The Best Books of 2014

Anyone that reads this site knows I am a book nut. I read about one hundred books this year, and thought it would be fun to share the best of them. You can also get 3-4 of my favorite books each month by signing up over here (added bonus, I have a holiday offer going out in the next few days for my book Millennial Money, and subscribers will get the first crack at the biggest offer). Here are my favorite books, along with a favorite passage from each.

Security Analysis, Sixth Edition by Ben Graham and David Dodd

Confession: until this year I had not read this book cover to cover. That is like a devout Catholic saying he’s never finished reading the bible. It is long, nuanced, and sometimes behind the times–but there is so much useful information in this book, it really should be required reading. The sixth edition has commentaries from huge names like Seth Klarman and Howard Marks, and I would have paid full price for the Klarman section alone. Make sure to read those great commentaries. Here is Klarman, on the durability of the value investing strategy:

Because our nation’s founders could not foresee—and knew they could not foresee—technological, social, cultural, and economic changes that the future would bring, they wrote a flexible constitution that still guides us over two centuries later. Similarly, Benjamin Graham and David Dodd acknowledged that they could not anticipate the business, economic, technological, and competitive changes that would sweep through the investment world over the ensuing years. But they, too, wrote a flexible treatise that provides us with the tools to function in an investment landscape that was destined—and remains destined—to undergo profound and unpredictable change.

Scientific Advertising by Claude C. Hopkins,

The Robert Collier Letter Book by Robert Collier,

Split-Second Persuasion: The Ancient Art and New Science of Changing Minds by Kevin Dutton,

and Ogilvy on Advertising by David Ogilvy

My side project this year was books on persuasion, influence, and sales. I believe that effective communication is essential in the investing business, and wanted to understand the principles behind swaying people’s opinion and getting them to take action. What I learned above all else is that people only care about something if there is something in it for them. Write about yourself, by all means, but only do so if your story is a metaphor for the reader’s own experience. I got a huge response from a story about my start in the investing business because so many others had gone through the same thing and loved to talk about it.

These four books were my favorite, offering diverse and useful principles for communicating well and selling people on your ideas.

Here is Robert Collier:

It matters not whether you are trying to sell him a rain-coat, making him a proposal of marriage, or asking him to pay a bill. In each case, you want him to do something for you. Why should he? Only because of the hope that the doing of it will bring him nearer his heart’s desire, or the fear that his failure to do it will remove that heart’s desire farther from him… Appeal to the reason, by all means. Give people a logical excuse for buying that they can tell to their friends and use to salve their own consciences. But if you want to sell goods, if you want action of any kind, base your real urge upon some primary emotion!

Zero to One by Peter Thiel

Technology, says Thiel, is defined as doing more with less. I loved the thought provoking nature of this concise book. It encourages contrarian thinking, which is a powerful force. The simple exercise of asking oneself “how can I make something ten times better” has led to some interesting results for me personally (a few huge projects in the works as a result, more on that to come).

The best place to look for secrets is where no one else is looking. Most people think only in terms of what they’ve been taught; schooling itself aims to impart conventional wisdom. So you might ask: are there any fields that matter but haven’t been standardized and institutionalized? Physics, for example, is a real major at all major universities, and it’s set in its ways. The opposite of physics might be astrology, but astrology doesn’t matter. What about something like nutrition? Nutrition matters for everybody, but you can’t major in it at Harvard. Most top scientists go into other fields. Most of the big studies were done 30 or 40 years ago, and most are seriously flawed. The food pyramid that told us to eat low fat and enormous amounts of grains was probably more a product of lobbying by Big Food than real science; its chief impact has been to aggravate our obesity epidemic. There’s plenty more to learn: we know more about the physics of faraway stars than we know about human nutrition. It won’t be easy, but it’s not obviously impossible: exactly the kind of field that could yield secrets.

Monsters: The 1985 Chicago Bears and the Wild Heart of Football by Rich Cohen. If you like football, this is the book for you. it is jam packed with incredible characters, stories, history, and factoids. I read it in one sitting. I loved this passage about a Bears player skipping warm-ups to stand in the middle of the field and just stare at the opposing team:

Not long ago, McMichael told Chicago interviewer Mark Bazer that he’d been playing a role in those years, a character named Mongo. “I’d go stand at the fifty-yard line and stare at the other team before the game,” he explained. “I wouldn’t warm up with the guys. I would just stand and stare. Wade Wilson, a quarterback from that time, looked me up at a convention. The first thing he said was, ‘Steve, do you remember me?’ I said, ‘I remember you, quarterback. I’m like a vicious predator on the Serengeti. I remember all the wounded gazelles.

Waking Up: A Guide to Spirituality Without Religion by Sam Harris

Harris is a controversial figure, but this book was a breath of fresh air. It explores happiness, meditation, and the mind in a thoughtful and useful narrative. I don’t know how he does it, but somehow Harris fills the book with passages like this:

It is possible, however, if not actually plausible, to seize this evidence from the other end and argue, as Aldous Huxley did in his classic The Doors of Perception, that the primary function of the brain may be eliminative: Its purpose may be to prevent a transpersonal dimension of mind from flooding consciousness, thereby allowing apes like ourselves to make their way in the world without being dazzled at every step by visionary phenomena that are irrelevant to their physical survival. Huxley thought of the brain as a kind of “reducing valve” for “Mind at Large.” In fact, the idea that the brain is a filter rather than the origin of mind goes back at least as far as Henri Bergson and William James. In Huxley’s view, this would explain the efficacy of psychedelics: They may simply be a material means of opening the tap.

The Prize and The Quest, by Daniel Yergin

The history of oil, told in The Prize and the first section of The Quest, is the most entertaining real story I’ve ever read. These books take a while, and are filled with detail, but you will walk away astonished.

It was called “Seneca Oil” after the local Indians and in honor of their chief, Red Jacket, who had supposedly imparted its healing secrets to the white man. One purveyor of Seneca Oil advertised its “wonderful curative powers” in a poem: The Healthful balm, from Nature’s secret spring, The bloom of health, and life, to man will bring; As from her depths the magic liquid flows, To calm our sufferings, and assuage our woes.

The River of Doubt: Theodore Roosevelt’s Darkest Journey by Candice Millard

A fast read and a remarkable story of endurance. I am obsessed with explorers of all kinds, people who go it alone and figure things out for themselves. Roosevelt was an explorer:

“The ordinary traveller, who never goes off the beaten route and who on this beaten route is carried by others, without himself doing anything or risking anything, does not need to show much more initiative and intelligence than an express package,” Roosevelt sneered. “He does nothing; others do all the work, show all the forethought, take all the risk—and are entitled to all the credit. He and his valise are carried in practically the same fashion; and for each the achievement stands about on the same plane.”

No Boundary: Eastern and Western Approaches to Personal Growth by Ken Wilber

This book really struck a chord with me. The core idea of breaking down boundaries (dualities) was brilliant. Here are a few passages:

Not knowing how near Truth is, People seek it far away—what a pity! They are like he who, in the midst of water, Cries in thirst so imploringly.

Most of our “problems of living,” then, are based on the illusion that the opposites can and should be separated and isolated from one another. But since all opposites are actually aspects of one underlying reality, this is like trying to totally separate the two ends of a single rubber band. All you can do is pull harder and harder—until something violently snaps. Thus we might be able to understand that, in all the mystical traditions the world over, one who sees through the illusion of the opposites is called “liberated.” Because he is “freed from the pairs” of opposites, he is freed in this life from the fundamentally nonsensical problems and conflicts involved in the war of opposites.

As Wei Wu Wei put it: Why are you unhappy? Because 99.9 percent Of everything you think, and Of everything you do, Is for yourself— And there isn’t one.

Only parts suffer, not the Whole. And this realization, when stated “negatively” by the mystics, says, “You are released from suffering when you realize the part is an illusion—there is no separate self to suffer.” When stated “positively,” it says, “You are always the Whole, which knows only freedom, release, and radiance. To realize the Whole is to escape the fate of a part, which is only suffering, pain, and death.”

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

Such a fun book about the future. Automation is eating the world, and the economic landscape is changing fast. What skill will remain valuable? The authors explore this and many other questions in detail.

Rapid and accelerating digitization is likely to bring economic rather than environmental disruption, stemming from the fact that as computers get more powerful, companies have less need for some kinds of workers. Technological progress is going to leave behind some people, perhaps even a lot of people, as it races ahead. As we’ll demonstrate, there’s never been a better time to be a worker with special skills or the right education, because these people can use technology to create and capture value. However, there’s never been a worse time to be a worker with only ‘ordinary’ skills and abilities to offer, because computers, robots, and other digital technologies are acquiring these skills and abilities at an extraordinary rate.

Those were my favorites this year, but it was a great year over all. You can find others that I have recommended here and signup to receive more each month here. Be on the lookout for my upcoming holiday offers for Millennial Money, and have a great holiday season.