Multi-Disciplinary Reading - Book Reviews

[draveshia]

Awesome …am trying my self the same…writing note on iPhone is easier by dictating but read at night and wife doesn’t even tolerate the kindle illuminating her dreams

[Javed_Pathan]

I’m blown away by your fantastic summary! It’s a stark reminder of the immense wisdom history holds, hidden in plain sight. It’s heartbreaking to see how this subject is often relegated to dry textbooks and rote memorization, failing to capture its true essence. This lack of engagement breeds ignorance, diminishing our understanding of the present and hindering our ability to navigate the future effectively.

Another book “Lessons from History” by Will Durant resonates deeply with this feeling. That concise book packs a powerful punch, brimming with insights and lessons gleaned from the vast tapestry of time. It’s a testament to the fact that even in a small space, profound wisdom can flourish.

Perhaps, the key lies not just in presenting historical facts, but in weaving narratives that ignite curiosity and spark critical thinking.

[Apurva_Dubey]

The $12 Million Dollar Stuffed Shark by Don Thompson (2008)

Damien Hirst – a contemporary artist – is arguably the most successful artist of all time (commercially speaking), with a net worth of $1B+ (as of 2023). The interesting bit is: Hirst – of his own admission – can neither draw nor paint, instead he employs other artists who bring his concepts to life.

Steve Cohen – an astute hedge fund manager – bought Hirst’s art installation titled ‘The Physical Impossibility of Death in the Mind of Someone Living’ (which was essentially a stuffed shark in a formaldehyde tank) for $12 million. Did he buy it for its aesthetic value, or as an investment, or as a positional good? Art buying at the most expensive end is often a game played by the super-rich, with publicity and cultural distinction as the prize.

It’s a well-researched book that gives a detailed view of the art market. Among other things the book examines: who are the key players (auction houses, dealers, collectors, museums, art fairs) and what are their motivations, why is contemporary market hot now, how do auction houses operate…and most pertinently (for this group) – “is art a good investment?”

Here are my notes on the bits I found interesting (there is a lot more in the book for those interested):

1/ Contemporary art market

• “Money itself has little meaning in the upper echelons of the art world – everyone has it. What impresses is ownership of a rare and treasured work such as Jasper Johns’ 1958 White Flag.”

• Contemporary art has evolved to be the hottest segment of the art market. It has achieved its current importance in resale markets in part because the best examples of other schools of art are disappearing from the market, and are never again likely to appear for sale.

• ‘Early contemporary’ is art produced between 1945 and 1970, and post-1970 art is ‘late contemporary’; ‘Modern art’ encompasses the twentieth century up to 1970, and includes Abstract Expressionism and Pop Art. ‘Old Masters’ is art of the nineteenth century and earlier.

• For centuries, the best of the work of the past appeared regularly at private sales or at auction. Today, when an important non-contemporary work appears at auction there is a price explosion (‘Salvator Mundi’ by Leonardo Da Vinci auctioned at Christie’s for $450 million [bought by MBS] in 2017; it was marketed as ‘The Last Leonardo’)

• Two things contribute to the shrinking supply of traditional art. The first is the worldwide expansion of museums. Second is the parallel expansion of private collections. Over the past fifteen years the number of wealthy collectors has multiplied twenty times.

• There is no longer a van Gogh syndrome, where it takes years to recognize a genius. Today there are so many dealers, curators, advisors and critics checking new art that artists whose work merits attention are quickly recognized. (Story goes that van Gogh managed to sell only one of his paintings during his lifetime)

• The highest price paid for a modern work went for Jackson Pollock’s No. 5, 1948, a 4 × 8ft drip painting. It sold in 2006 for $140 million in a private transaction.

• There are about 10,000 museums, art institutions and public collections worldwide, 1,500 auction houses and about 250 annual art fairs and shows. There are 17,000 commercial galleries worldwide, 70 per cent of which are in North America and western Europe.

• The estimated value of world contemporary art sales is around $18 billion per year.

• Contemporary art shows present a good illustration of economists’ concept of a negative price: ‘What would I pay not to have to look at that every day?’

• Art professionals talk about Impressionist art in terms of boldness, depth, use of light, transparency and colour. They talk about contemporary art in terms of innovation, investment value and the artist being ‘hot’.

• De Koons produces wonderful quotes: ‘Debasement is what gives the bourgeois freedom’ and ‘Abstraction and luxury are the guard dogs of the upper class.’

2/ Branding

• In the world of contemporary art, branding can substitute for critical judgement. You are nobody in contemporary art until you have been branded.

• Collectors patronize branded dealers, bid at branded auction houses, visit branded art fairs, and seek out branded artists.

• A branded artist is one who has already passed several gatekeepers. The artist has been accepted and shown by a mainstream dealer, and moved to representation by a superstar dealer. The artist’s work has been cleverly marketed, placed in branded collections and with branded art museums. The work has appeared in evening auctions at Christie’s or Sotheby’s. It is this process, not aesthetic judgement and certainly not critical acclaim, that defines the branded hot artist.

3/ Christie’s and Sotheby’s

• In contemporary art, the greatest value-adding component comes from the branded auction houses, Christie’s and Sotheby’s. They connote status, quality and celebrity bidders with impressive wealth.

• Christie’s and Sotheby’s form a duopoly with a combined share of 80 percent of the world auction market in high-value art, and an almost absolute monopoly on works selling for over $1 million.

• Both are very profitable, owing to the higher buyer’s premium and rising sales. In 2006 Christie’s auctioned $4.3 billion worth of art and Sotheby’s auctioned art worth $3.7 billion.

• English auction is really Roman in origin. The word auction has its root in the Latin auctio, meaning to ascend, or augere, to increase.

• The terminology used by auction houses is interesting. The percentage fee that is charged a seller of art is called a commission, the term reflecting the auction house’s fiduciary duty to the seller. The fee that is charged the buyer is called a premium, the term implying that the auction house has no duty to the buyer.

• Paintings achieve status both by where they are hung, and what is hung beside them – auction houses argue that the inclusion of great pictures in their auction increases the value of less great ones.

• The guarantee offered by auction houses ensures that the auction house will pay out to the consignor (seller), even if the bidding does not reach the guarantee price. Normally the auction house asks for a fee of from 10 to 50 per cent of any price realized above the guarantee, most commonly 25 per cent.

• Most consignments from individuals reach the auction room through one or more of the four Ds: death, divorce, debt and discretion. The last of these refers to a change in collecting focus, redecorating, or profit-taking.

4/ Auction Psychology

• “Auctions are a bizarre combination of slave market, trading floor, theatre and brothel. They are rarefied entertainments where speculation, spin and trophy hunting merge as an insular caste enacts a highly structured ritual in which the codes of consumption and peerage are manipulated in plain sight.”

• A ‘chandelier bid’ is a phantom bid, acknowledged by an auctioneer who often pretends to see someone raise a paddle in the back of the room, pushing up the price in an effort to stimulate interest in a lot.

• The most common mistake of inexperienced auction bidders is that they bid and declare their interest too soon. For a desirable painting, serious bidders do not raise their paddles early on, especially before the reserve price is met.

• Each bidder starts with a top price in mind. When he becomes the high bidder, there is an ‘endowment effect’. He will pay more not to give up the painting, not to lose.

• “The loss of something one has almost owned outweighs the relief of not having overspent.”

• ‘Heaven is two Russian oligarchs bidding against each other.’ In 2006, the successful bidder for Picasso’s Dora Maar simply raised his paddle and kept waving it until everyone else quit at $95.2 million

• In the primary-art market, price creates value and buyer satisfaction rather than reflecting it. This is what economists call the Veblen effect: the satisfaction derived by the buyer comes from the art, but also from the list price or conspicuous price paid for it.

5/ Charles Saatchi

• Charles Saatchi is a central figure in contemporary art. He is the prototype of the modern branded collector. His purchases are publicized and create an instant reputation for an artist.

• The reputation and brand of the owner is as important in the market as the work being sold. A collector such as Saatchi can increase the value of an individual work, or of work by the artist, just by adding that work to his collection – or even by expressing interest in it.

6/ Fakes

• Art fakes are rife throughout the art market, but are particularly problematic for modern art. A well-known example involved Paul Gauguin’s 1885 Vase de fleurs (Lilas) which showed up for autction at both Christie’s and Sotheby’s in May 2000.

• ~40 per cent of the high-end art market is made up of forged art. There were at one time 600 Rembrandts hung in major museums around the world and another 350 in private collections when the master only created 320 paintings.

7/ Contemporary art as an investment

• Art advisors like to cite the example of Picasso’s Garçon à la pipe, purchased by John Hay Whitney in 1950 for $30,000 and sold at Sotheby’s in 2004 for $104 million (that’s CAGR of just 16%).

• In the overwhelming majority of cases, art is neither a good investment nor an efficient investment vehicle. Eighty per cent of the art will never resell for as much as the original purchase price.

• Additionally, there are high transaction costs, including dealer markups, auction house commissions, insurance and storage costs, value added tax, and capital gains tax when work is sold.

• All art markets are cyclical. In the 1980s, the Impressionist and modern art market seemed unstoppable. Japanese paper mogul Ryoei Saito came to symbolize the boom when he paid a record auction price of $82.5 million for van Gogh’s ‘Portrait of Dr Gachet’

• Mei/Moses Index measures price trends for art. The Index has a few flaws, the main one being that it measures only paintings which have sold at least twice at auction (talk about cherry picking!).

• In the late 1990s, UBS, Citigroup and Deutsche Bank set up departments to advise high net worth clients on art investment.

• There have been a number of art-fund disasters that no one discusses. Chase Manhattan Bank with a $300 million art fund, and the Japanese Itoman Mortgage Corporation, which invested $500 million in Western paintings, each lost much of its investment. Each said that its model would have worked with a holding period of twenty to twenty-five years, but no investor was willing to commit funds for that long.

• During the art market crash of 90s one-third of auction buyers were from Japan, and the Japanese yakuza (mafia) were buying with money borrowed against highly leveraged property. When the Nikkei share index collapsed and Tokyo property values tumbled, warehouses full of western art emptied onto a market that was not buying.

8/ Misc.

• “Modern art is merely the means by which we terrorize ourselves.”

• Artnet is a website where you can check on previous auction prices.

• The most dramatic art trend in mid-2007 was the expanding role and popularity of Chinese art, much of it a commentary on that country’s huge social changes.

• Foreign buyers entering the western art market are also buying artists with their ears rather than their eyes, and overpaying if others have.

• Deutsche Bank corporate collection with 50,000 works is the largest in the world.

• “Art tells you things you don’t know you need to know until you know them.”

[sougataG]

I have read this book. You have done a great job summarizing it. For anyone interested in knowing more about the business of high-end art, this is a must-read book. Thank you.

[phreakv6]

Old Path White Clouds, Thich Nhat Hanh, 1987 - Visiting one too many monasteries in Ladakh, I picked up this book after that trip. This book is derived from 24 Pali, Sanskrit scriptures and Chinese sources and retold by the author in simple English. It covers the life of early Buddha (Siddhartha Gautama) as the prince, all the way to his death and everything he did in between, including the troubles he faced in running a large community of bhikhus.

You cannot learn meditation by reading a book - that the Buddha insists. It is through practice you will find it and not from theory and mental arguments. You will notice how much Buddhism of today is tainted and veered from Buddha’s teachings upon reading the book as he insists on not being dogmatic, not worshipping, chanting prayers etc. A lot of this is what transpired over the centuries post his death.

The following is a faithful reproduction of the ideas in the book. These are not my ideas (some touchy subjects have flared up here in the past - so qualifying it before proceeding). I have tried to restrict the notes to usable learnings and not the entire biography and characters - the book reads very different from the essence extracted here.

My notes -

• Buddha - means the enlightened one (’budh’ in magadhi is to awaken)

• Buddha walked just to enjoy walking, unconcerned about arriving anywhere. Each step slow, balanced and peaceful. Ate in silence, mindful of each bite.

• Bhikkhu was one who left his family to follow the Buddha and followed the Dharma, the path that lead to awakening as part of the Sangha the community that supports one along the path

• Buddha was kind to Svasti, the untouchable boy that tended buffaloes. It was impossible to be polluted by the touch of another fellow human being and it was wrong to create divisions

• The truth is the truth whether anyone believes it or not. A million people may believe a lie, it is still a lie. You must have great courage to live by the truth

• Live by love, understanding and compassion towards all life

• Abusing the body cannot help one find peace and understanding (on fasting indefinitely as a form of meditation). The body is just an instrument, a temple of the spirit, a raft with which we cross to the other shore and self-mortification is unjust

• “Why must the holy men chant so long?” and “Why can’t father recite the scriptures himself?” instead of having the Brahmans do it - queries which perhaps laid the foundation for the seeker in the young Buddha (”Reciting the scriptures does nothing to help the worms and the birds” - he concludes after meditating on it under the shade of the rose-apple tree)

• Siddhartha was taught that cosmos emanated from the Supreme being known as Purusa or Brahman, and that all castes in society had issued from various parts of the creator’s body

• Siddhartha did not like the power accorded to the Brahman priests. He felt they oppressed and manipulated the people with fees to conduct rituals at birth, death or marriages

• Siddhartha never missed a class of Vedas and liked to discuss with monks and hermits. He preferred their selflessness to the selfishness of the priests

• Buddha didn’t believe a river could wash away someone’s sins (then the fish, shrimp and oysters ought to be the purest beings of all)

• Young Siddhartha observed the workings of the Royal court - the power struggles in maintaining one’s position to alleviating the suffering of the people in need. He felt his father too was imprisoned by his position (of being unable to fix the greed and corruption)

• People were entrapped not only by illness and unjust social conditions but by sorrows and passions of their own making in their hearts and minds

• “I too am trapped by feelings of anger, jealousy, fear and desire”, young Siddhartha says to his Father while insisting he can point to the problems of the court but had no cure for the selfish ambitions of the court

• Pursuit of religion is not in the studying of holy scriptures but had to include the practice of meditation to attain liberation for one’s heart and mind

• Four stages of brahman’s life - youth he studies vedas, then marries and raises a family and serves society, in the third stage he retires and pursues religious studies and in the fourth, released from every tie and obligation, lives as monk - Buddha questioned why a person can’t live all four ways at once

• “A day upon the throne will be like a day of sitting on a bed of hot coals for me” - Siddhartha to his father before leaving to pursue his path of liberation

• Knowledge is attained from direct experience and direct attainment, not from mental arguments

• The realm of infinite space - the meditative state in which the mind becomes one with infinity, all material and visual phenomena cease to arise and the space is seen as limitless source of all things. Its not an object of the consciousness, but your very consciousness itself

• Buddha realised early on that his own mind was present in every phenomenon of the universe

• Everything in the universe is recreated in the mind and hence all phenomena is illusory - form, sound, smell, taste and tactile perception were all creations of our mind

• The realm of no materiality - a meditative state in which we see that no phenomenon exists outside of one’s own mind

• While the realm of infinite space and real of no materiality were precious fruits of meditation, Buddha realised it did not help resolve the fundamentals problems of birth and death, nor liberate one from suffering and anxiety. Buddha’s goal was not to become leader of a community but to find the path of true liberation

• State of neither perception nor non-perception - The path to liberation has to transcend all perception (samadhi). To transcend is to not escape but to be mindful to observe the feelings and perceptions as they arose

• Gautama took the atman, or separate self from the vedas and realised that in reality only non-self, or anatman was the nature of all existence

• River of perceptions flowed alongside rivers of body and feelings and they intermingled and influenced each other. Endless suffering arose from erroneous perceptions in believing the impermanent to be permanent, that which is without self contains self, that which has no birth or death has birth and death and in dividing that which is indivisible into parts

• Fear, anger, hatred, arrogance, jealousy, greed rose out of ignorance - the very opposite of mindfulness. They could be conquered only through direct experience, bypassing the knowledge of the intellect

• That which has never been born is incapable of ever dying (a new leaf has always existed in the universe but has simply manifested itself in its new form of perception)

• Interdepedence and non-self are the keys to liberation. Impermanence and emptiness of self are the very conditions essential for life. A rice grain won’t grow into a rice plant or clouds into rain or a child into adult if it were all permanent

• Birth/death, pure/impure, production/destruction, one/many, inner/outer, large/small were all concepts of false distinctions created by the intellect - and are sources of all suffering. Penetrating the empty nature of all things and trancending all mental barriers one can be liberated from the cycle of suffering

• Love and understanding were one and the same. To attain clear understanding, live mindfully, making direct contact with life in the present moment, truly seeing what is taking place within and outside of oneself

• Aryamarga - The noble path of right understanding, right thought, right speech, right action, right livelihood, right effort, right mindfulness and right concentration (the noble eight fold path of buddhism) to avoid mind’s false division of subject and object, self and others, existence and non-existence, birth and death and to destroy the jail keeper that was ignorance

• A person who lives in awareness knows what she is thinking, saying and doing and can avoid thoughts, words and actions that cause suffering to self and others

• To plunge into sensual pleasures or to pursue extreme austerity depriving body of its needs would both lead to failure in pursuing the path

• Five precepts for lay disciples - 1. Do not kill 2. Do not steal 3. Do not engage in sexual misconduct 4. Do not say untruthful things 5. Do not use alcohol

• Dependent co-arising - All things depended on each other for their arising, development and decline. Within one thing existed all things. Meditating on it had the power to break through fixed and narrow views that universe had been created by some god

• Our minds are busy chasing after yesterday’s memories and tomorrow’s dreams. The only way to be in touch with life is to return it to the present moment

• Your feelings and perceptions determine the quality of your life

• Once a person is caught by belief in a doctrine, he loses all freedom. When one becomes dogmatic, he believes his doctrine to be the only truth and others are heresy

• Buddha felt his goal was not to explain the universe but to help guide others to have a direct experience of reality - a method to experience reality and not reality itself

• “My teaching is a means of practice, not something to hold onto or worship”. Its a raft used to cross the river - there’s no point in carrying it after crossing the river

• Peace and joy were possible right in the very moments of working - means and ends were not two different things

• Spiritual enlightenment does not depend on age - months and years do not guarantee the presence of enlightenment

• Life has great need for love - but not of one based on lust, passion, attachment, discrimination and prejudice but based on kindness and compassion - maitri (capacity to bring happiness to others) and karuna (capacity to remove others suffering)

• Love based on selfish desire to possess others will not bring them peace and happiness and instead make them feel trapped. If the one we love is unhappy from our love, they will find a way to free themselves and not accept the prison of our love (love will devolve into anger and hatred)

• To love is to understand your loved one’s sufferings and aspirations. To relieve their suffering and to help fulfil their aspirations is true love

• Buddha refrained from answering esoteric questions that were not essential for the practice of realising the way to attain detachment, equanimity, peace and liberation.

• The practitioner observes his body, his breath, the four bodily postures of walking, standing, lying and sitting. Breathing in, he knows he is breathing in and breathing out, he knows he is breathing out. He contemplates feelings as they arise, develop and fade, irrespective of pleasant, unpleasant or neutral. When happy, he knows he is happy because he received praise and merely observes it and is aware. It is practised throughout the day

• The practitioner knows when he is centered or distracted, open-minded or close-minded, blocked, concentrated or enlightened, the practitioner knows at once. He is aware of the 5 hindrances to liberation - sense-desire, ill-will, drowsiness, agitation and doubt

• He is aware of the 7 factors of awakening - full attention, investigating dharmas, energy, joy, ease, concentration and letting go and 4 noble truths - existence of suffering, causes of suffering, liberation from suffering and the path that leads to liberation from it

• When a seed transforms to a tree, it did not die. The seed and tree are both birthless and deathless

• A person who has not tasted mango cannot know its taste no matter how many words or concepts someone uses to describe it to him. We can grasp reality only through direct experience

• tathagata, or suchness - one who comes from nowhere and goes nowhere

• If one is idle or lazy, one will not make progress in the practice. If one tried too hard, one will suffer fatigue and discouragement - know limits to not forcing mind and body

• It isn’t necessary to suffer and make sacrifices in the present to acquire happiness in the future - life exists only in the present moment. self-mortification, starving and austerity cause suffering to the body in the present and the future, as do sensual pleasures

• Birth and death cannot touch me - I smile because I have never been born and I will never die. Birth does not give me existence and death does not take existence away

The book is part biography of Buddha, part spiritual on his teachings, part history on ancient India from 600 BC. There’s a lot of repetition as the Buddha’s preachings only incrementally evolved over the decades he practiced and preached his way of enlightenment. The names of people, places may sound a bit off - perhaps from the translation or from this being truer than the anglicised versions we are used to. Buddha’s teachings are a marvel from ancient India and something I could connect to, despite it being 2500+ years old. A lot of the practice, without the tangent modern buddhism has taken is preserved in Vipassana meditation and is something I am hoping to try out. 9/10

[xvivek]

@phreakv6 As always your reviews all gives good essence of the book. Vipassana teaches the same but in actual feeling. At least for me its tough and painful but if one sit for those ten days the person will have life time experience. Everyone should experience alteast once.
Thanks for the review.

[Mudit.Kushalvardhan]

Thich Nhat Han makes vipassana more fun and less serious affair. Vipassana is like making your instrument sharp in those 10 days but Thich nhat han shows how we can implement those learnings in daily life.

[Deven]

Phantoms In the Brain V S Ramachandran book

A patient suffered stroke that paralysed the left side of her body, but she believes that her left arm is working fine. In asking who’s this paralysed arm, she says this belongs to her brother.

Other patient due side effect of stroke, he started laugh uncontrollably and ultimately died due to laughing.

One young patient had accident and suffered head injury. He thinks her parents are impostors who looks like his parents but are not his real parent.

None of these patients are crazy, hence psychiatrists’ treatment would be waste of time, rather each of them suffers from damage to a specific part of the brain.

The fascinated part is that many of us encounters small stroke which neither self nor other notices. Such stroke affects part of brain and outcome is odd behaviour which can’t be explained.
Like in one patient part of brain Hippocampus is removed during surgery. Hippocampus is responsible for memory, due to the removal patient is not able to form new memories, yet he recalls everything that happened before the surgery.

One patient suffered small stroke and on the way to recovery. He knows every other thing of his life and talk with doctor normally. However, when dr asked “What’s Seventeen Minus Three?” – he was not able to answer it. This means each of us has a number center in the region of the left angular gyrus. If we suffer stroke there than we can’t perform easiest numerical computational tasks.

We have body map, under which as example index finger is associated some point at our face. So if you touch that point the sensation is felt in finger.

And below blew my mind:
There is terms in medical pseudocyesis or false pregnancy.
This happens to woman who wanted to have baby badly. Under this they develop all signs of pregnancy except baby. Their abdomens swell to enormous proportions, aided by sway back posture, nipples become pigmented, morning sickness, sense of fatal movements and menstruating cycles stopped.

This shows power of mind.
The book gives us different prospective of mind and life. One become more acceptable to others view point.

This book has no relevance to stock market. You may like if you have interest to know more about mind or philosophy.

[phreakv6]

Seven and a half lessons about the brain, Lisa Feldman Barrett, 2020 - (To be read with Attenborough’s voice) Ancient creatures like the Amphioxus which lived 550 million years ago and are still alive today have cells for sensing directly connected to its cells for movement - it didn’t need a brain to process information about the environment. We tell ourselves that our brains were evolved to think but this couldn’t be further from the truth.

The Cambrian explosion transformed the world into predator and prey, and consequently made the world a dangerous place. Sophisticated sensory systems evolved as a means to hunt and to escape - creatures could finally “see”, unlike the Amphioxus which would only sense light and dark. These creatures also evolved finer, sophisticated kinds of movement - evolution understandably favoured these.

Allostasis, or body budgeting involves keeping track of what’s earned and spent - eating and sleeping vs swimming and running. To balance a budget well is to avoid surprises and that involves prediction, than reaction. Prediction involves determination of value of action and thus actively drives decisions. More complex creatures like us, have a cardiovascular system, a respiratory system, immune system etc. - balancing this budget needed an accounting department and thus a command centre - the brain.

The brain supervises 6000 muscles in motion, balances dozens of different hormones, looks over the heart that pumps 2000 gallons of blood per day, regulates energy of a billion brain cells, digests food, excretes waste and fights illnesses - nonstop for an avg of 72 yrs. It continually invests your energy to earn good return to find yourself food, shelter, affection or physical protection - so you can pass on your genes to the next gen.

Triune brain theory - or the lizard brain (instincts), limbic brain (emotions) and neocortex (rationality) theory of brain being in layers with the ancient lizard brain in the center is one of the most widespread errors of science. Lizard brain theory runs rampant in popular science books once Carl Sagan introduced it in ‘77 (Munger talks about it a lot too). In reality bad behaviour doesn’t come from lizard brain and good ones from rationality - these don’t even live in separate parts of the brain.

Our brains are not very different from other vertebrates in terms of manufacturing plan or biological building blocks - the building block for cerebral cortex runs longer in humans than in lizards. So contrary to popular opinion, neocortex is not new. Neither is our cerebral cortex large - its like a large house with a large kitchen in proportion (scaled-up monkey brain or scaled-down elephant brain). The size of the cerebral cortex has little to do with rationality and thinking driven by emotions is not always bad - provided your brain is adjusted to the environment it lives in.

Left-brain being rational and right-brain being creative or system-1 and system-2 are just metaphors and not reality of the brain. A metaphor’s simplicity can become its greatest failing if people start treating it as an explanation. Reality is 128 billion neurons networked with 500 trillion neuronal connections (not every neuron speaks to every other) that become weaker or stronger as you go through the experience of life. Hubs form strong local connections while maintaining connections globally across the brain. Hub damage is linked with depression, schizophrenia, dyslexia, chronic pain, dementia, parkinson’s and other disorders (Efficiency leads to vulnerability)

Neurotransmitters (glutamate, serotonin and dopamine etc) and neuromodulators (endorphins, oxytocin etc.) help in changing the functioning of the brain network though the physical neuronal connections remain same. When neurons fire together, connections become stronger, leading to plasticity. Neurons can have many jobs and there are some whose only job is to have many jobs (dorsomedial prefrontal cortex that regulates memory, emotion, perception etc). Even a simple repeated action can be guided by different set of neurons each time (degeneracy). Brain network may extend to gut and intestines and even microbes in the gut can communicate with the brain via neurotransmitters. (Guilia Enders talks about this in ‘Gut’)

It takes 25 years for an adult human brain to be fully formed - for the wiring to be complete. The wiring is influenced by genes as well as the environment (nature and nurture), the environment being both physical and social. Tuning (strengthening connections) and pruning (if you don’t use it, lose it) helps in improving efficiency.

Memories aren’t stored as much as they are recreated every time (and by different sets of neurons - hence memory can be deceiving). Same is true with experiences - your brain combines information from outside and inside your head to produce everything you see, hear, smell, taste and feel. An artist only does 50% of the work in creating art - the rest is done by the viewer’s brain (the beholder’s share). Your day to day experience is a carefully controlled hallucination, tightly controlled by the brain.

Predictions are just brain’s way of having a conversation with itself. Your brain predicts continuously and checks against sense data. Brains aren’t wired for accuracy, they are wired to keep us alive, hence we act before we are aware of the senses (though we may rationalise later). But you can change this by curating new experiences and trying new activities that rewire the brain. Everything you learn today seeds your brain to act differently tomorrow.

If you and your partner feel your relationship is intimate and caring, you are less likely to get sick. We are a social species and thus solitary confinement or enforced loneliness can be like capital punishment in slow motion. Most species in the animal kingdom regulate each other through chemicals like pheromones but human beings can also do it with words. A kind word at the end of a hard day can calm you. The language network in fact controls the insides of your body, including major organs and systems that support your body budget - the language network can guide your heart rate up or down (All is well)

While occasional stress can create a stronger, better you, chronic stress (physical illness, financial stress, hormone surges, not sleeping or exercising enough) can eat away at your brain and cause illnesses to your body. Social stress within 2 hours of a meal can make your body metabolise food in a way that adds 104 calories to the meal. The brain burns 20% of body’s entire metabolic budget, making it the most expensive organ in the body.

Human brains make different kinds of minds and this variety is essential for the survival of the species. Mind and body are strongly linked and the boundary between the two is porous. We try to infer what other person is thinking or feeling and this mental inference is a valuable skill of our culture. Myers-Briggs Type Indicator (MBTI) might help find your type but is often misleading as it relies on your inputs. Author likes the Hogwarts Sorting test.

Affect (or mood) - the general sense of being that comes from your body - may be pleasant or unpleasant and can impact how we perceive things. It can make things profound or sacred or trivial or vile. Affect hints at whether your body’s budget is in green or red (Lack of sleep, hunger, physical pain, social stress can cause it to go to red).

The boundary between social reality and physical reality is porous - wine tastes better when people believe its expensive, as does Coffee that’s labeled eco-friendly. Your social reality can change your brain’s predictions. Your brain creates social reality through creativity (made up concepts like borders, citizenship), communication (sharing ideas through language), copying (how to prepare food, what to wear), cooperation (A can of food could involve thousands of people coming together) and compression (abstracting information). These 5 Cs allow us to bend the world to our will. Social reality helps people (like driving laws) or could hurt (slavery) so we must bear responsibility while using this superpower.

This is a short read and can be a good start to understand our brain, its powers and its limitations. 9/10

[phreakv6]

Walking the Himalayas, Levison Wood, 2016 - I don’t read much travel books, so this is a new exploratory genre for me. I have probably started with one of the best perhaps, since this book kept me riveted through the journey of the author as he crossed the Himalayas on foot.

The journey starts from Afghanistan’s Wakhan corridor, through Gilgit into Pakistan and into India via Srinagar, onwards to Dharamshala, Shimla and Rishikesh towards Nepal’s Pokhara and Kathmandu, back to green fields of West Bengal briefly and ending in Bhutan’s Gangkhar Puensom. The book beautifully captures the essence of these places, with the Himalayan backdrop but explores the cultures, languages, beliefs and quirks of the people as much as it does the beautiful and dangerous terrain, the rivers, streams, trails and roads.

You come across a lot of colorful characters, who form a spectrum between going out of their way trying to help or rip the author off. The author is joined by different people during the journey and he is almost never alone, so there are lot of conversations as well about the mountains (like the fact that Karakorum is Turkish for crumbling rock) and life in general.

You get a sense of the Hindu Kush and Karkorum, Amu Darya and the Pamir mountains, the nomadic Kyrgyz, Gilgit-Baltistan and Nanga Parbat, the palpable tension along the LoC between India-Pakistan (author crosses through Wagah after failing to convince the soldiers on Pakistan side on a shorter route through the mountains), the Tibetan culture preserved in Dharamshala, a meeting with the Dalai Lama, a glimpse of the sadhus and birth of the Ganges at Rishikesh, the wilderness of Nepal alongside the wilderness of its governance, the weird system in Bhutan that appears to work well for them, all through this 1700 mile trek. You also get a car crash, the only time the author decides to get into one for 10 kms and a break and resumption in the journey after his recovery from it and an endearing tale of friendship over decades with Binod who the author had met as a teenager in Nepal. This book is travel adventure through and through, captured beautifully in words that transport you to people and places far away. 9/10

[ValueInvesting]

when it comes to travel, the two Jim Rogers book one with motorcycle and one with his mercedes, combined finance with travel nicely! Always enjoy your summaries and find new books had not hit upon yet! Thanks.

[Apurva_Dubey]

The Age of Scientific Wellness: Why the Future of Medicine Is Personalized, Predictive, Data-Rich, and in Your Hands by Leroy Hood and Nathan Price (2023)

In this book the authors argue that the contemporary medical paradigm is one of “sickcare” rather than that of “healthcare.” To elaborate, in today’s world, the medical interventions happen long after a disease has taken hold, following a centuries-old medical playbook that goes like this: Wait for something to go wrong → Try to identify what caused the problem → Try to fix it → If it works, try the same approach on the next person → If it doesn’t work, treat the complications—or write a death certificate and move along.

But, it doesn’t have to be this way…and it shall not remain this way for too long.

The authors say that we are in the first stage of the largest paradigm shift in healthcare since the beginning of modern medicine. In the times to come the way we approach health will change so profoundly that we will struggle to understand why we ever did things any other way. In a not-too-distant future the healthcare will focus on the optimization of individual wellness and early detection of wellness-to-disease transitions with a potential for reversal before the emergence of clinically diagnosable disease.

This paradigm shift will be brought about by (1) systems-based approaches for modeling human physiology a.k.a. “systems biology” (2) collection & mining of vast troves genomic, phenomic and digital data for all individuals (3) AI (4) having better understanding of biological aging and the on-going research on reversing biological aging (5) better understanding of brain and neurological disorders (6) immunotherapy for cancer.

My notes below don’t do justice to the depth and to the ‘interconnectedness of chapters’ of this book. If you are interested in the future of healthcare, then do give it a read.

The Rise of Systems Biology

• Currently, we study biological systems one gene at a time, one protein at a time, one disease symptom at a time, ignoring the ever-mounting evidence that there are very few processes in our bodies in which A causes B, and B causes C, and so on in a simple, linear manner. Biology generally operates as complex systems rather than linear pathways.

• Despite the tremendous advances that gene and protein sequencing offered us, most of the research world is still locked in classically reductionist research.

• Scientists engaged in systems biology conduct experiments to determine how each part of the human body is connected to other parts and to the whole.

• Academy of Sciences report described the biology of the future as systems biology.

• These days, when scientists are asked to speak about the future of biological research, they generally point to a future that is holistic, data-intense, integrative, dynamic, and network-based—all systems approaches.

• There are four major types of biological information: DNA, RNA, proteins, and biological networks.

Mining vast troves of information

• There are three categories of information we need for every person to implement a data-driven vision of wellness and prevention. The first is the genome, the source code of life, which is virtually invariant throughout a person’s lifetime (except for the mutations in cancer cells).

• The second is the phenome, an assessment of your body’s status at any point in time during your life as a result of the interaction of your genome, your lifestyle, and your environment. Your phenome changes continuously, and it can be sampled at any time through certain measurements such as the gut microbiome and blood analytes.

• The third category is digital measurements of health. Health data from smartphones, watches, smart rings, and other wearables that can track their heart rate, body temperature, respiration, activity level, calories consumed and burned, sleep, menstrual cycles, blood sugar, hormone balances, and more.

• With these three categories of data in hand, we can assess the optimal physiology of one’s body and brain and detect early transitory phases many years—even decades—before a disease becomes clinically apparent.

• Actionable possibilities that have arisen in the recent years: The American Society of Human Genetics has identified seventy-six disease-causing variants for which there are possible actions to prevent disease.

• The new field of clinical pharmacogenomics promises to teach us how our individual genetic variants and their associated drug toxicities can affect our choices for appropriate drug treatment.

Understanding Genetic Risk

• Genetics that affect the risk of disease fall into three categories: dominant genes, recessive genes, and polygenic risk scores.

• Dominant genes are responsible for diseases that can be caused by a single copy of the “bad” gene. Most dominant genes have lower degrees of penetrance, meaning they elevate the risk, but disease is not a certainty. This is the case with BRCA1 and BRCA2, the breast and ovarian cancer genes.

• An individual needs two copies of a defective gene, however, to inherit a so-called Mendelian recessive genetic disease like in sickle cell anemia, cystic fibrosis, Tay-Sachs disease, and hemochromatosis.

• The third category of genetic diseases occurs as the result of a polygenic combination of many—up to thousands—of variant genes, each contributing minutely to the total genetic risk.

Reversing biological aging

• “Hallmarks of aging” are: (1) changes in the ways genes are expressed over time (2) a growing inability to get rid of dysfunctional proteins through autophagy (3) exhaustion of stem cells (4) accumulation of zombie-like senescent cells that inflame healthy cells

• Nicotinamide riboside (NR), which boosts NAD+ levels in humans and has been tied to an increased health span in a number of animal models. NR is an alternative form of vitamin B3 that acts as a precursor for the production of nicotinamide adenine dinucleotide, or NAD+, a chemical compound that is vital for the process of converting food into energy, repairing damaged DNA, and maintaining circadian rhythms.

• There is also a lot of current interest in a similar molecule, nicotinamide mononucleotide or NMN. NMN works through similar mechanisms to increase production capacity for NAD+

• Another intriguing candidate molecule is rapamycin, which was initially used to treat renal transplant patients as an immunosuppressant

• Epigenetics measures the extent of methylation of one’s DNA and hence the extent to which gene expression is blocked (thus slowing aging).

Alzheimer’s and Dementia

• Alzheimer’s patients have an estimated annual cost of $500 billion a year in the United States alone.

• At its heart the key disease mechanism is associated with metabolic energy deficits in the brain. PET scans show metabolic deficits as many as ten to fifteen years before cognitive decline sets in for those diagnosed with Alzheimer’s.

• The APOE4 variant of gene APOE is a major genetic risk factor for Alzheimer’s. One bad copy of this gene increases risk 2x; having two bad copies makes it 3x.

• Efforts to find a “magic pill” for Alzheimer’s are ongoing—and most of these still target amyloid, the protein whose aggregation in the brain was one of the first features noted originally by doctors as a cause for the disease.

• The prevailing hypothesis about Alzheimer’s has for decades focused on the buildup of amyloid plaque, which authors feel is woefully incomplete. Following hundreds of failed clinical trials, the tide has been turning against the conventional amyloid thesis of Alzheimer’s

• As late as 2021, the FDA approved a new monoclonal antibody that targets amyloid called aducanumab, created by Biogen. This approval was a controversial decision, to say the least. None of the eleven scientists on the advisory panel voted to approve the drug, citing a lack of evidence for efficacy. The FDA took the highly unusual action of overriding the recommendations of the scientists and moving ahead with approval anyway, reasoning that, although it showed no significant effects on cognition, at least it reduced amyloid plaques.

Cancer - The Promise of Immunotherapy

• Cancer is one of the fields that is increasingly moving away from a “one size fits all” approach to what is known as precision treatment. It has probably gone further than any other area of medicine toward personalization of treatments based on a patient’s genetic profile.

• Before the advent of immunotherapy, the entrenched view that “slash-poison-burn” (surgery-chemo-radiation) was the best way to tackle cancer. But in the past decade, there has been an explosion of immunotherapy research, prompting tremendous changes in clinical practice. The prediction that there would one day be a fourth kind of cancer therapy—immunotherapy, along with surgery, chemotherapy, and radiotherapy—has finally come true.

• Immunotherapies can be thought of as “training” the sentry T and B cells, helping them to become even better at identifying and fighting invading cells.

• Immune checkpoint therapy is a new type of immunotherapy in which drugs are used to block proteins that keep one’s immune responses from effectively identifying and attacking cancer cells. This strategy does not work with every cancer, but when it works, it really works—and it can have transformative effects for patients with hard-to-treat cancers such as melanoma, multiple myeloma, and renal cell carcinoma.

• The promise of immunotherapies has rejuvenated cancer research. It has also driven the development of new cancer technologies, strategies, and companies. Between 2017 and 2021, the number of immuno-oncology drugs in development grew by a staggering 233 percent to over 4,700.

• A report from the Cancer Research Institute identified a 60 percent increase in the number of academic and research groups actively conducting immunotherapies between 2017 and 2019, leading to the approval of thirty-one new drugs by the FDA.

• Immunotherapy holds enormous promise, but it cures only a few cancers (mostly tumors in the blood or liquid tumors, such as leukemias or lymphomas) and has not yet been effective for most organ or tissue tumors.

• Cancer diagnostic biomarkers are molecules whose levels (or fluctuations) reflect a transition in health status. These can include proteins, metabolites, lipids, fragments of “cell-free DNA” released into the bloodstream when tumor cells die, and blood exosomes.

• The company Grail recently made a remarkable advance in cancer biomarker discovery. By analyzing the epigenetic profiles of white blood cells it was able to diagnosis about fifty different cancers. Grail was recently purchased by the Illumina for $6 billion.

• Immunotherapy, new approaches to identifying blood biomarkers, and genome / phenome clinical trials will move us aggressively toward effective cancer treatments in the next ten years.

AI imperative

• AI systems are already transforming healthcare. Those changes will accelerate in the coming years to such a degree that AI will soon be as much a part of our healthcare experience.

• Protein folding: There is a long-standing “grand challenge” for computational biology: being able to predict the shape of a folded protein given just its gene (amino acid) sequence. This is an ideal problem for data-driven AI in that it is well defined, offers concrete ways of measuring “better” or “worse” predictions.

• It’s also a question of great importance, because the shape of a protein determines its function—what chemical reactions it may catalyze, what molecular machines it will help build as multiprotein complexes, and how it interacts with other molecules to assemble cells, tissues, and organs. So if we want to understand the chain of events that moves us from DNA to RNA to amino acids—the building blocks of proteins—and onward to the full complexity of human life, we have to know how proteins fold.

• This challenge of predicting protein structures is so important to the scientific community that a competition (CASP – Critical Assessment of Protein Structure Prediction) is held every two years.

• DeepMind’s AlphaFold entered the CASP contest in 2018, it beat the competition by nearly 50 percent, coming in at an accuracy of nearly 60 percent. In 2020, AlphaFold 2.0 blew the original AlphaFold away, making an even bigger leap forward and jumping to nearly 85 percent.

• Protein folding problem is far from solved. Proteins interact dynamically and have multiple configurations as they carry out their functions in living systems. And while AI is now good at predicting the crystallized structure, none of the current approaches can predict proteins in all of their potential structures, and validating such predictions is a significant challenge.

• Another major domain of medical AI is interpreting imaging data. Images make up a large fraction of medical data and generally take significant amounts of time from trained experts to interpret. AI technologies are now providing help in extracting, visualizing, and interpreting imaging data.

• One of the most exciting technologies under development today enables us to simulate each individual’s unique physiology (top down) and biochemistry (bottom up) in a computer, creating a “digital twin”. These programs essentially seek to create a computational version of all that is known about your unique physiology and biochemistry so that, when the time comes, medical interventions intended to help save or extend your life could first be simulated on your computational twin.

Genomics: Leading the Way

• Of all the -omics technologies (proteomics, metabolomics, transcriptomics, epigenomics, microbiomics, genomics), genomics is the first that is being integrated at scale into healthcare systems.

• The widest adoption of genomics today is for sequencing tumors and comparing these sequences to the genome a patient was born with. This information is then used to target therapies with a higher likelihood of success.

• When the first genome was sequenced, it was true that genetic codes didn’t provide much actionable information. As of 2022, there were at least seventy-six genetic variants classified as clinically actionable, including for colon cancer, breast cancer, ovarian cancer, heart failure, and sudden cardiac death.

• The combination of genomics with other data types—including clinical, wearable metrics, and multiomic deep phenotyping data—considerably increases actionability.

• The costs for whole genome sequencing are coming down; some of these predict that the cost of whole genomes will drop to $10 in the not-too-distant future.

• One of the very big advantages of whole genome sequencing is its ability to help you decide what biomarkers to monitor because for most people, right now, it would be both prohibitively expensive and overwhelmingly complicated to test for every potentially meaningful marker.

Random

• The human tragedy and economic costs of diabetes are staggering—some $327 billion is spent annually on its treatment in the United States alone.

• False-positive cancer screening test results are so common that many doctors have concluded that some of these tests are worthless.

• Few people realize it, but the ten most popular drugs in the United States today—from esomeprazole and rosuvastatin to fluticasone and pegfilgrastim—work, collectively, for only about 10 percent of treated patients. Too many people are being subjected to their known side effects without benefit to their underlying condition.

• Freeman Dyson writing in Imagined Worlds: “New directions in science are launched by new tools much more often than by new concepts. The effect of a concept-driven revolution is to explain old things in new ways. The effect of a tool-driven revolution is to discover new things that have to be explained.”

[Apurva_Dubey]

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das (2011)

This is a wildly funny and equally insightful book. Satyajit Das – with his encyclopedic knowledge, wide-ranging & esoteric references, and a razor-sharp wit – tells a spellbinding story of “money culture” and financialization of the world economy, starting in the latter half of the 20th century and leading up to the Global Financial Crisis. Das says, in this period money changed from a mechanism of exchange into something important in its own right – extreme money…which in turn created a powerful coalition of financiers, business interests, regulators, and politicians that increasingly dominated the economy. The book is punctuated with very funny anecdotes which are hard to capture in notes. I’d highly recommend reading this one.

Below are my notes –

• Max Weber, the father of social science, defined the state as the agency that successfully monopolizes the legitimate use of force.

• The strange thing is that gold has almost no value as a commodity and is not itself a great store of value.

• In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.

• The banking system that evolved in the Renaissance survives remarkably unchanged to this day.

• Debt can be thought of as a monetized Ponzi or pyramid scheme. To be self-sustaining, the modern monetary system—printing money, reserve banking, and debt—requires a Darwinian scheme in which the only ones who survive are those who can induce others into even greater debt.

• Japan has the world’s largest pool of savings—estimated at more than more than $15,000 billion, built up through legendary frugality and thrift during Japan’s rise to prosperity after the Second World War.

• Following the 1929 stock market crash and the collapse of the banking system, the Glass-Steagall Act of 1933 separated commercial banking and investment banking. In 1999 the Act was repealed paving the way for financial supermarkets—one-stop money shops taking deposits, making loans, providing advice, underwriting and trading securities, managing investments, and providing insurance.

• In traditional banking, banks originate credits and hold them on their balance sheet until their maturity. Over time, however, banks began to replace the originate-to-hold model with the originate-to-distribute model, whereby they originate a credit and sell or securitize a portion of it at the time of origination or later.

• Banks decreased their equity and cash reserves, assuming they could always buy these resources from the market at a price in case of need—this came to be known as purchased capital and purchased liquidity.

• The Travelers/Citicorp merger would offer a one-stop-shop for payments, credit cards, mortgages, savings, and investment products. But as the baseball player Yogi Berra noted: “In theory there is no difference between theory and practice but in practice there is.”

• “The moment you cheat for the sake of beauty you are an artist.”

• An economic order where some nations save and others borrow this money to fund consumption, buying goods from the savers, is inherently unstable. China had effectively lent Americans the money to purchase its goods and now faced the prospects that the loans would never be repaid.

• In investing its reserves and savings heavily in dollars, China had stepped on a bounding mine, which does not explode when you step on it but when you step off.

• Friedmanites argued that Reagan and Thatcher’s policies reinvigorated the economy, paving the way for the Great Moderation. Coined by Harvard economist James Stock, the term referred to an era of strong economic growth, increased prosperity, and the perceived end to economic cycles and volatility.

• MIT economist David Durand argued that the new finance had “lost virtually all contact with terra firma…[being] more interested in demonstrating… mathematical prowess than in solving genuine problems; often…playing mathematical games.” Milton Friedman, sitting on Harry Markowitz’s doctoral dissertation committee, grumbled: “It’s not math, it’s not economics, it’s not even business administration.”

• The Modigliani-Miller propositions crucially introduced the irrelevance principle and arbitrage. They argued that the earnings of a firm were independent of financing decisions with the financing mix between debt and equity only determining how earnings were split between lenders and shareholders.

• Just as every art movement has its defining work, the Black-Scholes option pricing model is the masterpiece of financial economics. The Black-Scholes-Merton (BSM) option pricing model relied on the CAPM, itself reliant on the EMH, and arbitrage. While physicists searched, financial economists had arrived at their own version of the GUT (grand unifying theory).

• Theory should be judged not on its assumptions, but on the power of its conclusions. Karl Popper argued similarly that factual evidence could never prove a theory but could only fail to disprove it.

• LBOs are synonymous with KKR (Kohlberg, Kravis, and Roberts) and their $31.1 billion LBO of RJR Nabisco.

• LBO were about high levels of leverage—debt. Investors, financial sponsors, committed a small amount of the capital required to buy a company. The bulk was borrowed and repaid from the cash flow of the acquired business. The game was buying low and selling high, with other people’s money.

• LBO firms gobbled up quiet companies with reliable earnings and cash flow. Financial buyers and a stake for existing management and staff were attractive to a retiring generation of founders of family-owned businesses.

• In 1982, an investment group headed by William Simon, a former U.S. Treasury secretary, acquired Gibson Greetings, a producer of greeting cards, for $80 million. Some 16 months later the investors floated Gibson on the stock market for $290 million. Simon turned an investment of around $330,000 into approximately $70 million.

• The personal computer accomplished for Wall Street buyout boutiques what the advent of gunpowder did for Mongol warriors.

• Milken’s junk bonds became a high-octane fuel that transformed the LBO industry from a Volkswagen Beetle into a monstrous drag race belching smoke and fire.

• Rebranding LBOs as private equity was designed to distance them from the shameful history of Milken.

• Private equity firms paid themselves large cash dividends as soon as possible, sometimes from borrowings and asset sales, to improve returns. This was termed early return of capital; critics preferred strip mining.

• Securitization is a recipe for cutting and dicing debt into more debt. Like food recipes, securitization ranges from simple dishes to haute cuisine. The only ingredient is debt—mortgage loans, credit card loans, car loans, loans to companies, loans to people, loans to people who cannot pay, any loans at all.

• In the 1990s, securitization underwent a makeover, being rebranded CDOs (collateralized debt obligations), a term subsuming various types of underlying loans and securitization formats.

• In 1997 JP Morgan introduced synthetic securitization, overcoming the unwieldy need to transfer the underlying loans to the SPV and also lowering the cost of transferring the risk. Instead of selling the loans, the lender now purchased credit insurance against the risk of loss using a credit default swap (CDS).

• “Financial engineering is the science of structuring cash flows…credit analysis is the art of getting paid.”

• Investors relied on the rating agencies, who relied on banks, brokers, and various third parties to ensure the quality of the loans. Banks and lenders relied on the rating agencies. The brokers relied on the banks that were buying their loans and the investors buying the securities. Everyone relied on someone else to do their job.

• Bankers had not grasped painter Robert Motherwell’s observation that “the deep necessity of art is the examination of self-deception.”

• Peter Bernstein argued that: “The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that men and women are not passive before nature.”

• In the 1990s, Japanese companies and investors pioneered the use of derivatives to hide losses, a practice called tobashi (from the Japanese verb tobasu meaning “to make fly away”).

• Derivative professionals were taken in by an elegant vision of a scientific and mathematically precise vision of risk. As the English author G.K. Chesterton wrote: “The real trouble with this world [is that]… It looks just a little more mathematical and regular than it is; its exactitude is obvious but its inexactitude is hidden; its wildness lies in wait.”

• In June 2009, the global derivative market totaled $605 trillion in notional amount, up from less than $10 trillion 20 years earlier.

• In the global financial crisis, Buffett’s label of “weapons of mass financial destruction” was literal. After it filed for bankruptcy protection, Lehman was found to own enough uranium cake to make a nuclear bomb, acquired under a matured derivative contract.

• George Soros was honest: “I don’t have a particular style of investing or, more exactly, I try to change my style to fit the conditions…I assume that markets are always wrong… Most of the time we are punished if we go against the trend. Only at an inflection point are we rewarded.”

• Hedge funds do not measure the possibility of model failures when quantifying risk. They follow actress Tallulah Bankhead’s advice: “If I had to live my life again, I’d make the same mistakes, only sooner.”

• “There are those who know that they are in the game; there are those who don’t know they are in the game; and there are those who don’t know they are in the game and have become the game.”

• Amaranth was a $9.2 billion multistrategy hedge fund named after the Greek amarantos—“the never-fading flower.” In August 2006, Amaranth lost $6 billion, almost twice the loss when LTCM collapsed.

• What works on a small scale may not work on a larger scale. Some strategies need liquid markets. If you exploit inefficiency, then other investors must supply it. To be alternative, there must be a majority; the alternative cannot be the majority.

• The economist Hyman Minsky theorized that in the early stages of a business cycle money is only available to creditworthy borrowers, known ironically as hedge finance. As the cycle develops, financial conditions look rosy and competing lenders extend money to marginal borrowers, a phase known as speculative finance and ultimately Ponzi finance. The cycle ends in a Minsky moment when the supply of money slows or shuts off. Borrowers unable to meet financial obligations try to sell assets, leading to a collapse in prices that triggers a spiral of economic decline.

• Modern economies were built upon incorrect theories and flawed belief systems in a triumph of expediency over inconvenient truths. The brave new economy was built on debt.

• Charles Calomiris, an economic historian, wrote in 2008 that: “The most severe financial [crises] typically arise when rapid growth in untested financial innovations…[coincides] with…an abundance of the supply of credit.”

• The “Greenspan put” ensured that at the first sign of trouble central bankers flooded the system with money, lowering interest rates to protect risk takers. The strategy ensured successive, larger blow-ups in financial markets in 1987, 1991, 1994, 1998, 2001, and 2007.

• There are two superpowers in the world: there’s the United States and there’s Moody’s Bond rating service.

• Originally investors paid subscription fees for ratings information. Today, 90 percent of revenues are from issuers wanting to be rated.

• Harvard professor Eddie Riedl told his MBA class that “Accounting = Economic truth + Measurement error + Bias.” Accounting was now mainly “measurement error” and “bias”.

• Napoleon III: “We do not make reforms in France; we make revolution.”

• Sigmund Freud remarked that, “Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces”. The financial crisis was the reality on which the fake pleasure of the Great Moderation and the Goldilocks Economy was smashed.

• Greenspan’s Delphic obscurity and airbrushed history belied the fact that he wasn’t actually saying or doing much and had a term in office littered with mistakes.

• Greenspan’s genius was to grasp the need for an oracle to satisfy deep-seated longings for certainty and infallibility

• Keynes argued that models were weak expressions of conventional wisdom: “Like other orthodoxies it stands for what is jejeune and intellectually sterile; and since it has prejudice on its side, it can use claptrap with impunity”

• Keynes argued that “the difficulty lies not so much in developing new ideas as in escaping from old ones.” But as John Kenneth Galbraith realized, “faced with the choice between changing one’s mind and proving there is no need to do so, almost everyone gets busy on the proof.”

• (On Alan Greenspan’s selective amnesia about the events of Global Financial Crisis) He took the advice of author Gabriel Garcia Márquez: “What matters in life is not what happens to you but what you remember and how you remember it.”

• In the 1970s, Pierre Bourdieu, a French anthropologist, introduced the idea of habitus—how each society and culture orders its world subconsciously according to a cognitive framework based on its experiences. He argued that: “The most successful ideological effects are those which have no need of words but ask no more than a complicitous silence.”

• Sociologist Zygmunt Bauman’s metaphor of liquid and solid modernity captures the shift from a society of producers to a society of consumers.

• Finance and art share an abstract nature as well as constant debates about value and significance. Art was an expensive meta-object unrelated to anything else. It was self-referential, using itself as the point of departure and benchmark—it was the fact that it was an artist’s work that made it art. Modern money, too, was a meta-concept, capable of infinite expansion, circular and entirely trapped in its own ambiguous reality.

• The centerpiece of Soros’ philosophy is the idea of reflexivity. Markets do not tend toward equilibrium but feed on their own misconceptions to produce exaggerated price changes until they reach an inflection point when it changes. Soros suggests following the trend, selling as it reaches the peak.

• Iceland’s Kaupthing Bank, Landsbanki, Glitnir and the Central Bank were awarded the Ig Nobel Economics Prize, recognizing their work on how small banks could be transformed rapidly into big banks and vice versa. The Ig Nobel Mathematics Prize went to Gideon Gono, governor of Zimbabwe’s Reserve Bank, for printing bank notes with denominations ranging from 1 cent to 1 hundred trillion dollars to help Zimbabweans cope with hyperinflation.

• Keynes is always the economist for a crisis, providing desperate governments with the intellectual basis for massive and dramatic fiscal stimulus.

• When the facts are on our side, we pound the facts; when theory is on our side, we pound theory; and when neither the facts nor theory are on our side, we pound Keynes.

• Botox Economics: while the global financial crisis rolled on, a flood of money from central banks and governments, covered up unresolved and deep-seated problems. The prevailing thinking was from Will Rogers: “If stupidity got us into this mess, then why can’t it get us out?”

• “A bubble is a rising market that one is not invested in; if one is invested, then it is a bull market.”

• With rising inflation eating away savings earning low interest rates in banks, the Chinese who could afford to bought up property, betting that the government would ensure that real estate prices would keep rising. This was the “Wen Jiabao put”, consciously referring to the famed “Greenspan put”.

• Regulators and economists, who contributed to the crisis, offered solutions, confirming Goethe’s observation: “There is nothing more frightening than ignorance in action.”

• Regulators and legislators held educational sessions with banks and economists, ignoring author Thomas Pynchon’s warning: “If they can get you to ask the wrong questions then the answers don’t matter.”

• When the housing bubble collapsed, the American satirical magazine The Onion demanded that the American people be given another bubble to invest in.

• There are similarities between the financial system, irreversible climate change, and shortages of vital resources. In each case, society borrowed from the future, shifting problems to generations to come. In the end, you literally devour the future until eventually the future devours you.

• The law of unintended consequences is what happens when a simple system tries to regulate a complex system. The political system is simple. It operates with limited information (rational ignorance), short time horizons, low feedback, and poor and misaligned incentives. Society in contrast is a complex, evolving, high-feedback, incentive-driven system. When a simple system tries to regulate a complex system you often get unintended consequences.

• As John F. Kennedy knew: “The greatest enemy of the truth is very often not the lie—deliberate, contrived, and dishonest—but the myth, persistent, persuasive, and unrealistic. Belief in myth allows the comfort of opinion without the discomfort of thought.”

[diffsoft]

@Apurva_Dubey thank you and very well summarized for one unfamiliar with this.

Can you also give like a score out of 10? Helps decide whether to stick with the summary or go ahead and buy/read.

[Apurva_Dubey]

@diffsoft Thanks – for me this one is a 10/10 (unputdownable). The book has so much breadth that it’s hard to knead it into a summary – these notes don’t do justice to the book – will highly recommend reading it.

[valuetortoise]

As one would expect from Morgan Housel, the book is very easy to read. It touches on some of the constants in life that may persist for decades and centuries to come. Of course, to understand the future, we often look to the past, and Housel does the same.

If you have read a fair share of/about Taleb, Munger, Naval, Kahneman, etc this book may not present many ‘new ideas.’ However, the way it’s written, and the approach Housel has taken—drawing from multiple disciplines to support his points—is commendable.

I don’t think the book needs a summary, as it’s that easy to get through. Instead, I thought I’d share three ideas/quotes that I liked.

A world of chance

“Some of the biggest and most consequential changes in history happened because of a random, unforeseeable, thoughtless encounter or decision that led to magic or mayhem.”

Housel gives both personal and historical examples to make this case. Consider this one - In a bid to save some money, Captain William Turner deactivated the fourth boiler room on his steamship, for its journey from New York to Liverpool. This would mean that they would still reach Liverpool but a day later. The resulting delay placed the ship directly in the path of a German submarine, resulting in the deaths of nearly twelve hundred passengers. This event played a significant role in rallying U.S. public support for entering World War I. Had the fourth boiler room been operational, the ship would likely have arrived in Liverpool a day earlier, potentially avoiding the submarine encounter and altering the course of history.

I couldn’t help but think about this image by Tim Urban.

Why the world may seem crazy

‘With a large enough sample, any outrageous thing is apt to happen”.

“That’s part of why the world appears so chaotic, and why seemingly extraordinary events occur with surprising frequency. With roughly eight billion people on the planet, an event with a one-in-a-million chance of happening daily should affect approximately eight thousand individuals each day, totalling 2.9 million occurrences annually, and perhaps a quarter of a billion times over one’s lifetime. Additionally, considering the news media’s relentless pursuit of sensational headlines, it’s nearly certain that you’ll hear about these events when they unfold.”

A good idea on steroids quickly becomes a terrible idea
In this chapter Housel touches on how most things have an ideal state and things often break when we try to scale them to a different size or speed. (Scale by Geoffrey West is a brilliant book touching on some of this)

He presents an interesting chart in his discussion of financial markets, showcasing the probabilities of a positive return in the US market over various time frames, drawing from more than a century of data. Basically its reinforcing the idea that the odds of making money in the market increase as we spend more time in the market. I just liked how he presented this data and so I attempted a similar analysis for the Indian market.

The book has 23 chapters. Each chapter is different and makes a distinct point. It’s an easy, quick, and insightful read.

[goofymanager]

Thanks for this nudge to read Housel’s 2nd book (hopefully soon).

I had a quick (maybe a stupid question) - US market data shows an 80% chance of making a +ve return if one is held for 5 years while it’s 88.61% as per your data from the IND market.

Is there any particular reason there are >10% higher chances of a +ve return if one holds for 5y in IND than the US?

Another way to put is there’s a 2x higher chance of making +ve return in IND than the US (5y in IND vs 10y in the US).

PS - hopefully, I’m interpreting the data points correctly.

[valuetortoise]

Not sure why the 8% difference but I would put more faith in the US data cause that goes all the way back to 1871. So it includes the 1929 great depression and other economic downturns. The Sensex data I could get was from 1986 so its not enough compared to the US data.

More then the exact number I was interested in the general trend which held, but yes I would assume the 88% would drop if we had data going back for India too.

[abhishek_sinha]

Skin in the Game - N N Taleb

This is a thought-provoking book that explains the concept of skin in the game. He argues (and rightly so) that those who have a personal stake in the outcomes of their decisions, i.e. skin-in-the-game are more likely to act rationally, responsibly, and ethically.
Taleb masterfully connects the dots from disciplines such as economics, psychology, and history. Nevertheless, some analogies are difficult to comprehend. Certain sections explore religious contexts, which I would avoid as they are beyond my competence.
Talab’s original thinking is clear, as is his strong views and abrasive tone. He categorizes the majority of economists, policymakers, and behavioural psychologists as Intellectual Yet Idiots (IYI). A single chance to attack them has not been missed by him. IMO, he takes matters a bit too personally. Personal attacks on some authors such as Steven Pinker and Richard Thaler could have been avoided.

Highlighting some key ideas and lessons learned from the book.

Via Negativa

• We know what is wrong with more clarity than what is right.
• Knowledge grows by subtraction.
• Time removes the fragile and keeps the robust (Recommended read: What I learned about investing from Darwin by Pulak Prasad).
• Skin in the game makes boring things interesting, like an accountant reading notes to accounts and an air-hostess checking gates before taking off.
• Be wary of financial journalists and stock tippers. “Don’t tell me what you think, tell me what you have in your portfolio”. To further extend this notion: how much of your net worth is in the stock/business you’re advertising.
• Understanding behaviour of tribes/groups requires understanding of interactions between the tribe members. A group of 10 people won’t behave like a group of 5. Ant colony IS NOT the sum of individual ants. The market’s behaviour IS NOT average of behaviour of individuals.
• Stock Market is like a movie theater with a small exit door. A single stubborn seller can cause the market to decline disproportionately. E.g. Société Générale’s stubbornness led to 10% crash in 2009.
• The Hammurabi code is considered a true skin in the game. “If an architect builds a house and it collapses, the architect should be executed.”

Skin in the game

• Reading biographies of successful people written by journalists or content writers is a waste of time. Makes sense? If you want to learn about banking, who should you deeply read/listen to - Deepak Parekh / Uday Kotak or a talking head on CNBC who has owned 500 stocks in his 25 years of ILLUSTRATED career?
• A life coach can teach you to become a life coach. S/he can’t make you a lead a better life.
• Entrepreneurs (excluding hyper-funded), plumbers, blue collared workers, restaurant owners/workers add more value than IYI.

Intellectual yet idiot (IYI)

• Economists and bureaucrats, IYI don’t understand complex systems because interactions matter more than the nature of the individual units.
• Pretends to understand complex systems, but fails miserably (suggested read: Pretence of Knowledge by Hayek).
• Expects others to behave in a certain way without understanding that his understanding is flawed, not people’s behaviour.

On wealth / getting rich and success

• Bigger home ≠ happiness; Bigger home without folks = loneliness.
• Non-linearity of progress: Sophistication beyond a level causes degradation. More comfort for your kids will make them fragile and spoilt.
• Success ≠ Money earned without skin in the game.
• Success ≠ Money earned through passive investing, rent-seeking.
• Success ≠ Leading an honourable life.

Lindy effect + Via Negativa

• Fragile has asymmetric response to volatility. Fragile will experience more harm than good.

---

Investing maxims that I TRY TO follow and could relate from this book. Some of these are my strong and biased opinions and not to be construed as recommendations.

Via Negativa

• You don’t have to be smarter than others to get decent outcomes, being less stupid will do just fine.
• Don’t swing for the fences, especially when odds are not in favour.
• Don’t buy something that you don’t understand.
• Don’t buy fragile businesses.
• Don’t believe in everything you buy. Something will always go wrong. Max exposure to a single stock - 20%.
• Avoid tail risks.
• No to businesses that don’t pass forensic checks.

Knowledge grows by subtraction

• One doesn’t need too many ideas. As Munger said, “Take a simple idea and take it seriously”. Deep learning (reading, rereading the works of real experts with scars and skin-in-the-game) is far more impactful and valuable than shallow reading of 500 books.
• Beware of barbers who decide to perform brain surgery: shallow knowledge brokers, some economists with no skin-in-the-game, talking heads on Bloomberg/CNBC, sh!tfluencers etc.

[Malhar_Manek]

Most people know Claude Shannon – if they’ve heard of him, that is – as the father of the information age. That is, in my opinion, a big understatement.

Here are my learnings from Jimmy Soni and Rob Goodman’s brilliant biography of Shannon, “A Mind at Play”.

By being well-versed with both Boolean algebra and electronic circuitry, Shannon was able to cross-pollinate ideas between these fields. A series connection is akin to the AND operator, while a parallel connection is akin to the OR operator.

Shannon spotted and articulated the isomorphism (as “Gödel, Escher, Bach” fans would call it) between equations in symbolic calculus and physical circuits – an act that may possibly have been inspired by his mentor Vannevar Bush’s synthesis of math and engineering in the differential analyzer.

“In these days, when there is a tendency to specialize so closely, it is well for us to be reminded that the possibilities of being at once broad and deep did not pass with Leonardo da Vinci or even Benjamin Franklin.”
– Vannevar Bush

Is it any surprise that Shannon wrote his PhD dissertation on…genetics? In fact, it was about genetic algebra!

Shannon viewed information as messages not sent – a fascinating case in figure v/s ground. His equation expressed information (H) as a probabilistic function (p and q).

H = – p log p – q log q

This has many parallels to cryptography, for instance how the easy to anticipate “Heil Hitler” at the end of every German message helped the Allies crack Enigma, by pruning the search tree.

This work primed Shannon to discover insights into the redundancy of language – how redundancy facilitates error detection and correction in languages.

The one trait underpinning all of Shannon’s work was his playful curiosity. He experimented with juggling, winning at Roulette through wearable computers (with the great Edward Thorp, interestingly) and much more.

This reminds me of the philosophy of playfulness v/s seriousness in James Carse’s “Finite and Infinite Games”. Here’s what I wrote in an email to the authors: “…’To be serious is to press for a specified conclusion. To be playful is to allow for possibility’. Given the formulation of information as the resolution of uncertainty (H = - p log p - q log q), it seems like being playful is being information-rich. Perhaps Shannon’s playfulness wasn’t just a coincidence but had something to do with information theory…”

Rob Goodman very kindly wrote back: “That’s a really insightful connection between the ideas of playfulness and information theory. It makes sense to me, and I wish we had thought to make that connection in the book!”

Not only is the subject matter of the book an individual I immensely admire (Claude Shannon), it is written exceedingly well too! An absolute page-turner. Most certainly among the very best books I’ve read, and one that I would most highly recommend. 11/10