This year we were saddened by the loss of one of our nation’s great businessmen, Charlie Munger. We’ve long held the Berkshire Hathaway duo in high esteem for their midwestern candor and astute stewardship. While we try to follow their advice in many areas of our business, we are especially devoted to Charlie’s endorsement of continuous reading:
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time—none, zero. You’d be amazed at how much Warren reads—and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
In keeping with this legacy, we present the inaugural Humphreys Capital Summer Reading List. Here’s what we’re reading at the firm:
Thinking in Bets, Making Smarter Decisions When You Don’t Have All the Facts, by Annie Duke
A professional poker player with an academic background in psychology, Annie Duke details our innate resistance to distinguishing luck from skill. By understanding the biases in our thinking, we can build frameworks to guard against our predictable irrationality.
We underlined: “When I consult with executives, I sometimes start with this exercise. I ask group members to come to our first meeting with a brief description of their best and worst decisions of the previous year. I have yet to come across someone who doesn’t identify their best and worst results rather than their best and worst decisions.”
Build the Life You Want, The Art and Science of Getting Happier, by Arthur C. Brooks and Oprah Winfrey
Arthur Brooks began his professorship at Harvard University by teaching a class on the science of happiness. He weaves quantitative research with ancient wisdom to address many of our misconceptions around what happiness is and what it means to be happier.
We underlined: “The macronutrients of happiness are enjoyment, satisfaction, and purpose.”
The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness, by Morgan Housel
Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people.
We underlined: “Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works. . . The challenge for us is that no amount of studying or open-mindedness can genuinely recreate the power of fear and uncertainty.”
The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy, edited by Ryan A. Bourne
The War on Prices is a timely read given the current state of Fed-watching that would make the National Audubon Society blush. In this compilation by the CATO Institute, the authors describe the tools available to address persistent inflation, and, even more importantly, the false tools that should be left on the shelf.
We underlined: “Why does the American public hold such idiosyncratic views on inflation? The most charitable explanation is that they see inflation as synonymous with rising living expenses, rather than as a macroeconomic phenomenon of too much money chasing too few goods. So anything that they think might reduce their out-of-pocket costs or the prices of goods they buy—lower taxes, lower mortgage rates, companies keeping prices lower, unions making less aggressive wage demands—is deemed helpful for reducing inflation.”
Crucial Conversations: Tools for Talking When Stakes are High, edited by Joseph Grenny, et al.
Effective dialogue is a skill that we can all improve when we commit to both candor and kindness. The right foundation for free-flowing information must be laid before we ever sit down to talk.
We underlined: “You can measure the health of relationships, teams, and organizations by measuring the lag time between when problems are identified and when they are resolved.”
Essentialism: The Disciplined Pursuit of Less, by Greg McKeown
Greg McKeown’s Essentialism is one of those books that is worth revisiting again and again. It challenges the assumption that we can have it all and do everything, replacing it with the pursuit of the right thing, in the right way, at the right time. For our colleague Joshua, the reminder is so good that it is part of his annual (re)reading list!
We underlined: “The way of the Essentialist means living by design, not by default. Instead of making choices reactively, the Essentialist deliberately distinguishes the vital few from the trivial many, eliminates the nonessentials, and then removes obstacles so the essential things have clear, smooth passage. In other words, Essentialism is a disciplined, systematic approach for determining where our highest point of contribution lies, then making execution of those things almost effortless.”
Poor Charlie’s Almanack, The Essential Wit and Wisdom of Charles T. Munger, edited by Peter D. Kaufman
Of course, this list would not be complete without the recently updated edition of eleven talks given by Warren Buffett’s “abominable no-man.” Munger’s insights are grounded in timeless truths and expanded on with his characteristic wit.
We underlined: “There is an old two-part rule that often works wonders in business, science, and elsewhere: 1. Take a simple, basic idea, and 2. Take it very seriously.”
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