Wednesday, 12 December 2012

My Christmas Reading List (Tech, Politics, Conmen, Foodies...)

Amazon & Me

The Big Short

Let's not delude ourselves: Physical bookshops (and libraries) are toast. Now I love print books (I currently have 972 volumes, including 272 cookbooks) but the entire commercial structure of the print industry is going the way of the dodo. We can argue the toss about how e-books can't be fondled/are a licence not an heirloom/don't work on the beach, but the vast majority of industry profits come from the sort of low-brow high-volume SKUs which work great on e-book reader. Without them to prop up industry profits the rest of the ediface comes crashing down.

And if you want a great trade find a way to short Aussie booksellers. This is a highly-connected, English-speaking market with large urban concentrations where Amazon doesn't offer local distribution. When they finally get round to addressing this omission, Dymocks is going to get vapourised.

Stop, Look, Save For Later...

Of course smartphones only exacerbate the problem. When I see an interesting volume in a bookshop the first thing I do is flip up Amazon, check the price (its always cheaper) and Save For Later. Occasionally I might buy if its a small local bookshop (there used to be a great one in Islington, til it was slaughtered by Borders opening across the road. When Borders went bust I considered it poetic justice), but generally I see little point in conducting a Roger & Me style crusade to prop them up. The world is changing. Live with it.

Two big take-aways from this: 1) Enjoy your local bookstore while it lasts, 2) I get lots of random crap clogging up my Amazon Save For Later list.

I can't do much about #1, but I thought I'd share the love with #2:

For your consideration...

So here's a few suggestions that might appeal to readers of this blog. They mainly focus on interesting Tech, Business Models or good old fashioned Analysis.

I make no claims to originality (I reckon a third of my books are sourced from reviews in the FT or Economist) so some I'm sure crop up elsewhere. But if you are remotely curious about how the world works, I think you'll find something worth reading.

Note: I also thrown in a bunch of relevant reviews; for WSJ ones if you hit the firewall just re-Google the article title and you'll get a link which clicks through to the full review.

Makers: The New Industrial Revolution (Chris Anderson): I'm a sucker for 3D printing (sorry, additive manufacturing). As a school-kid I tinkered with freeware modelling programs like POVRay and Moray (IRTC RIP) and recently used Google Sketchup to model my new flat. I'm still waiting for the MakerBot to come down in price a bit, but I'm sure it'll get there. Unsurprisingly when Wired editor and Long Tail guru Chris Anderson came out with his take on the topic it went straight onto the list.

Nonetheless I feel I do need to offer a bullshit alert. Please note that this topic is now wildly overexposed (basically 3D Printing is this year's Big Data, which was last year's Cloud Computing). Also like all so-called "gurus", Anderson has a vested interest in selling you something; remember his Long-Tail schtick actually turned out to be complete BS. Enjoy, but with a pinch of salt. Reviews: GuarniadWashington Post, Forbes.

What Money Can't Buy: The Moral Limits of Markets (Michael J. Sandel): I've been a fan of Michael Sandel since his Reith Lecture series back in 2009. Sandel is a Harvard-based political philosopher with a brilliant gift for public debate. His definitive lecture series Justice (now available online) takes what should be a pretty dry Ethics 101 course and turns it into a tour de force of public engagement. If you don't believe me hit the first episode, which introduces classic Utilitarianism by shoving fat men off bridges.

Which is a long way of saying that if you are remotely involved in the markets (and who isn't nowadays?), then you should read this book. His main aim is to address the misconception that in the modern world any good is a fungible, tradeable commodity (e.g. would allowing rich people to bid for liver transplants ensure an efficient market for resources??). So sort of a response to the Credit Crisis, but one which (thankfully) is never preachy or smug. His most telling insight is this: The act of buying or selling a good sometimes change the nature of the thing itself. If you bought yourself a Nobel Prize, it wouldn't be a Nobel Prize at all... Reviews: WSJ, Guarniad, NY Times.

The Art of the Sale: Learning From Masters About the Business of life (Philip Delves Broughton): I admit, this is the sort of book which looks like it should be confined to the "Self Help for Morons" section of the bookstore. Writer interviews lots of "great" salesmen (from a hedge fund titan to a Moroccan carpet seller), writes a recap and says "you too can unleash your inner salesman". I call it the Millionaire Mind School of Writing.

Except Philip Delves Broughton is an author who deserves more respect than that. He is an incisive right-wing commentator who wrote an excellent (first-hand) expose of Harvard Business School that attracted delightfully sniffy response from the Deputy Dean. So I'm very much inclined to give him the benefit of the doubt.

And anyhow his basic point is right - having worked with some great (and not so great) salespeople during my career I definitely agree that an ace seller is one of the best assets any business can have. Read and learn. Reviews: WSJ, Bloomberg, Economist.

The Mark Inside: A Perfect Swindle, A Cunning Revenge, And a Small History of the Big Con (Amy Reading): I've always had a soft spot for the long con. Partly due to watching too many box sets of Hustle, but partly because a lot of the psychological tricks employed by con artists are equal pitfalls for the investor (the polite term for this is "behavioural finance").

The book opens in 1919 with the story of Frank Norfleet, a Texan Rancher who was swindled out of $45,000 by a gang of conmen. However instead of crawling away to cry he begins a four-year crusade to pursue the gang across the nation. Into this, Reading interweaves the story of his quest with a history of con artists, and America's shifting attitudes towards speculation.

NB for more on behavioural finance I recommend James Montier's Little Book of Behavioural Investing. For more on the art of the con (and how it affects ComSec) check out Kevin Mitnick's The Art of Deception. Reviews: Businessweek, Fortune, USA Today.

Moneyball for Politicos/Foodies

One trend I've noticed in recent years is that Engineers are Taking Over the World (I should know. I'm married to one). By this I mean that a variety of industries previously run on a seat-of-pants basis have been transformed by the appliance of science.

You only have to look at how cooking has been transformed by "molecular gastronomy" as chefs stopped trusting in received wisdom and started analysing why food works and how they could do to push the boundaries. In sports the rise of Moneyball (somewhat over-hyped IMHO... did the Oakland A's ever win anything?) has gripped the public imagination. And in politics Nate Silver (who started off as a sports statistician) caused a massive stir in the recently election.

What ties these together is the application of solid analysis backed up by empirical data. This is used to overturn entrenched orthodoxies based on received wisdom and instinctive decision-making (in behavioural finance speak: they have been calling out heuristic fallacies). As a professional analyst, I approve:

The Signal and the Noise: The Art and Science of Prediction (Nate Silver): Like most intelligent observers, I got moderately addicted to Nate Silver's FiveThirtyEight blog during the Presidential Election. And as a career analyst I've always been fascinated by the unconscious biases which creep into our forecasts (analysts always extrapolate a smooth continuing trend, ironic as that's the one thing guaranteed not to happen!). Silver's book lays out philosophical approach to prediction, with math and juicy anecdotes. Black Swan with less poultry. Reviews: EconomistWashington PostNY TimesWSJ.

Victory Lab: The Secret Science of Winning Campaigns (Sasha Issenberg): The recent Presidential election has been portrayed as the first "big data" election, but as Issenberg's book shows this was only the culmination of a century's quantifying how and what makes people vote. In effect he charts the history of data-mining in politics and how people developed the tools which allowed Obama to so precisely micro-target voters on Nov 6th.

Note it isn't only Dems who practice these arts. As Issenberg points out it was the Republicans who were buying ads on the Golf Channel in 2004 because Karl Rove's data told them golfers were more likely to support Bush than Kerry. This is a story of the small things which, put together make a big difference. In a nutshell, Moneyball for Wonks. Reviews: Washington Post, Fortune, New Yorker.

An Economist Get's Lunch: New Rules for Everyday Foodies (Tyler Cowen): If my penultimate book was Moneyball for Wonks, my last one is Freakonomics for Foodies. Cowen is an economist, junior chess-champion and food blogger - not surprisingly the book is a bit of a grab-bag of analysis and aphorism. Part of it is a potted history of how food in America got so bad (historical accidents, rather than commercialism actually). Part of it is an iconoclastic guide to where to find good food.

This bit of the book sounds the most fun. Apparently Pakistani restaurants with pictures of Mecca are a good bet as they are more likely to cater to natives (is this like not eating in Chinese restaurants full of gwailo?). American ;Cue is best enjoyed in small towns. Thai restaurants attached to motels are preferred. Locavores are also sharply  punctured (hear hear). Reviews: Spectator, WSJ, NY Times.

Full disclosure: I've chucked Amazon affiliate tags onto all the links above. Not because I am trying to make money (lifetime earnings from this blog are £3.30, but my wife wants £2.40 of that for her coffee budget), but because I'm curious about understanding how their monitisation engine works. But I thought I'd mention it.


  1. Thanks so much for including The Art of the Sale, Jon. And for helping it out of the self help for morons category! I appreciate it.

    1. lol cheers for dropping by Philip. Always enjoy reading your arguments when they pop up in the FT - you write a great deal of sense.

      PS Am I right in thinking at least one of the book's two titles was dreamt up by the publisher? At least I hope it was! :-x

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