medina.

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