Charlie Munger: The Complete Investor

By Tren Griffin

If you have no interest in economics or investing but you do you have an interest in rationality and learning how some extraordinary people think, you will enjoy this book.

Charlie Munger is Warren Buffet's partner in world of investing. His main approach investing is having a number of mental models (in different topics such as economics, management etc.) that consist of a few pieces "elementary worldy wisdom." These are essentially very simple statements, such as "Always have a margin of safety on an investment", which seem obvious but are surprisingly hard to follow without error for long period of time given that humans fall prey to cognitive biases, our emotions, or even just plain old laziness (thinking is hard).

My key takeaway from this book is knowing that you don't have be really intelligent as just consistently not being stupid can earn you massive long term rewards.

Also Tren Griffin's twitter is top notch.

Originally posted on Facebook January 11, 2017.

How Not To Be Wrong

By Jordan Ellenberg

NOT PART OF REVIEW

To start, reading non-fiction books almost always feels like a chore despite how much I enjoy them. With the completion of this book I feel I finally know a good way of enjoying and getting more knowledge gains from non-fiction audiobooks although how much I will follow the advice I'm about to outline remains to be seen.

My main time for audiobooks is in the evening once I get home from work. During the first half of this book I generally couldn't must the mental energy at this time to visualize the projective plane or other problems that are purposed in the book at a time when my mental energies seem to be at their daily low. After having started this book over 2 months ago and not yet having finished 6 hours of it (when I have no problem finishing a 50 hour Tom Clancy in a month) I decided to take a new approach. 

When I encounter something I don't understand (such as getting stumped visualizing the protective plane) I would rewind the troubling sentence over and over again while failing to grasp what the author is intending to convey (which usually ends with me pausing the book and moving onto something else). This makes the book feel like a chore and makes me not want to pick up where I left off since I know I'm at a mental roadblock and will require a great deal of thinking when I start the book again. This is why the first half of the book took so long for me to complete. 

For the second half of the book I took a new approach of simply mentally noting what I didn't understand and moving on. I would not rewind anything until I reached the end of the chapter. At that point I would decide one of three things: that I now understood what was stumping me before, that I no longer cared about what I didn't quite grasp (perhaps it was not that integral to understanding the rest of the chapter), or that I should start the chapter over and try again. I really loathed the 3rd option because it made me feel stupid (oh look at this guy, he has to read this chapter TWICE) and it made me feel inefficient. However I managed to argue (to myself) that having a book sitting idle in the library and wasting good listening hours because I'm scared of failing at learning something isn't very efficient either. Also I went through the second half of the book in about a week despite listening to multiple chapters multiple times.

Note: Acknowledging that I don't understand an aspect of a book and deciding to move on in the interest of time or mental energy is different than the Craig approach of just straight up not listening while the audiobook plays in the background and using this as evidence that you didn't enjoy the book (see his impending review of Red Storm Rising). 

In summary I need to get better at convincing myself that just because I burn an Audible credit doesn't mean I have to understand and remember every aspect of the book. If I approach every book like this I'll burn countless hours learning everything about one book when I could have learned a less perfect % of more books.

REVIEW BEGINS

This book is full of small consumable scenarios that showcase how using mathematical thinking can be beneficial. A few things I learned more about from this book are: p-value hacking, geometry of numbers, not all curves are lines (and other forms of non-linear thinking), and mathematical formalism (and it's relation to voting in democracy). 

I understand that the print version of the book contained multiple figures which might have helped my absorption of knowledge in the first half of the book, however there was no point in the second half of the book where I felt there was any content lacking by consuming the audiobook.

I'd recommend this book to anyone looking for a good non-fiction gain-fest.

Originally posted on Facebook December 28, 2016.

Influence: The Psychology of Persuasion

by Robert Cialdini

Scott Adams listed persuasion as an essential skill and Influence is one of the books he recommends on the topic. This book is about compliance. It details methods for making people more compliant to your requests and also gives tips for resisting the compliance techniques of others. Overall I found the book very enlightening. Below I'll go over the main persuasion techniques covered by the book.

The book intros with details on how certain trigger features will start automatic responses in people. At some point in our evolution these the automatic responses to the trigger features were beneficial to our survival. However in modern life these trigger features can be abused to produce responses that aren't in the responders best interest.

The first persuasion technique introduced is the contrast principle. It's simple, effective, and can easily be used in combination with the 6 other techniques which make up the bulk of the book. The choice you want the person to make is first contrasted with a less desirable choice. A simple example is going to a bar with less attractive friend to appear more attractive in comparison. For a more complicated example, imagine you are a suit salesmen and a client wants to buy a suit ($$) and a sweater ($). Should you try to sell the suit or the sweater first? If you are trying to make as much money as possible, you should sell the client the suit first. This is because it will be easier to sell a more expensive sweater when it's price is contrasted against the more expensive suit the client just bought.

The other 6 persuasion techniques are:

• Reciprocation - When someone does something for us we feel obligated to reciprocate. This can be exploited by setting up an unbalanced reciprocation scenario where the initial favour is many times smaller than a presented opportunity to reciprocate. Reciprocation is essentially someone offering a concession and the other person feeling obligated to make a concession of their own. In this sense, if your initial offer for request is refused, you could retreat to a less beneficial request (ex. well if you won't do that would you at least consider) which is framed as a concession. The other person would then feel obligated to make a concession of their own. This is called the reject and retreat technique and it also gets benefit from the contrast principle.
• Consistency - People like to appear consistent, even if its against their own interest. This is obvious to anyone who has tried to get someone to change their mind on something they have been publicly vocal about. A study was conducted where the researchers asked home owners if they would place an obnoxiously large sign in their yard promoting some environmental cause. The sign was so large it was rejected by the vast majority of home owners. A different group of home owners were first asked if they would be willing to support environmental causes, which nearly everyone supported. They were then asked if they would allow the large sign to be placed on their lawn and the majority said yes. Even if they were asked about supporting the causes weeks before being asked to place the sign (by different people), they still allowed the sign to placed on their lawn. 
• Social Proof - Social proof is often far stronger than facts. If everyone else believes it, it must be true. Pluralistic ignorance is when an entire group is fooled in a situation where a single individual wouldn't be fooled. This is summarized as "no one believes but everyone believes everyone else believes so they follow the actions of everyone else." The bystander effect falls under this category. Convince others and you will become convinced (all those reports of gay hating preachers getting caught doing very gay things suddenly make sense). Increasing similiarly between the people increasing the potency of social proof. The chapters on social proof also had some incredibly scary statistics about the strong correlation of the news covering a suicide and the increase of plane crashes or single car collision fatalities. Check these out on your own.
• Liking - You are more likely to comply with someone you like. The halo effect means one aspect you like of someone can have you inflate their abilities in other areas (this good looking salesman must also be pretty smart). Good cop bad cop employs the contrast principle and liking to get compliance from suspects.
• Authority - Milgram experiments. A person with a perceived high status (even if unverified) can cause us to bypass our own thinking as following the prompts of authority is the path of least resistance.

• Scarcity - People tend to be motivated more by potential loss (FOMO) than by potential gain. Limited quantities, deadlines, banned views (teenagers and Streisand effect?), and exclusive information (conspiracy theories) are all techniques that can be used to increase compliance.

As always, here is a quote I found enjoyable.

When prestige, both public and private, is low we are intent upon using the success of associated others to restore our own image.

The Mysterious Island

by Jules Verne

This is an amazing book from the 19th century to read because you don't feel the time difference based on technology (wow life is tough without phones) or social/political stuff (wow they are sexist). Instead you get to feel the time difference directly through the characters.

At the very start of the book some prisoners of war (during the American civil war) escape in a balloon which ends up getting blown out to sea and eventually lands on an island. They then science the shit out of their situation and put survivor man to shame with their ingenuity and hard work. However the group soon discovers that there is something very mysterious about the island.

Imagine Lost but with a group of fully competent people and an emphasis on actually using what the island provides to survive. 

Also if you think theres isn't much you can learn from people from the 19th century, prepare to be surprised.

Originally posted on Facebook December 4, 2016.

How to Have a Good Day

by Carolina Webb

Most non-Fiction books I enjoy fall into two categories. They either leave me satisfied with the received knowledge of a few key ideas or they leave me slightly frusterated because even though I'll remember a few key points made by the book, it will also tons of contain smaller and more specific tidbits of knowledge that I'll no doubt forget the moment they could actually benefit me. I've tried combating this in many forms such as taking rigorous notes, loading my audible up with bookmarks and saved clips, making cheat-sheets of my favorite parts, and now writing a summary on the internet.

At the very start of the book the author lays out a few hard scientific results which have been replicated many times by psychology researchers. One of these is the difference between our deliberate thinking (conscious thought) and automatic thinking (sub-conscious thought). Generally people think that our deliberate thinking dominates how we perceive the world and how we act based on those perceptions, but in reality our automatic thinking can be more powerful (and rarely more beneficial in our current world, for example cognitive biases). One of the studies referenced which shows the power of the automatic thinking, is the selective attention test by Daniel Simons and Christopher Chabris. This is where a gorilla walks in between a group of people passing a basketball around. Some 50% of people are found to have not seen the gorilla when told to count how many times the basketball is passed around. This is because their automatic system is filtering out unnecessary information. This is at the core of one of the key points I learned from the book which is setting your intentions.

Imagine that you are going into a meeting and you are told that the person leading the meeting is always mean and rude to others in these types of meetings. Just like the people who were told to count the basketball passes had their automatic system filter out the gorilla, going into a meeting with the intention of seeing someone being mean or rude could cause your automatic system to filter out things that don't fall in line with what you expect while emphasizing on what does. This could cause you and someone told to expect the meeting leader to be courteous and nice, to perceive the meeting in two totally different ways.

Setting your intentions is really as simple as pre-loading your attitude so that your automatic system will focus (and not filter out) what is important. The author suggests to not being shy to visualize exactly what you want in an attempt to make as clear communication as you can with your automatic system. Setting your intentions can also greatly effect our actions which our automatic system plays a strong role in also. Pre-load your intentions before a meeting by thinking how you want to appear confident, and the author suggests you'll naturally sit more upright, speak louder, and appear more confident to others.

The author suggests that cognitive biases are simply our automatic thinking doing tasks that really should be left with our deliberate thinking. When we perform confirmation bias for example, the author suggests that this is our automatic brain filtering out information that would force us to change our minds. The evolutionary argument is that changing our mental model requires our deliberate system to think hard which costs energy and resources. If you set your intentions right, you should be able to help fight this control of the automatic system. In fact this is what anyone who is trained in rationality does naturally. Hmm I'm about to do _____ and I know that generally the _____ bias could have a drastic effect on circumstances like this. I'll just try to make myself as aware as possible of the bias in the hopes I don't commit it. 

Intention setting and understanding how large of an impact our automatic system can have (and hopefully realizing when its taking control so you can combat it if you need to think deliberately) is definitely my key take away from the book. Here are some of the small but interesting tidbits of information I enjoyed and hopefully won't forget:

• Give up multitasking. Studies have shown repeatedly that multitasking makes your far less productive. In fact studies have also shown that thinking your great at multi-tasking means your even worse than most people at it. Focus on one thing at a time. Cut down on distractions and when some new tasks pops up, put it aside to finish when your done. Batching is also a good thing (saving all your laundry, bills paying, stuff like that for one set block of time every week).
   
• Take breaks often. At the very least every 90 minutes get off your ass and do something physical to give your body a refresher and also give your mind a break by thinking of something else. Your going to work even faster after your break and you'll end up being more productive than just powering through. You aren't wasting time either, think of it as a formula 1 car taking a pit stop. Even for cars that go 300 Km/h it makes sense to come to a complete stop, if that stop allows them to go even faster once they start up again. Also get your sleep if you have a mentally demanding job. The book references studies which show how just losing an hour of sleep each day reduce your mental performance drastically.
   
• Practice mindfulness. Google it, there's better info out there on it than I can provide.
   
• Extreme listening. For any of you with a long term girlfriend you can skip this part as you already know it. Just because someone is complaining to you about something doesn't mean the best course of action is to jump at them with solutions. In fact this usually has the opposite effect and puts them in sort of a defensive flight/fight mode (which is their automatic system taking over and stopping the deliberate thinking). When dealing with situations like this you have to be very careful to ensure your always dealing with the other persons deliberate system and by not putting them into a defensive mode where they feel like their intellect is being challenged.
   
• When struggling with a complex problem, try adding social context to it to help make it easier to think about. Studies have shown that we perform way better at games that have social context than games that don't. Ex. there are four cards in front of you. Each card has a letter on one side and a number on the other. The cards you see in front of you are [ D A 3 7 ]. Which cards do you need to flip over to confirm that the rule "All cards with a D on it, must have a 3 on the other side." The answer is that you flip cards D and 7. 75% of people decide to flip 3 as well, though its not needed. However add social context and the results improve so that only 25% of people get the wrong answer. For example, instead of letters use beer and water, and have the numbers represent a persons age. Then tell the person they are a bouncer and they must make sure that no one younger than 18 is drinking. [ Beer Water 20 13 ], see much easier.
   
• Procrastination is simply present bias (damn automatic system) mixed with a skewed cost/benefit analysis that under estimates the cost of not performing what you are procrastinating for. To help ease procrastination, un-skew the cost/benefit by making yourself painfully aware of the costs or add some extra benefit for yourself.

Originally posted on Facebook July 22, 2016.

The Art of Learning

by Josh Waitzkin

This is the best non-fiction book I have ever read. However it's not a book I would recommend to everyone and I certainly don't think it would be a good book for someone just getting into non-fiction books based on success or self-improvement. This book goes deep and could seem "woo wooey" to someone who isn't primed to be receptive to certain ideas. I believe if I read this book 3 years ago I would have at best thought it was meh and at worst thought that it was a bunch of BS. This is a book about how the mind learns. As a result, items such as subconscious, meditation, intuition, and visualization are touched on quite frequently. 

If sentences like "to be world class you need to express the core of your being through the art" or "the process of digesting knowledge over and over again shifts it from the conscious mind to the unconscious mind where it can connect with other chunks of knowledge and manifest as a burst of insight" sound odd to you, I'd consider saving this book for another time.

Josh Waitzkin was a chess child prodigy. He won 8 national championships in chess before the 10th grade. The book and movie Searching for Bobby Fischer are based on his early chess life. This led to him being a national celebrity at age 15. Eventually Josh stepped away from chess and begun learning the martial art of Tai Chi. Noticing parallels between learning chess and Tai Chi, two seemingly different things, is what inspired him to write this book.

This book is about learning and optimal performance. This is not a pareto based book about how to get 80% of the way there. This book is about going from good to great or from great to elite. Josh is a national champion in chess and a world champion in Tai Chi. The topics of this book are about the techniques he found when becoming an elite level performer.

Below I go over a few concepts from the book I found interesting.

Entity vs incremental theories of intelligence and ability.

Before you can begin learning you must differentiate between entity and incremental theories of intelligence and ability. If you play a sport for the first time and suck, an entity theorist would attribute that failure to your lack of natural ability. An incremental theorist would attribute that failure to your lack of practice.

Incremental theorists generally accept challenges where they can fail. They believe they have the ability to grow and add to their knowledge through failure. Entity theorists will avoid challenges with a high chance of failure as they don't want to be made aware of their own intrinsic shortcomings.

An entity theorist believes your current level is indicative of who you are. An incremental theorist believes your current level is indicative of where you are.

Learning the Macro from the Micro

Bruce Lee said "I fear not the man who has practiced 10,000 kicks once, but I fear the man who had practiced one kick 10,000 times." Depth is more important than breadth.

In Josh's words "Dive deeply into small pools of information in order to explore and experience the operating principles of whatever we are learning. Once we grasp the essence of our subject through focused study of core principles, we can build on nuanced insights and, eventually, see a much bigger picture. The essence of this approach is to study the micro in order to learn what makes the macro tick."

Investing In Loss

In order to improve you must be willing to invest in losing. If you are wanting to learn a new sport or activity, you have to be willing to be bad and lose for a long time. However even if you are an expert at something, you will need to invest in loss to move to a higher level. For example if you are a professional athlete and you change some aspect of your game, you need to try it out on real opponents in real games. If you were not willing to invest in losing a few games you would be unable to ever try new techniques.

Numbers to leave numbers

Numbers to leave numbers is about how learning a concept and then constantly practicing can ingrain and internalize that knowledge. This is required before we can move on to learning something more complex by using what we already know. 

"By studying discrete pieces of information thoroughly and practicing their application repetitively, they eventually shed their technical, nitty-gritty character. This happens because  the process of digesting small chunks of knowledge over and over again shifts it from the conscious mind to the unconscious mind where it can connect with other chunks of internalized knowledge and manifest as the sudden burst of insight we experience as free-flowing intuition. This high level of knowledge integration is what we should aim for—it allows us to access what we have committed to learning in a fluid, precise, and improvisational manner."

Making smaller circles

By focusing on a basic set of concepts or practices over a period of time, we can gradually internalize the knowledge. However, the next step in the learning process is slowly peeling away unnecessary weight and driving at the core of the concepts or techniques. You must turn the large into the small. Reviewing and creatively exploring the internals of these basics over and over again leads to a lighter but more potent understanding of them.

Making sandals

"To walk a thorny road, you don’t need to pave the entire road; just make sandals."

Often we try hard to fight off or ignore distractions or things that bother us. If something is rocking our boat we must first learn to flow with the motion. The second step is to use these distractions as inspiration to funnel and focus our ability. The final step is learning to cultivate these situations so we can achieve the focus of the second step without requiring something to rock our boat in the first place.

Conclusion

A few weeks have passed since I finished the book (and started this review) so I've been able to determine which aspects of the book I continue to think about. What I've found is I've spent little time reflecting on the major parts of the book (which I have gone into detail above). It's not that I see these parts of the book as uninteresting but rather they are not what I need at this point in my life. Instead the vast majority of my thinking has been on the more sublte aspects of the book where Josh conveys the core principles of how he lives his life.

These principles as I found them are:

• Cultivating empty space - If we are always reacting to input, we aren't able to create our own thoughts. Empty space helps calm the waters so you can listen to your subconcious in the silence. This empty space is needed for the development of ideas.
• Daily processes vs long term goals.
• Internal vs external framing - If your held by a sense of guilt whenever you are not working, then you are letting external pressures impact you. But if your nurturing from the inside out of your creative process, then you’ll be fine stopping your work with a sense of direction.
• Embracing your unique disposition.
• Seeking challenges head on - imagine where you'd be a year from now if you decided to steer into every insecurity or challenge you are worried about.
• Being content with disorder - you shouldn't try to block out noise or distractoin, instead become content with it.
• Most importantly living these principles during all the little moments of your life - see last quote below.

I highly recommend the audiobook as it's read by Josh himself. Tim Ferris (author of The 4 Hour Work Week) bought the rights and produced the audiobook because he enjoyed the book so much. As an added bonus, Tim included an hour of his podcast conversation with Josh at the end of the audiobook.

As always, here are a few quotes I found enjoyable or insightful.

Growth comes at the expense of previous comfort or safety.

Tactics come easier once the principles are in your blood.

In my experience successful people shoot for the stars, put their hearts on the line in every battle, and ultimately discover that the lessons learned from the pursuit of excellence mean much more than the immediate trophies and glory.

In the long run painful losses may prove much more valuable than wins. Those who are armed with a healthy attitude and are able to draw wisdom from every experience, good or bad,are the ones who make it down the road. They are also the ones who are happier along the way.

I believe that one of the most critical factors in the transition to becoming a conscious high performer is the degree to which your relationship to your pursuit stays in harmony with your unique disposition. There will inevitably be times when you need to try new ideas, release our current knowledge to take in new information. But it’s critical to integrate this new information in a manner that does not violate who we are.

More often than not the climactic moments in our lives will follow many un-climactic normal hum drum hours, days, months, years. So how do we step up when our moment suddenly arises? My answer is to redefine the question. Not only do we have to be good at waiting, we have to love it. It's life. Too many of us live without fully engaging our minds, waiting for that moment when our real lives begin. Years pass in boredom but that's okay because when our true love comes around or we discover our real calling, we'll begin. Of course the sad truth is that if we are not present in the moment, our true love could come and go and we wouldn't even notice. And we will have become someone other than the you or I who would be able to embrace it. I believe in the appreciation of simplicity, the everyday. The ability to dive deeply into the banal and discover life's hidden riches, is where success, let alone happiness emerges.

I'd also recommend Josh's second podcast with Tim.