Good Reading -- August 2021
A selection of great books, articles, and essays
Facts and Figures
~25 to ~75 — the number of IPOs per quarter since 2016.
365 — the number of IPOs in the first quarter of 2021. (Source: FactSet)
Quoted
“I’m kind of your standard alcoholic. One is too many, and there’s never enough,” he says. He became similarly obsessive about trading. “Trading options was addictive, like cocaine. It was instant gratification,” he says. “I was doing 30-day expiries. I would know whether I was going to make a 100 percent gain in 30 days. I would watch it, watch it, watch it. And if it went up to 100 percent after three days, I would sell it. But you have to be on top of it, and there’s a lot of adrenaline that is kicked in. And that’s very addictive.” — How Millennial Investors Lost
Millions on Bill Ackman’s SPAC
Books
Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life — This is a collection of biographical profiles written by William Green. The biographical profiles are interesting but the details make the book. (Thank you to John M. for the gift!)
The Science of Can and Can’t: A Physicists’s Journey Through the Land of Counterfactuals — This book has some really cool ideas, namely that science is being held back not by the lack of facts about what is (the actual), but about what could be (the counterfactual).
Genghis Khan and the Making of the Modern World — I can’t remember who recommended this book, but I really enjoyed it. The research and writing are impressive, and the premise is sound: Genghis Khan is a key historical figure about whom I knew very little. The details and history are fascinating.
Articles
Snapshot USA — Roger Lowenstein has a new Substack and it features his special talent for explaining all matters business and financial with exceptional writing. Highly recommended.
The Rise and Fall of an American Tech Giant — Great corporate history of Eastman Kodak.
Attack of the Superweeds — Interesting article about the so-called “pesticide treadmill.” I don’t know enough to discern between the implications being interesting or terrifying.
How Millennial Investors Lost Millions on Bill Ackman’s SPAC — As shown in the quote above, this article does a pretty good job of capturing the zeitgeist of this market.
After a quake, crawling out alive won’t be enough — This recent op-ed by Lucy Jones (see her for a prior note about her excellent book) is very good. She’s a world-renowned seismologist, but she’s also a very smart and effective communicator. The best way to influence people and policymakers isn’t just to preach about the dangers inherent in unpredictable but inevitable disasters; it’s to make clear the impacts and explain the why. In this case, the economic impacts are staggering and often overlooked, and it makes sense to focus on the incentives.
The need for “functional recovery” rather than merely “life safety” building codes has been recognized for some time. The 6.3 magnitude 2011 Christchurch earthquake in New Zealand, where buildings were constructed to the same standards and with much the same techniques as California, showed the problem. No one there died in a modern building, yet 1,800 structures had to be torn down. Christchurch recovered because more than 90% of its buildings were covered by earthquake insurance. We know from state insurance data that fewer than 20% of our buildings have that protection.
We will save more money in the long run than we will have to spend up front because building stronger does not cost that much more — functional recovery standards are estimated to add only 1% to 2% in building costs, a fraction of the cost of rebuilding after a total loss. But until the code requires all projects to meet that standard, most builders won’t make the investment. After all, they sell the building and the future losses are someone else’s problem.
How Trader’s Joe’s $2 wine became a best-seller — Wow, there are some lines in this story. A partial sampling:
“We buy wineries from guys from Stanford who go bankrupt,” [Frank Franzia] later boasted. “Some real dumb-asses from there.”
Fred Franzia did not share Shaw’s air d’élégance. He was unrefined and heavyset, with a body shape the New Yorkerlikened to a “gourmet marshmallow.” Reclusive and gruff, he shied away from public appearances. He referred to winemakers as “bozos” and didn’t care for France.
“People went apeshit,” Keith Wallace, a wine expert, told Thrillist. “It was the ‘Macarena’ of wine… And it was this blue-collar pride thing. People thought, ‘This bottle is just as good as one that’s $20. Screw those snobs.’”