What I’ve Been Reading

I read a lot of great books. Sometimes good reading comes in PDF form. Here are some that I’ve read lately that other people should too.

Jeff Bezos writes great letters to shareholders. This is a PDF of all of them since the beginning. They’re almost Buffett-level. Worth a trip through time for any aspiring business person.

If you do dig through Bezos’s letters, you’ll find a mention of decision making. If there were one single thing that wish I could do with expert-level perfection, it would be an ability to make better decisions. This is an analysis of how “unstructured” decisions are made. If Bezos felt it was worthy to be one of the few publications he mentions in all of his annual letters, then I think it’s worth considering that he seems to have been very good at making decisions over the years before not clicking the following link: The Structure of “Unstructured” Decision Processes

On Advertising: David Ogilvy recommends that everyone read this book seven times. Of course, Ogilvy would know how to write an endorsement. Here it is: Scientific Advertising

Here are copies I’ve downloaded in case any of the links go dead.

Amazon Shareholder Letters 97-12

Mintzberg – Decision Processes

Scientific Advertising

You make poor decisions

Here’s a talk from Charlie Munger. He’s Warren Buffett’s very close business partner who Warren would never have been as successful without. I’ve read and listened to a lot of what he’s written and said. He is extremely smart in that he’s able to notice things other people might now, and he’s also well-educated so that he has a lot of raw material to work with.

Watch this and take to heart what he says.

And here’s a summary of it thanks to The Motley Fool.

Also, here’s something that strikes me as relevant, probably due to the use of incentives, and the fact that it’s a good example of systems thinking, and Charlie would like it:

In 1986, new federal legislation, the Toxic Release Inventory, required U.S. companies to report all hazardous air pollutants emitted from each of their factories each year. Through the Freedom of Information Act, that information became a matter of public record. In July 1988, the first data on chemical emissions became available. The reported emissions were not illegal, but they didn’t look very good when they were published in local papers by enterprising reporters, who had a tendency to make lists of “the top ten local polluters.” That’s all that happened. There were no lawsuits, no required reductions, no fines, no penalties. But within two years chemical emissions nationwide had decreased by 40 percent. Some companies were launching policies to bring their emissions down by 90 percent, just because of the release of previously withheld information. — Thinking in Systems, Donella Meadows

The Difference Between the Janitor and the Vice President

[He] imagines his garbage regularly not being emptied in his office, and when he asks the janitor why, he gets an excuse: The locks have been changed, and the janitor doesn’t have a key. This is an acceptable excuse coming from someone who empties trash bins for a living. The janitor gets to explain why something went wrong. Senior people do not. “When you’re the janitor,” [he] has repeatedly told incoming VPs, “reasons matter.” He continues: “Somewhere between the janitor and the CEO, reasons stop mattering.” That “Rubicon,” he has said, “is crossed when you become a VP.”


On Personal Time, from a President

Bill Clinton, the last president in office with a child of grade-school age, tried to be present in his daughter’s life. Craig Smith, a political consultant who worked for Clinton in Arkansas and Washington, recalled that when he and then-Gov. Clinton would travel for the day out of Little Rock they would start out at the Governor’s Mansion: “I’d get there in the morning and the first thing we would do is drop Chelsea off at school. He took Chelsea to school every day. He said, ‘Let me give you a piece of advice if you’re going to have a life in politics. Take your kids to school in the morning, because you never know what time you’re going to get home at night.'”

As president, Clinton did spend time with his daughter during evenings when he could. Like Obama, he helped with the day’s homework. When he was out of town, he’d supply the assistance by telephone.

But unlike Obama, Clinton always found time to connect with people. While the self-contained current president is said to hold only a few friends close, the extroverted former president craves constant human contact. He would spend hours on the phone with members of Congress and his Cabinet, cajoling them on a vote or asking their advice or gaming out their appearance the next day on “Meet the Press.” He also stayed in touch with friends — from around the country, but particularly from Arkansas. When he couldn’t make it to Little Rock to reconnect with home, home would come to him. Old friends would stay overnight at the White House, although they might not sleep much, given that games of hearts with the president would extend into the wee hours of the morning.

As busy as they have been, all presidents have set aside personal time. Many — Dwight Eisenhower, Richard Nixon, Gerald Ford, both Bushes, Clinton, Obama — have played golf. Harry Truman took his daily constitutional and played poker with his pals. John F. Kennedy sailed. Nixon bowled. Ford swam. Jimmy Carter, perhaps the most diligent worker of the bunch, played tennis. Ronald Reagan rode his horse. George H.W. Bush drove his speedboat. His son cleared brush. Lyndon B. Johnson found time for such activities as phoning a Texas clothier to order, in exacting and earthy detail, half a dozen pairs of pants. Nixon spent time, well-lubricated by Scotch whiskey, in Florida with his friend Cuban-American businessman Bebe Rebozo.

Why doesn’t Obama like to schmooze?” – Michael Takiff

To get more done, do less

There is no hard and fast rule, but I would suggest incorporating a rest day once every seven to 10 days. The key is to listen to your body and its signals, irrespective of your planned training schedule. Spending the afternoon trawling the Gap for a bargain, pulling up every weed in your overgrown garden or trying in vain to assemble a wardrobe do not count as rest.

Buttocks-on-sofa is the position to assume.

To reiterate, it is not wasted time. Push aside any (unnecessary and self-destructive) feelings of guilt or laziness and trust that resting makes you better, faster, stronger and more resilient (and also gives you the chance to watch “Top Gun” for the 100th time).

Chrissie Wellington, four-time Ironman champ. The importance of R&R

OK. I’ll believe her.

It’s backed up by research on memory — doing nothing really seems to actually get things done. I can definitely attest that working too much is bad for your brain (and body, although I think the physical effects are more obvious). It’s almost like being depressed — it really takes everything out of you. The first time you feel this, you won’t even know what’s happening. It’s only when you look back after a while of relaxing that you can realize it.

The best warning sign: if you find yourself disliking something that you used to love, you should take a break from it. Time off can be a miracle cure, because too much of anything is a bad thing. Even water can kill you.

The dose makes the poison

Paracelsus aka Philippus Aureolus Theophrastus Bombastus von Hohenheim

How Advertisers Convinced Americans They Smelled Bad

And that’s when Young went radical, and in doing so launched his own fame. A door-to-door survey conducted by the advertising company had revealed that “every woman knew of Odorono and about one-third used the product. But two thirds felt they had no need for [it],” Sivulka says.

Young realized that improving sales wasn’t a simple matter of making potential customers aware that a remedy for perspiration existed. It was about convincing two-thirds of the target population that sweating was a serious embarrassment.

The advertisement goes on to explain that women may be stinky and offensive, and they might not even know it. The take-home message was clear: If you want to keep a man, you’d better not smell.

The advertisement caused shock waves in a 1919 society that still didn’t feel comfortable mentioning bodily fluids. Some 200 Ladies Home Journal readers were so insulted by the advertisement that they canceled their magazine subscription, Sivulka says.

In a memoir, Young notes that women in his social circle stopped speaking to him, while other JWT female copy writers told him “he had insulted every woman in America.” But the strategy worked. According to JWT archives, Odorono sales rose 112 percent to $417,000 in 1920, the following year.

via How Advertisers Convinced Americans They Smelled Bad | History & Archaeology | Smithsonian Magazine.

Consistency of opinion

There’s a blog post I’ve liked for a long time now. It’s from a guy who sent a postcard to Warren Buffett, asking for a piece of wisdom to someone who Warren had never met.

The reply on the postcard was “read, read, read”.

I’ve always liked this answer. And now I like it more.

Bob Rodriguez is CEO of First Pacific Advisors, and is a ridiculously successful investor. In 1974 he asked Charlie Munger (Buffet’s business partner) what would make him a better investor.

“In the fall of 1974 I was in graduate school at USC taking a portfolio-management investment course. The financial markets were in difficulty, and I didn’t understand how securities were being sold at such depressed levels. I had only recently discovered Security Analysis by Graham and Dodd when we had a guest lecturer come in named Charlie Munger, who went on about this idea of value investing. After the class was over, I walked up to Charlie and asked him if there was one thing that I could do that would make me a better investment professional. His answer was, ‘Read history, read history, read history.’ And so I became a good historian, reading both economic and financial history as well as general history.

“What I learned is that people relate to the crises they have experienced. So when the crisis of 2008 came, it felt like an old friend to me because it had so many similarities to the banking crisis of 1907. Asking Charlie’s advice and then reading history allowed me to put those things in context.”

And 34 years later, in 2008, Buffet tells some random guy to “read, read, read”. He didn’t use the words “read everything you can” or “be sure to read lots of books” or “get off my damn lawn”. It was “read, read, read”.

Makes me happy.

Bonus image from reddit the other day, titled “The Issue In A Nutshell”


This video is titled “The Pleasure of Finding Things Out”. At about 3:38, Feynman discusses his father and how Feynman was raised.

This is video of someone who is arguably one of the smartest people to ever live, who is widely known for being able to explain things well, and who is at an advanced enough age that he’s had a lot of time to think about his own life, as well as watch other humans grow from children into adults (which means he’s been able to observe the process many times).

To me, that makes the next 90 seconds very interesting. I think he explains the secrets of raising genuinely smart kids (or rather, what to do with kids in order to raise a genuinely smart adult).

  1. Spend time with them
  2. reading facts to them
  3. and discussing what you’ve read with an emphasis on relationships between things, cause and effect, etc.

You’re teaching the kid how to process thoughts — literally a “thought process”. You’re teaching them how to process the written word (and spoken word), as well as what to do when they have the thought in their head: do I understand this thing? Is it true given all the other things I know are true? If this is true, what else must be true?

And the rest of the video is good too.