August Book Lust
If anyone’s read these, please write a review. My appetite for books far exceeds the time I can devote to them.
The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
Excerpts from The Washington Post’s review
Fox, a business columnist for Time, spins a fascinating historical narrative, beginning with economist Irving Fisher’s paean to markets in, alas, 1929. Postwar economists such as Paul Samuelson noticed that most investment pros do not beat the averages. This led to the one positive contribution of the efficient-market hypothesis: Jack Bogle’s invention of index funds, which mimic the performance of the stock market as a whole and keep ordinary people from wasting their money trying to beat it. Fox recognizes that true believers in the market’s efficiency suffered from a “blinkered” mindset and “tunnel vision.” Yet I think he lets them off too easily. He laments (as if it were necessary) the lack of any alternative “grand new theory” and finds that the debate has resulted in a “muddle.”
Fox concludes, “If you do come up with an idea for beating the market, you need a model that explains why everybody else isn’t already doing the same thing.” Not necessarily. Markets aren’t physics. Maybe no one model explains them. The emerging school of behavioral finance fills in many of the gaps left by the efficient marketers. Behavioral finance, which Fox discusses at length, holds that financial man — far from the perfect, mechanical trader depicted in textbooks — is a rather neurotic fellow. He follows the crowd, fails to plan ahead and often makes mistakes. To think that his every price is perfect is a remarkable error indeed.
The Ascent of Money: A Financial History of the World
Excerpts from The Washington Post’s review
The pleasure of reading Ferguson’s treatment comes partly from the clarity of his explanations of financial concepts but mostly from his pen portraits of the extravagantly gifted and flawed characters who have led money’s long rise. He shows us how far we have come since Mesopotamian moneylenders developed rudimentary accounting around 1,000 B.C. and the Medici created elements of modern banking in 14th- and 15th-century Florence. But he also weaves a long series of manias, panics and crashes into his tale. The Medici family’s surviving papers, he notes, bear scorch marks from the vengeful reformist Savonarola, who set up a Bonfire of the Vanities to destroy sinful goods and sent the Medici packing in one of the periodic reversals of fortune to hit financial leaders over the centuries.
Ferguson sketches the rollicking career of John Law: Scottish con man, killer, genius, lover and creator, in 1719-20, of one of history’s great stock market bubbles. Law effectively took control of the French national debt, substituted paper currency for gold and sold shares in the company that controlled French Louisiana. As the shares rose in price and investors borrowed against them, the volume of paper money doubled in a year, breeding inflation, speculation and the new term “millionaire” before Law’s system collapsed. From that day on, Ferguson writes, all bubbles have followed five stages:
1) Displacement, as economic change brings a chance for extraordinary profits; 2) Euphoria, as investors take advantage of the opportunity, 3) Mania, as novices, crowds and swindlers rush in; 4) Distress, as insiders see their prospects for profit declining because of the mania and start selling; and 5) Revulsion, as all stampede for the exits.
Guts: Combat, Hellraising, Cancer, Business Start-ups, and Undying Love: One American Guy’s Reckless, Lucky Life
From Publishers Weekly
Vietnam vet, cofounder of New England Monthly and a media consultant, Nylen, who died last year, shares with punchy humor and tremendous grace his tough approach to taking risks and staring down exacting bosses as well as cancer.
Cherishing such stoical role models as Don Quixote and Ulysses S. Grant (as well as his own father, who spent his prime years as a DuPont executive before a traumatic fall altered his life permanently), Nylen celebrates America’s admiration with gutsiness, and his own lifetime attempts (frequently foolish) to make the Cool Guys Hall of Fame.
The bulk of this memoir is Nylen’s facetious though moving account of his stint as an infantry officer in Vietnam in 1968, and the men he loved and lost—the ghastly experience, he assures readers, was never accurately depicted in popular movies. Shell-shocked, married after release from the army, simulating a normal person and appearing unemployable, he began his accidental career as a media ad salesman starting at Look magazine, dealing with tough bosses like Bill Dunn at U.S. News and World Report and Mike Levy at Texas Monthly before embarking on his own.
Diagnosed with colorectal cancer stage III when he was 60, he endured treatments, surgeries, pain and frequent accidents of his own making, but preserves his cheerful, frank, optimistic and ever competitive spirit in the face of mortal adversity.
*Notes: The review doesn’t mention that Nylen founded BeliefNet.com. And yes, I believe that is a set of brass balls on the cover.
Habit: The 95% of Behavior Marketers Ignore
In his first book, communications consultant-to-the-stars (Sprint, Nextel, Cisco, Nortel, TI, Motorola) and “expert in consumer behavior” Martin uses ideas from the worlds of science, technology, psychology, history, philosophy and business to demonstrate how a consumer’s unconscious controls most of his or her behavior. As a result, Martin argues, companies large and small are wasting money and energy engaging the wrong part of the brain (my emphasis added) -rather than worrying over expected behavior or ultimate satisfaction, marketers should focus on how buying habits form through simple, time-tested methods like reward and repetition.
How else would brands like Microsoft-infamously frustrating but ingrained in the culture-and Starbucks coffee-overpriced but ubiquitous (and literally addictive)-make it? In a reportorial style fit for both marketing executives and savvy consumers, Martin presents interviews with marketers, researchers and scientists that outline the principles supporting his method, delineating the executive mind from the habitual (unconscious) mind, exploring how an ideal product like the iPod targets both minds, and providing a blueprint for creating habitual buyers. Martin’s argument requires readers to suspend some long-held beliefs about consumers, but rewards them with some eye-opening perspective.
Update
A Twitter friend alerted me to this video after I tweeted the url
Another Tweep told me about Paul Krugman’s review of the book in NYT.
Books in Queue
I’m a book lush. My reading aspirations, however, always outstrip my productivity.
Here are a couple of books that have my attention. I’d love to hear from anyone who’s read them.
Cheap: The High Cost of Discount Culture
From the shuttered factories of the rust belt to the look-alike strip malls of the sun belt—and almost everywhere in between—America has been transformed by its relentless fixation on low price. This pervasive yet little examined obsession is arguably the most powerful and devastating market force of our time—the engine of globalization, outsourcing, planned obsolescence, and economic instability in an increasingly unsettled world.
“Around the world, people are being forced to reconsider the very idea of prosperity, and to ask what kind of wealth matters most and can be sustained. Cheap appears at just the right moment to enrich this discussion. This history of discounting and bargain-mania will change the way shoppers think about their next trip to the mall. As an examination of the global effects of the quest for rock-bottom prices, Cheap an important addition to arguments about America’s economic future. This is a valuable book for a troubled time.” —James Fallows, author of Postcards from Tomorrow Square
“More stuff for less!—the American recipe for material well-being. Now Ellen Ruppel Shell takes a hard look at this apparently simple notion and finds it isn’t so simple after all. Cheap pulls apart the old economic verities and subjects the glib new promises of Wall Street and globalization to scrutiny. How did we find ourselves in our current mess? Shell finds part of the answer in our confused ideas about what, exactly, is a bargain price.” —Charles C. Mann, author of 1491
To Serve God and Wal-Mart
The world’s largest corporation has grown to prominence in America’s Sun Belt—the relatively recent seat of American radical agrarian populism—and amid a feverish antagonism to corporate monopoly. In the spirit of Thomas Frank’s What’s the Matter with Kansas? historian Moreton unearths the roots of the seeming anomaly of corporate populism, in a timely and penetrating analysis that situates the rise of Wal-Mart in a postwar confluence of forces, from federal redistribution of capital favoring the rural South and West to the family values symbolized by Sam Walton’s largely white, rural, female workforce (the basis of a new economic and ideological niche), the New Christian Right’s powerful probusiness and countercultural movement of the 1970s and ’80s and its harnessing of electoral power. Giving Max Weber’s Protestant ethic something of a late-20th-century update, Moreton shows how this confluence wedded Christianity to the free market. Moreton’s erudition and clear prose elucidate much in the area of recent labor and political history, while capturing the centrality of movement cultures in the evolving face of American populism. ~ Publisher’s Weekly
