Read Widely

Before going into the article, something personally important. I’m studying for a Graduate’s Degree in Finance and Economics, in Boston. I’m about to start my second semester and, when the third one begins, in January, I’ll be legally allowed to do an internship. I’m looking for an asset management firm that might be looking for someone that performs equity research, preferably in Boston or New York. If you happen to know of anything, I’d be really grateful if you let me know.

E-mail: giulianomana@0to1stockmarket.com

Article

Last two months have been intellectually wild. We went over what I consider to be my investment philosophy, multiple concepts and thinkers, mainly Thiel and Christensen, eight earnings review, and Zoetis entire research is almost done. The second part will be published on Wednesday and the third in two weeks. Meanwhile, I read 15 books, after which I lowered the intensity to not explode.

I started writing this article with the intention of covering more of Clayton’s ideas, but there’s a topic that hasn’t left my mind for several months. Every time I watch interviews or read about great and wise investors, they are asked for advice. Almost always, their answer goes in the line of curiosity, reading widely and multidisciplinary mental models.

However, every time I ask people what their favorite books are, it’s always a mixture of 2 or 3 finance books. There’s nothing wrong with this, but I do not see it as a way to follow great investors’ advice. Given the complexity of the task, a single set of tools might not be enough to excel. There is a case to be made on why is reading widely the way to go, but I’ll leave it for a future write up. In this one, I’ll provide you with what I believe are 3 view-changing books. Here’s my Goodreads, for interested.

Notes from Underground / The Brothers Karamazov

Dostoevsky… the most profound thinker I’ve come across. It’s not even close. I believe ideas/concepts have some sort of categorization or classification according to their depth. The more difficult it results to even think about them, the higher their complexity and depth degree, with perhaps things like truth, religion, suffering, freedom being at the outer circle. Through his literature, Fyodor gets to articulate at the very edge of human capacity. It’s unbelievable. And, because he is a writer and not a philosopher, he is not restricted by logic and framing in his writing. With characters’ actions, he gets to reach heights philosophers cannot.

“[Dostoevsky is] the only psychologist from whom I have anything to learn” Nietzsche

Psychology and human nature resonate a lot as worth-studying topics in today’s investment world. Probably a merit of Buffett, Graham and Munger, before whom I don’t think these subjects were considered relevant. But I feel we -the investment community- restrain both areas to only a few things, like biases.

We are complex beings. Dostoevsky, even if a dangerous thinker, allowed me to meditate over truly fundamental things, which puts everything else into perspective and helped me improve the lenses through which I learn about finance. Getting to know one-self should for sure prove rewarding and I don’t think it can be achieved if we don’t go beyond ‘superficial threads’.

The Interpretation of Dreams

Sigmund Freud, father of parapsychology, was probably the first person to ever get a grasp of our mind’s functioning. What’s interesting from this book recommendation is that I only read a third of it. It was a point in which I also had to slow down and decided to call it off. Nonetheless, it might be the read from which I extracted the most amount of insights per pages read ever. The Interpretation of Dreams is a compendium of Freud’s research of dreams, which he leverages to state his theory of the unconscious.

This book allowed me to close a conceptual door that had been open for a long time. I read a lot and absorb as much information as possible. Interestingly, I noticed my conscious mind discards 95% of absorbed information, for which I always struggle to even talk about a book I might have read the previous week. However, I remember two crucial dreams Freud studied which helped me (I’m paraphrasing and inventing a lot here probably):

• John, 50-60 years old, had a dream about the construction of a bridge and a person named David appeared in it. He went to see Freud and told him about this. Freud asked him if he knew Hector and the patient said he did not, though Sigmund asked him to do some research. John then asked the lady that had worked for his family ever since he was born. The lady told him there was a David that worked with his father when he was constructing a bridge. At the moment, John, the patient, was 5.

• Delboeuf woke up and remembered having dreamt with ‘Asplenium ruta muralis’, a plant which, in his dream, he had no idea how he got to its latin name. Sixteen years later, he opened a herbarium one of his relatives had and saw right there ‘Asplenium ruta muralis’, with his own handwriting at its side. He suddenly remembered that, two years before the dream, he offered to write, under the dictation of a botanist, the latin name for some plants.

I found the extract for the second dream (much crazier than I remembered):

Source: The Interpretation of Dreams

Both dreams give show of how much does the unconscious mind remember. Compounding knowledge works in the shadows. Both things calmed me in the sense that I now know that, at a deep level, most of this ‘lost’ information is still involved in my thinking and decision-making process.

Personal commentary

I’m betting my life on Munger’s multidisciplinary approach. Deviation from financial literature seems objectively relevant for becoming a better investor. It’s difficult sometimes to spot the thread, but I trust that, eventually, the dots will be magically connected in a most-likely ‘obvious’ fashion. Anyway, hope you enjoyed this unusual article.