What Are You Reading?

What Are You Reading?

While we tend to incorporate a fair number of athletic references in our research notes, the Hedgeye Risk Management team is also a bit on the nerdy side and we quite enjoy reading.  In fact, our CEO actually reads a book every ten days.  (If he speeds it up a little, he may catch me some day!)

 For your enjoyment and interest, below we’ve listed some of our current favorite book recommendations.  These selections are from all members of our team, from research to technology, and all parts in between.  Each team member also wrote a brief note as to why they enjoyed the book and why they believe it is important to read.

We hope you will enjoy the list.  And please do forward us your recommendations.

Best,

Daryl G. Jones

Managing Director

1. “A Whole New Mind” - by Dan Pink
The book argues that the future of global business belongs to the right-brainers; it’s counter to what most companies accept as the “standard”.

2. “Extreme Programming Explained” – by Kent Beck
Brilliantly short approach to software development that addresses technical, managerial, and people issues.  Technical brilliance aside takes in to effect people at all parts of the process, as opposed the plug and play replaceable parts that most processes account for, better than the kinder, gentler 2nd edition in that his response is more extreme, and thus harder to maintain.

3. “Three Cups of Tea” – by Greg Mortensen

Really interesting glimpse into what's going on in remote parts of Pakistan and Afghanistan.  Book is uplifting and inspiring in what an organization is trying to do for education there. 

4. “The Moral Animal: Evolutionary Psychology and Everyday Life” – by Robert Wright

What’s not to love about a book that provides a scientific justification for cheating?  On a serious note, this is fascinating book that provides the genetic background to much of our instinctive behaviors.  Rooted in early Darwinian research, the book posits, and maybe rightly so, that perhaps we humans are nothing more than moral animals.

5. “The Education of a Speculator” – by Victor Niederhoffer

This is one of the few accounts from a global macro risk manager that actually tells you what it is that we men and women of the early morning macro shift actually do. Niederhoffer checks all of the boxes that resume chasers want to see (Harvard B.A. in stats/economics; Ph.d. from University of Chicago). At the same time he was a world class athlete (champion squash player) and someone the "he's smart" crowd can't deny (worked for Soros, managing all of fixed income and FX from 1). He's also blown up, which helps show what real experienced risk managers need to have learned firsthand. He's a renaissance man.

6. “The Next Asia” – by Stephen Roach

Roach is Chairman of Morgan Stanley Asia and a keen analyst of the world’s economic situation.  The book is a collection of columns, small essays, postings, research notes etc going back to 2007, when this all started breaking out, and Roach clearly explains the underlying mechanisms of the financial crisis.  The book was a disappointment to its publisher because the press didn’t get enthusiastic about something that was “just a collection of old columns.”  Consequently, the book did not sell really well, which is too bad.  It is a crystal clear analysis of a highly complex situation, presented in plain English and full of insights that should shape our view of what is going on in the world today.  The pieces are short – usually no more than 3 pages – so they make convenient reading.  It’s a great history book for the intelligent non-professional who wants to understand how this whole mess happened.  And it’s a useful antidote to the professionals’ propensity to solipsism.

7. “Market Wizards: Interviews with Top Traders” – by Jack Schwager

Crux: I've always thought the best way to learn anything is to learn from those who know it best. Who better to learn investing from than some of the most successful traders in history. This book is a compendium of interviews with legendary traders and investors. What I like best about the book is that the common denominator of the interviewees has nothing to do with their approach to trading or investing - they have wildly different durations and use different instruments and have completely different approaches. What they seem to share in common, however, is a very strong sense of risk management and a core set of investing or trading principles that they stick to throughout their career. This proves that there is no one right or wrong way to be successful at investing. Rather, you need to have a process that is consistent with your beliefs and a risk management approach that keeps losses to a minimum.

8. “Manchild in the Promised Land” – by Claude Brown

It’s very compelling story about a ghetto kid growing up in Harlem in the 50’s and making his way to college though a childhood of crime.

9. “The Places In Between” – by Rory Stewart

In 2002, immediately after the fall of the Taliban, Stewart set out to cross Afghanistan on foot.  The book can take its place on the shelf alongside the best of his British Adventurer forebears – TE Lawrence and Wilfred Theisiger (Lawrence: Seven Pillars of Wisdom, Thesiger: Arabian Sands.  These are must-read books if you want to know about the world we live in today.  Thesiger was the first European to document a crossing of the Empty Quarter – the Arabian desert – and he tells his tale quite well.  Lawrence is a brilliant stylist, possibly very heavily coached by GB Shaw, whom he credits with helping out with the MS.)  Unlike the news reports of the Afghan war, this is personal experience of the places and people of Afghanistan, coupled with striking insights into the history of the place, and of human nature in general.  It puts the Afghan war – and with it, our perceptions of humanity – in a whole new context.  As with the writings of Thesiger and Lawrence, once you read this book you will never look at this part of the world the same way again.

10. "A Short History of Nearly Everything" – by Bill Bryson

This ranks as the greatest book ever written. Over the course of 500 pages, Bryson explains in funny and laymen's terms what amounts to the entire scientific knowledge our species has acquired and how it came to acquire it. Required reading for any enlightened individual.

11. “Fooled by Randomness” – by Nassim Taleb 

It gives a great insight into misconceptions in business, investing, and life caused by people not recognizing randomness and the role it plays in those spheres. At present, with politicians piling debt upon debt, a trick that has been tried before, Taleb's passage on man's tendency to "denigrate history" (not learn from others' experiences) is particularly telling.

12. “About Grace” – by Anthony Doerr

Themes of long cycle natural phenomenon alongside a personal story of loss and renewal.

13. “You Are Not A Gadget: A Manifesto” – by Jason Lanier

Provides a less optimistic view point of new media.

14. “The Pragmatic Programmer: From Journeyman to Master ”  - by Andrew Hunt and David Thomas.

This book speaks to me about what software development is all about: all the categories of skills and tools needed.

15. “Guns, Germs and Steel” – by Jared Diamond

It is seldom that I find a book that starts from a simple premise and profoundly shifts my world views, and the record of how relative events across the world occurred in the same timeframe.  Although China was not well covered in his analysis, and can challenge some of the main points, the breadth of the work makes it stand in my opinion as one of the best recent books I have read.

16. “The Great Gatsby” – by F. Scott Fitzgerald

The range of human spirit.  However flawed; it’s colorful.  Glass houses being so alluring yet so fragile.  How prestige is a mirage and the people who hide behind society are sometimes the weakest characters.  The struggle to survive and succeed more interesting than the success in and of itself.  The curse of being a human being.  “Wanting” can destroy.

17. "Quasars, Redshifts, and Controversies" – by Halton Arp

In essence, astronomer Halton Arp identifies many irregular galaxies and forms a theory about their properties, but this theory accumulates more and more evidence against it.  Blindsided by selection effect, he battens down the hatches and concludes that the problem is with the scientific establishment, not with his research.  This is true for a handful of scientists/schools every hundred years - Copernicus, Galileo, Einstein, etc. - and the rest of the time the proponents are quacks.  Arp propels himself into the latter category, despite a hugely successful early career.

18. “Atlas Shrugged” – by Ayn Rand

The lessons of Atlas Shrugged are timeless.  Through a captivating fictional story, the destructive impact of government is exposed.  The book is more relevant now than when it was written in the 1950s. 

19. “Cod” - by Mark Kurlansky

Cod is a story of exploration and ambition around a topic near and dear to me: food.  Cod takes us on the multi-century journey of the dance between two species: man and cod. From 14th century Basque fisherman crossing the Atlantic in open boats to chase a prized commodity, to evolving markets and tastes over time, and through the complex interplay of global forces even today. A thoughtful, data-driven, and well-written case study on a dying industry, with crisp lessons on human nature, resource depletion and the market’s unstoppable force. 

20. "Salt" – by Mark Kurlansky

Reminds us that in a world so complex, when you look back at why or how we get to where we are today...the answer can be so simple.

21. "State of Fear"- by Micahel Crichton

For the prologue alone, I believe that Michael Crichton reveals the depths to which group think can betray society.

22. “Lone Survivor” – by Marcus Lutrell

Amazing story of pride, promise, and unbreakable will that provides invaluable perspective to any challenge.

23. “The Alchemist” – by Paulo Coelho 

Story of a young Spanish boy on a mission to fulfill his Personal Legend (Destiny) and find his Treasure (Fulfillment).  The book depicts the transformation of innocent and pure youthful dreaming into an optimistic reality of achievement.  The boy is led by the signs of the universe and the guidance of great kings and alchemists with some obstacles along the way but finds that in the end of his epic journey that the fulfillment of his dream was the journey itself.   

24. “The Accidental Billionaire” – by Ben Mezrich 

The story of two socially awkward Ivy leaguers, trying to increase their chances with the opposite sex, ended up creating FACEBOOK.  Harvard boys with a mathematic background and less-than-smooth approach with the female population.  They just wanted to meet some girls.  

25. “Hatchet” – by Gary Paulsen 

Hatchet is the story of a boy named Brian. On a trip to the Canadian oilfields to spend the summer with his dad, the pilot of the Cessna he is traveling in suffers a heart attack and dies. Brian must land the plane in the forest. Brian learns to exist in this wilderness. He faces many dangers including  hunger, animal attacks, and even a tornado. This book gives the reader a better understanding of what it is like to survive in an untamed land.