The Books of 2016: A Complete List and Recommendations

A full list of the books I completed in 2016 is to the right. "Brain Maker" has changed my life more than any other book: my whole family now takes daily probiotic supplements, and I now avoid gluten and sugar like the plague. "Concussion" was a close second: I stopped watching American football to prevent my son from being drawn to play the game when he is older. 

My favorite books I completed in 2016 were "Made in America," "Shoe Dogs," "When I Stop Talking You Know I am Dead," "The Hiltons" and "Titan." Apple’s late Steve Jobs may be the most famous CEO in modern America, but the founding stories of Wal-Mart and Nike are equally entrepreneurial and highly entertaining. Jerry Weintraub’s book shared the life of a businessman who built not a company but careers and legendary performances; unfortunately, the late Weintraub stopped talking in 2016, but we are lucky to have his biography as an account of his adventures with Elvis, Sinatra, Clooney, and Pitt. "The Hiltons" was another incredible book about how Conrad Hilton influenced the travel and hospitality industries like Steve Jobs revolutionized the telephone industry. "Titan" regaled the life of John D. Rockefeller whose mastery of self-control enabled him to become the greatest business leader of all.

The epic biographies of great American leaders provided context which helped me better understand the 2016 election and other modern events. Twitter rants seem less important when you consider the turmoil Adams, Hamilton, Jefferson, Roosevelt, Einstein, and Truman faced. "Unbroken" was an inspirational story of a heroic life.

"Sapiens" and "The Story of the Human Body" illustrated my role on Earth beyond our society and the precipitous impact humans have had on the world. The perspective attained from these books motivate me to avoid afflictions from the discrepancies between contemporary life and the lives humans evolved to live over millions of years and thousands of generations.

Thanks to other books listed to the right I better understand contemporary leaders from Musk to Putin to the founders of 3G Capital. I have had a look into the fascinating lives of Willy Nelson, Amy Poehler, John Stewart, and David Spade. Should I purposely withhold praise from my children? It seems Michael Jordan’s determination derives from his father’s tendency to exult Michael’s brother and overlook Michael's accomplishments.

"Getting to Yes with Yourself" may have been the most useful book on the list because it helped refocus my energy on my effort and what I can control. Moreover, it framed my mindset and complemented many parenting books that I completed. Yes, "Getting to Yes with Yourself" is listed twice, but it was as useful in November as it was in March. Plus I read "A Dance with Dragons" and "Game of Thrones" for a third and fourth time, respectfully, and those made the list, too.

Each of these titles deserves a unique blog post, but I promise to be a more diligent blogger in summarizing the books completed in 2017. You are resigned to settle for my recommendations (the books highlighted with a yellow background).

100 Books in 2016

The Pitfalls of Completing 100 Books

I finished my 100th book on December 31; if I had not been in the Central Time Zone, it would have been on January 1st. While 2016 was a year of growth and I learned a great deal, my pursuit of the arbitrary goal, 100 Books in 2016, kept me from learning all I could learn from the books I had listened to and read.

I learn best by writing. I make bookmarks while reading or listening then return to the bookmarks to make notes after I have finished the book. A more important goal for 2017 is to write a blog entry for every book I have finished.  As I type this quick entry, I have just finished a biography on President Grant and have begun a draft of a blog post to summarize what I have learned. By formulating coherent thoughts about the book I have learned more about Grant’s role in shaping our nation, and will be more able to apply the lessons to my investment process.

In 2017, while I will strive to read many books, my focus on the quality of knowledge attained and my retention of this knowledge.

Book 74: Shoe Dogs by Phil Knight

As the co-founder of Apple Computer, Steve Jobs' entrepreneurial efforts earned praise and fame, but the founder of another iconic American company, which became publically traded within months of Apple's IPO, was also a scrappy underdog that shaped the face of his industry. In "Shoe Dogs" Nike founder Phil Knight describes his journey from selling shoes out of his car at track meets to creating the most iconic footwear and apparel company in the world. Jobs may have started in a friend's garage, but Knight began in his parents' basement.

After Stanford business school, the future shoe mogul was determined to bring an MBA research project to life and embarked on a bold journey to Japan. Knight networked his way into a meeting with a shoe manufacturer and deftly negotiated the right to import and distribute Onitsuka Tiger running shoes to America. 

The combination of Knight's passion for running and attractive exchange rates propelled the young entrepreneur's venture from the basement to earn the sole right to distribute Tigers in America. Shoe Dogs proceeds to describe Knight's struggle to obtain funding, the tribulations of vertical integration, and the counterculture that fueled Nike's evolution. Knight, the quintessential iconoclast, and Nike broke all the rules and shaped the athletic footwear and apparel industries.

As an investor, finding the next Nike is the dream. Unfortunately, finding the next Nike may be easier than holding the next Nike. In the past few weeks I have liquidated five positions in our family portfolio. Though primarily motivated to offset gains incurred through portfolio rebalancing, several liquidated positions have the potential to be the next Nike. It is easy to sell when companies underperform. Approaching the end of 2016, Nike currently trades 20% below its all-time high (set roughly one year ago); over the same period, Vanguard's S&P500 index fund (VFINX) appreciated by 2%.

Or consider the success of Job's Apple Computer. Apple has had remarkable success since the introduction of the iPhone (Apple is currently $50 billion more valuable than the second most valuable company in the world, Alphabet). But it would have been difficult to hold Apple's stock from its IPO date in 1980 through an almost twenty year period during which compounding annual returns stagnated at roughly 3%.

Shoe Dogs provides a first-hand account of the difficult path to success. Patience and diligence, and sometimes luck, are necessary to realize the outsized returns experienced by Nike's long-term shareholders. Knight's story reminds us superior investment returns must be earned, even by passive investors. 

Book 73: The Millionaire Next Door

Complaining about books is not something I often do. This book was brutal to read. While the idea behind the book is interesting, the book beats the topic to death through excessive repetition. If you struggle to sleep and often lie awake at night buy the Amazon Kindle version of this book and read it on your glare-free, e-ink Kindle and you will be dreaming in no time (I did this for months).

With that kill-joy of a disclaimer out of the way, this book could have been condensed in to a few paragraphs that describe how wealth is created: investing a large portion of your income. By investing in their private enterprises and forgoing consumption like John D. Rockefeller and Sam Walton became two of the Wealthiest people to ever live. Both titans of industry were remarkably frugal. In "The Millionaire Next Door" (TMND), authors Thomas Stanley and William Danko assert most self-made millionaires are also frugal by nature.

The concept is simple math. Wealth accumulates and grows in an exponential function (read: the more money - capital - you have, the faster it will grow). If you save (invest) a greater portion of your income, your wealth will grow faster.Stanley and Danko provide countless (and altogether too many) examples of people who save and invest and other examples of people who spend too much to generate vast wealth. 

A useful discussion, also beat to death by TMND, was the relationship between a person's savings rate and their parents' wealth. Children often inherit a standard of living from their parents. If parents earn much higher incomes than their children, and the children assume a similar standard of living the children must then assume a much lower savings/investing rate. Stanley and Danko proceed cite examples of wealthy parents that subsidize their children’s lifestyle.

Two important lessons can be drawn from TMND. First: to achieve financial independence we must prioritize investing over consumption. Pay yourself first and build your capital base before you treat yourself to fancy clothes or expensive vacations. Second: instead of passing along our standard of living to our children we must focus on teaching them to invest and generate their own capital to grow.

Compelling People: The Hidden Qualities That Make Us Influential

Social conventions tend to hold strong men and women with a warm personality in high regard. In fact, even in general conversation, unless some one is competent, strong, regarding the subject matter and on our side, warm, we do not even listen to what they are saying. In "Compelling People," author, John Neffinger describes how to understand and utilize this phenomenon.

Identify how to connect emotionally

What about their circumstance makes them feel the way they do.

Find a way to empathize with them.

Your audience wants to know you feel the same way you do. Be empathetic.

Michael Jordan: The Life

Book 71 was Roland Lazenby's Michael Jordan: The Life

Michael Jordan's hatred for losing would not have been developed through today's AAU system of youth basketball. Today there are too many games, AAU's structure allows top players to play three games a day and many games each week; there is no time to reflect on each loss. Michael Jordan was an incredibly competitve player whose hatred for losing set him apart from other players.

Delores Jordan: work hard, achieve, set goals, don't be denied, be considerate, don't dwell on race.

Larry Jordan: It did not bother me to watch his success; I had the opportunity to see him grow; I got to see how hard he worked.

Michael's talisman was the diamond-hard disappointment he would wear around his neck.

Michael Jordan told UNC coaches he planned to take a break from basketball after the NCAA tournament loss during his sophomore season. When they found him in the gym the next day he just said, "I've got to get better."

Jordan did not take to embarrassment well, but he put up with Knight's coaching style to win a gold medal. As a young boy Jordan promised his mother he would avenge the U.S. loss to Russia. Jordan realized he'd have to overcome Knight to achieve that goal.

As an NBA rookie Jordan worked so hard in practice veteran players had to increase their own intensity to avoid being embarrassed by Jordan.

Jordan kept a close group of friends around him to shelter himself from outsiders. If he did not have his own cocoon, Jordan may not have been able to deal with the fame, and may never have been so successful.

The golf course provided solitude. Jordan could get away from the spotlight to be like anyone else.

If Jordan didn't think an injury/illness would hurt him he would just focus past it and play.

Reality and Jordan's competitive mind often inhabited parallel universes. When ever he needed to stoke his fire, Jordan would conjure up something to produce the heat. The people around him had difficulty distinguishing real from imagined.

Everything he did he had to think: How will this be perceived.

"I always liked practice," Jordan said, "and I hate to miss it." 

Time in baseball allowed Jordan his desire to work hard.

Jordan did not need rest like other players. Over the course of the season players would need to take time off, but Jordan would ridicule and cajole his teammates. 

Basketball is a game of habits. Jordan and Pippen knew the fundamentals would be their true legacy. It set the apart from other teams.

The Hiltons

Who is the most interesting Hilton? Not Paris. Not her sister, Nicky. Conrad is by far the most intriguing Hilton of the family - and he threw the best parties, too.

Book number 70 in 2016, "The Hiltons: A Family Dynasty" by J. Randy Taraborrelli,  detailed the fascinating life and legacy of hotelier Conrad Nicholson Hilton. En route to developing the world's largest hotel brand, Conrad Hilton's tenacious, unrelenting nature and visionary leadership brought Hilton from borrowing $35,000 of the $40,000 for the purchase his first hotel to becoming "America's father," a model for every American to follow, during the Red Scare and McCarthy witch hunts. Hilton delivered hotel innovations such as televisions and air conditioning in every room. American travel abroad was facilitated by Hilton's expansion to Egypt, Puerto Rico, and other international locations because a Hilton hotel provided a little piece of America abroad. Conrad Hilton's determination and success led his family members striving for his approval in all their endeavors. 

When you next experience modern media write off Paris Hilton as a hotel heiress, realize is critique is either misinformed or short-sighted: Paris Hilton is heiress not to a great financial fortune, but to the opportunistic, determined personality traits that built a great financial fortune through excellent branding and marketing skills. Conrad Hilton made his name synonymous with the hotel industry by building the most lavish hotels and throwing the most grand parties to celebrate them. The Hilton progeny have used similar tactics to become successful business people in their own right, but ever since Conrad built his empire every Hilton has been expected to make their own way in the world - no Hilton has received a grand inheritance. 

As an investor, this book inspired me to forge my own path - as opposed to following the mainstream media or investing commentary. Conrad Hilton built his empire by striking his own path; I will build my own portfolio by being my own best advisor. Investing media, news letters, and financial advisors may be helpful, but only I can truly know the best investing decison for my portfolio.

How to Finish 13 Books in 11 Days

From August 21st through September 1st I finished 13 books, but I only read one. I listened to all twelve books, usually at twice normal speed. Peter Drucker stressed the importance of self-assessment and understanding how you learn most effectively. I learn best by listening and taking notes, so when I have menial tasks (like cooking, cleaning, or driving half-way across the continent) I double time audiobooks of all types.

On my recent trip to Wisconsin to celebrate my grandmother's 92nd birthday, I downloaded as many audiobooks as would fit on my device's hard drive, cranked the speed to double-time and learned about topics from life in prison (Orange is the New Black) to a daring 1914 Antartic expedition (Endurance); I learned about the hotel underworld from the perspective of front desk agent (Heads in Beds) and the lived vicariously as a Navy SEAL sniper (American Sniper). 

You may wonder how this diverse group of books may help me become a better investor. You may question: "why don't you buy the Intelligent Investor audiobook, or chew up miles while delved into a book by Peter Lynch?" Reading (or listening) broadly provides context for a lifetime of investing. Though financial analysis is a necessary component of investing, less quantifiable aspects of investing, like understanding brand power or the strength of customer, relationships are just as important. By listening to Kitchen Confidential I gained a better understanding of the fickle nature of the restaurant business and I am a better investor for it.

Rockefeller, Putin, and What Makes us Human

What do John D. Rockefeller and Vladimir Putin have in common? The biographies of these polar opposites provide compelling case studies for Yuval Noah Harari’s book titled Sapiens: A Brief History of Humankind (the 47th book I have finished this year). Harari explains how humans went from insignificant apes to rulers of the world by harnessing abstract ideas to achieve common goals through flexible cooperation.

Abstract ideas like religion, feudalism, socialism, capitalism and even nationalism enable large populations of humans to work toward common goals and live within complex social structures. Christians waged holy crusades in the name of their religion; serfs and commoners lived in quasi-slavery to their feudal lords; the lives of millions of Chinese and Soviets were subject to live under the strict direction of central planners in socialist societies; robber barons and industry elites amass wealth disproportional to their typical employees in capitalist economies; and protectionist policies impair trade and economic mobility. Without the ability to rally around abstract ideas the growth of human societies would be limited to a few hundred individuals – no better than common apes.

Rockefeller was a strictly devout Baptist whose troubled childhood led him to crave financial security (Ron Chernow’s biography Titan: The Life of John D. Rockefeller, Sr. was book 49). As his fortune grew, Rockefeller believed he was blessed with a god-given ability to earn money, and, therefore, his duty was to do god’s will through the charitable distribution of his fortune. A model of self-control, Rockefeller rationalized his unscrupulous business tactics as a means to accumulate wealth for benevolent distribution.

Putin is humanized as a child of the Cold War in The New Tsar The Rise and Reign of Vladimir Putin by Steven Lee Myers (book 48). This biography describes how his Spartan childhood and pedestrian career as a young KGB officer Putin have developed exaggerated priorities on loyalty, political stability, and national pride.  Since his first term as Russian President, Putin has made audacious changes to the Russian government and bought the loyalty of his supporters by selling control of the Russian economy. Most dangerously, Putin has manipulated the Russian people through nationalist rhetoric and posturing. Putin has restored national pride through confrontation with western leaders and nationalist displays, like the ostentatious Sochi Olympics.

Rockefeller and Putin are two of the most prominent figures of their times, and each was driven by abstract ideas. Putin’s story is still evolving, but Myers believes Russia will be left with a power vacuum after Putin reign; without Putin’s iron grasp on the nation Russia may fall into chaos as competing factions attempt to fill the void. Rockefeller’s trusts were disbanded, but his legacy persists despite his fierce denial of wrong-doing. Ultimately history views the Titan as a revolutionary captain of industry whose innovations transformed the American economy, but Rockefeller is better known for his illicit business practices than his charity.

 As investors and in all aspects of our lives we should understand which abstract ideas drive our own logic and actions. How have abstract ideas led us to develop biases that may cloud our judgement? Investing is difficult without considering the biases that may inhibit an investor’s thought process. If we are able to separate previously unperceived biases from objective truths by searching for the abstract ideas that shape our lives, we will better understand the risks and limitations to our investment decisions.

Book #46: Alexander Hamilton by Ron Chernow

During today's run, I finished the biography that inspired the Toni Award winning musical "Hamilton".  Hamilton's life is an amazing story. Born of uncertain parentage in the West Indies and orphaned at a young age, Hamilton was an impressive youth who worked for his late mother's landlord. A group of local merchants raised a collection to send the prodigy to New York to study at King's College (now Columbia University).

Hamilton arrived in New York as political tension grew into revolution, and soon joined the revolutionary cause with his fellow students on principle and to distinguish himself. Once he proved his worth as a captain of an artillery company, Hamilton became an irreplaceable aid to General Washington. Hamilton was Washington's most valuable aid during the war and, later, his most trusted advisor as the new American nation was born. 

During their service in the Continental Army Hamilton and Washington suffered through the fledgling days of the first American government; the loosely bound former colonies struggled to fund the army, and both men became advocates of a strong national government with the maintain a military force sufficient to defend itself from foreign powers. To this end, Hamilton  promoted a strong executive government branch - a position construed by political opponents to declare Hamilton a monarchist. 

Once the constitution for the new government was drafted and signed Washington chose Hamilton as the first Treasury Secretary. As one of the new nation's most powerful government officials Hamilton promoted banking, trade with Britain, and a large standing army. Hamilton's work set the foundation for many of the government's policies and institutions. 

Though Hamilton earned renown for his political contributions he did not have a vast estate or family fortune. Before and after his tenure as Treasury Secretary Hamilton maintained a well-respected law practice and was able to maintain his influence on early American politics when he returned to his legal practice.

Jeffersonian politicians organized opposition to Hamilton's centralist policies in favor of greater individual liberties and state's rights. When Jefferson and Aaron Burr, another New York lawyer, received an equal number of electoral votes for president, Hamilton used his political influence to convince several representatives to support Jefferson instead of the more dangerous Burr. After many years of opposition in the court room and in the political arena, Burr was again stymied by Hamilton during his campaign for New York's 1804 gubernatorial election. His honor iinsulted and pride wounded, Burr accused Hamilton of slander and challenged him to the lethal duel that ultimately killed Chernow's subject.

Hamilton's story is inspirational. Through hard work and dedication to his purpose Hamilton rose from the margins of society to shaping a nation. The obstacles Hamilton overcame seem insurmountable, but to achieve the acclaim he desired there was no other path. How fitting: the country known for the American Dream was perhaps most influenced by a man who achieved the American Dream.

Why I chose to read "Alexander Hamilton"

• It inspired the Toni Award winning musical "Hamilton."
• I enjoy learning about our nation's founding fathers. They overcame unbelievable adversity to create a new nation and the world's oldest democracy.
• Those who fail to understand history may be doomed to repeat it.
• The hold became available and it was my best available 

How I "read" it

• I borrowed the digital audiobook from the Toronto Public Library.