Book: Black Swan

I’d give this book two stars. The book has some interesting insights, but it is unnecessarily long with a lot of anecdotes, name-dropping and less-known examples. Basically, the idea could have been wrapped up in 20-50 pages. Plus, the flow could have been much easier to follow.

In short, Black Swan talks about the great impact of the outliers, unpredictable events that happen in our life. For instance, if a person somehow were involved in a car accident through no fault of his or her own, the person’s life would be turned upside down. As Black Swans are not predictable, the author urged us not to use the past to predict the future. Yet, it seems that we are prone to doing exactly that, using data from the past to predict the future. I believed he claimed that we humans were victims of asymmetry in understanding random events. He also claimed that there were no experts in a lot of fields.

The thesis of the book seems obvious, but we don’t always have it in mind. As human beings, we love to predict the future and know what is going to happen years from now. I am always astonished by the popularity of fortune-telling. It amazes me how those fortune tellers could see the future. It simply seems impossible to me. Even if they could, why would they agree to earn modest income from that profession? Wouldn’t it be much more lucrative to gamble or pick stocks?

Regarding business, who could have predicted in 2000 that Yahoo would be what it is today? Or Nokia, one of the biggest brands in the world in 2005, would be a shell of its former self today? Or Kodak and more recently Facebook? I agree with him that life is too uncertain to predict. We are terrible at it, yet that’s what we keep doing.

Also, I agree with him that being alive is already extraordinary. I always feel lucky enough to be born without any disabilities or sickness. There is no telling what could happen to a child in a mother’s womb. One DNA misplaced could mean a lot of consequences for the child. In an infinite universe, we are living on a speck of dust millions of years old that has gone through a lot of revolutions and unpredictable events. If we are alive, we are already Black Swans.

Book: Bad Blood

This book – Bad Blood – is an exhaustingly reported account of how Theranos lied and deceived hundreds of people, from employees and investors to the patients. The lies not only cost investors millions of dollars, but also put the patients at potential threats.

I was shocked and amazed by the lack of due diligence some companies showed in doing business with Theranos. Despite all the warning signs and delays, they kept going full force ahead with Elizabeth Theranos. Even more amazing was the list of high profile and experienced individuals such as Rupert Murdoch, Henry Kissinger, Jim Mattis, just to name a few, who bought into the lies and deception by Theranos.

I was really angry when reading about an employee taking his own life because of stress from work and another who had several years of his life, a family relationship and hundreds of thousands of dollars wasted by Theranos. In the end, I felt glad and relieved that the fraud of Theranos was put to an end.

I am highly appreciative of this kind of reporting by the author. Theranos resorted to aggressive intimidation and legal bullying to bury every threat that might expose the company in public. Yet, the author was dogged and exhaustive in his reporting. I am glad his editor and Murdoch, who had a financial interest in Theranos at the time and owned the parent company of Wall Street Journal, let the author follow the lead to the very end. In the times of relentless attacks to the press (some is justified, to be fair), this kind of reporting is much needed.

There has been a lot of pushback regarding the impact from regulations on business. Admittedly, there is certainly a lot of unnecessary red tape. However, if you read the book, without regulations, Theranos would have done a much bigger damage. Too many regulations is obviously bad and so is too fewer regulations. Don’t take the extreme. Seek for reasonable regulations.

Final thought is that don’t be evil. Theranos resorted to Non-Disclosure Agreements, top notch lawyers, surveillance, bullying and intimidation to keep quiet those who wished to reveal information on it. Nonetheless, the truth finally came out. In this age and day, access to information is frictionless and so is scrutiny. If you do something bad, it’s just a matter of time when it is revealed.

Easy read. The first half of the book may be a little bit dull, but stick with it. Around 50-60% of the book, the author switched to his investigation of Theranos. It is then more dramatic. If you are looking for a book to read and have no other prioritized books, take this one.

Book: The courage to be disliked

I spent some time thinking about what I should write first in 2019. Instead of some predictions, I decided to write a bit about the book that influenced me greatly in 2018 – The courage to be disliked. I am reading it for the second time and believe that by writing about it here, it will stick longer in my memory and can be beneficial in 2019 for those who happen to read this post. Here we go.

Avoid the victim mentality

According to the author and Alfred Adler, the psychologist and philosopher, even though we can’t change what happened in the past, our past should not dictate our happiness and future or should not be an excuse for our unhappiness. In layman’s terms, we should not have the victim mentality regarding our past or what we were born with. For instance, even if you are born in a poor family or short, it should not be the source of your unhappiness or you shouldn’t use it to say that causes your failures in life.

Adlerian psychology is a psychology of courage. Your unhappiness cannot be blamed on your past or your environment. And it isn’t that you lack competence. You just lack courage. One might say you are lacking in the courage to be happy.

One tries to get rid of one’s feeling of inferiority and keep moving forward. One’s never satisfied with one’s present situation – even if it’s just a single step, one wants to make progress. One wants to be happier. There is absolutely nothing wrong with the state of this kind of feeling of inferiority. There are; however, people who lose the courage to take a single step forward, who cannot accept the fact that the situation can be changed by making realistic efforts. People who, before even doing anything, simply give up and say things like “I’m not good enough anyway” or “Even if I tried, I wouldn’t stand a chance”.

Anger

You did not fly into a rage and then start shouting. It is solely that you got angry so that you could shout. In other words, in order to fulfill the goal of shouting, you created the emotion of anger.

In a word, anger is a tool that can be taken out as needed. It can be put away the moment the phone rings, and pulled out again after one hangs up. The mother isn’t yelling in anger she cannot control. She is simply using the anger to overpower her daughter with a loud voice and thereby assert her opinions.

Love yourself

“I’m sure that no one would want to get involved with a guy as warped as me”. I am sure you understand this already. Why do you dislike yourself? Why do you focus only on your shortcomings, and why have you decided to not start liking yourself? It’s because you are overly afraid of being disliked by other people and getting hurt in your interpersonal relationships.

A healthy feeling of inferiority is not something that comes from comparing oneself to others; it comes from one’s comparison with one’s ideal self.

Avoid the fabricated superiority complex

One makes a show of being on good terms with a powerful person. By doing that, one lets it be known that one is special. Behaviors like misrepresenting one’s work experience or excessive allegiance to particular brands of clothing are forms of giving authority and probably also have aspects of the superiority complex. In each case, it isn’t that the “I” is actually superior or special. It is only that one is making the “I” look superior by linking it to authority. In short, it’s a fabricated feeling of superiority.

There’s the kind of person who likes to boast about his achievements. Someone who clings to his past glory and is always recounting memories of the time when his light shone brightest. Those who go so far as to boast about things out loud actually have no confidence in themselves. As Adler clearly indicates, “The one who boasts does so only out of a feeling of inferiority”…those who make themselves look bigger on borrowed power are essentially living according to other people’s value systems – they are living other people’s lives.

Separation of tasks

All you can do with regard to your own life is choose the best path that you believe in. On the other hand, what kind of judgment do other people pass on that choice? That is the task of other people, and is not a matter you can do anything about.

You are worried about other people looking at you. You are worried about being judged by other people. That’s why you are constantly craving recognition from others. Now, why are you worried about other people looking at you, anyway? Adlerian psychology has an easy answer. You haven’t done the separation of tasks yet. You assume that even things that should be other people’s tasks are your own. Remember the words of the grandmother: “You’re the only one who’s worried how you look”. What other people think when they see your face – that is the task of other people and is not something you have any control over.

Those are the main lessons I picked up from the first half of the book. They really hit home with me and changed my perspective in 2018. Of course, there are many more lessons and nuances, but the above stood out for me. Others might do for you. If you find them helpful, give the book a try. You’ll likely find more interesting insights from the book which will be helpful to your growth in 2019 and beyond.

Book: The Most Important Thing: Uncommon Sense for The Thoughtful Investor

I am in the middle of the book: The Most Important Thing: Uncommon Sense for The Thoughtful Investor by Howard Marks. It looks to be a short book, but 40% in the book, I have been delighted by the concise and thoughtful insights the author shares in his words. If you are a fan of value investing or the investing philosophy made famous by Ben Graham, Warren Buffett or Charlie Munger, this book should not surprise you as many topics touched upon by Howard Marks follow the same philosophy.

One of the best lessons I have learned so far from the book is the difference between first-level thinking and second-level thinking. The goal of investing is to outperform the market and other investors. It’s not easy as information is widely accessible now, making it highly challenging to gain some insights that few others know. Nonetheless, if gained, the contrarian thinking or unpopular but correct insights will enable superior returns compared to the returns of market or other investors.

First-level thinking can be done by almost everyone. It’s “simplistic and superficial”. First-level thinkers have an opinion about the future as in “the outlook for the company is favorable, meaning the stock will go up”. Second-level thinking is deep, convoluted and complex. Second-level thinkers arrive at conclusions and forecasts that are both correct and not thought of by the consensus. But it’s hard to do so.

There are many other lessons offered in the book. I highly recommend it if you are interested in investing. After all, we can’t get rich without making money while we are sleeping, can we?

 

Must-read book on business & strategy

I just finished the book “Subscribed: Why the Subscription Model Will Be Your Company’s Future – and What to Do About It”. It is a fascinating book that explains clearly and well the importance of a customer-obsessed subscription business model nowadays.

I have been to Strategy classes at universities. The classes usually involve academic lectures and outdated case studies. Although hindsights are always great and strategies can only make sense after a while, the technological advances (cloud computing, machine learning…) have changed significantly how companies interact with customers and how customers want to be served. It is of little value to analyze what companies did 15 or 20 years ago (I used to be asked to analyze Google while it was still competing with Yahoo in 2003). The principles and theories of strategy remain the same, but the landscape under the influence of technology has changed dramatically. For instance, nobody is installing software by buying a disk any more. Software is delivered over the Internet now mostly in the subscription-based model. Lectures taught by professors at Ivy League and certificates can be accessed online at MOOC. With a small fee, guys can receive shaving blades every month. The days of having to buy hardware for IT services are over. IT is now delivered over the cloud and on the pay-as-you-go basis.

This book details the underlying factors contributing to the meteoric rise of subscriptions and what it is like to be customer-obsessed. It also discusses the ramifications of adopting subscription-based model ranging from HR, Marketing, Sales and organizational structure. It is choke full of successful subscription companies. If you are interested, you can do a separate study on each one.

I believe this book should be a must-read for college students, whether you major in business or not. If you have sometime to waste, I highly recommend it.