Multi-Disciplinary Reading - Book Reviews

[phreakv6]

Mastering Megatrends, Doris & John Naisbitt, 2016 - This book was disgustingly pedestrian for the most part, except for the parts on China’s OBOR and Mastering Thought Chapter, both of which came in the very end of the book. It was however refreshing to see a stance on China that is unlike what we see and hear in the mainstream media. This is probably the only book I have read that doesn’t appear to have been even proof-read once. There were over 100 typos in the book which was shocking.

It has a take on new global leadership (China), globalization, social media and its influence in politics, Africa & Latin America’s progress and where they can get to, trade war and America’s mis-steps, dead EU Zone, women in the workplace and so on - Unfortunately none of these were fascinating insights. The good part though was that a lot of the verbal cabbage was backed by numbers, which was useful.

I would however highly recommend the two chapters I mentioned before. The one on OBOR (One Belt, One Road initiative) describes the psychology behind China’s moves and why it is far beyond what the media envisages (from new colonialism, large investments which will never payoff, spread of communism and so on). They appear to be more Capitalist in their risk-taking than the evangelists of Capitalism, more embracing of the world and its cultures (China trains its people to negotiate with partners in the local language, for eg.) and more inclusive (of its partners) in its growth ambitions. There was a chart showing world powers from 1AD to 2000AD and how what has happened in the last 150-200 is more of an aberration and China is merely setting things back to the way they have always been.

The last Chapter on Mastering Thought was also very good as it talks a lot about importance of not wanting to be right, drawing a lot from Einstein. “Real knowledge is to know the extent of one’s ignorance” (Confucius, 5 BC). The idea being that wanting to be right impedes our learning and progress the most. These two chapters can be read as long-form articles without bothering much about the rest of the book. 7/10

[asarun]

Nice review, I just finished the book and like you said, it’s an illuminating history. That said, I think he downplays the risks and the boundaries of illegality they may operate in sometimes. For both macro funds and event-driven funds, it is hard to imagine they don’t get their edge from some sort of insider information. Also, the risk of derivative driven blow-ups is real and huge (given the volume of assets they now manage) - it may be so that they don’t get a tax-funded bailout, but the impact of their crashes on broader markets can be considerable. LTCM may not have got a bailout, but it’s hard to imagine that many ordinary investors weren’t singed by the LTCM episode. Statistical arbitrage funds are less problematic, but I doubt there will be so many of them, if not for excessive liquidity due to loose monetary policies and all manner of creative derivatives.

[phreakv6]

The Theory of Investment Value, John Burr Williams, 1938 - The initial few chapters in this book are gold. I liked the way the distinction between Investor and Speculator are drawn. Investor is one who holds a stock for the income (dividends) while a speculator is interested in resale price of the stock. The author discusses all the machinations that move the price, from orders, business volumes, interest rates and so on but irrespective, the one that sets the price is the most optimistic non-owner and the least optimistic owner and so the market rate will always reflect an expression of opinion than a statement of fact. Also liked the way in which he describes the way in which marginal opinion of one stock is affected by the opinion on other stocks too.

There is also a well-argued piece on how supports and resistances work and the psychology behind it and how successful speculation needs no knowledge of intrinsic value but just a view on what people believe intrinsic value to be. So a speculator is only interested in foretelling changes of opinion while an investor must be interested only in foretelling changes in dividends. I found that thought extremely elegant.

I have often tried to model variables like money supply, volumes of trade and price levels with equations from physics like the equations for momentum and acceleration so found this thing called fisher’s equation (MV = PT) described in the book (quantity theroy) very interesting. This will not apply however to stocks as it does to good and services because the quantity of money is not the only necessary parameter that affects the price of stocks.

The equations make their appearance when the author starts to elaborate on the Dividend-discount model and from then on, the mathematical inclinations of John Burr Williams come to the fore (this was his Ph.D thesis). I absolutely enjoyed all the modeling he had done although the typesetting for the equations made it very difficult to read. Another important concept in the book was the law of conservation of investment value (physics envy indeed). There is also an in-depth discussion on Marketability of a stocks vs its intrinsic value (Liquidity factors). Cheapness due to saleability or lack thereof, the author rightly opines is as irrelevant to intrinsic value as marginal opinion is.

There are a lot of scenarios discussed and models for valuations of the same from stocks without growth, stocks with growth, growth expected, stocks with declining dividends, discussions on reinvestment, net-quick assets and so on. Similar work is done for Bonds as well and then the effect of taxes (capital gains, income tax, corporate tax, property tax), wages, interest rates, inflation, govt borrowing etc. discussed in great depth in terms of how they affect the instrinsic value of stocks (all about dividends). Second half of the book has several case studies of utilities. The one I liked the most was on Phoenix Insurance. Can’t say I grasped everything in this book which leaves the door open for re-reads in the future. 10/10

[fabregas]

From Third World To First - Lee Kuan Yew

This is an autobiography of Lee Kuan Yew, who was the Prime Minister of Singapore from 1959 to 1990 (~30 years).

My take on this book

In today’s political discourse, terms like authoritarian, suppression of freedom of speech, suppressing the media, black day in democracy etc. are used freely by political opponents & media alike. This book gave me a perspective of things from the point of view of a Prime Minister and taught me how one has to make difficult and some times unpopular decisions in the greater interest of the nation. Also, the leader must always do the right thing, without caring about their perception, popularity, opinion polls etc.

Singapore’s journey

Singapore is known for its stability, growth, and prosperity. It is one of the richest countries on the planet. However back in the 1950s, few gave Singapore a chance of survival. A tiny nation of ~ 650 sq. km. with no natural resources, Singapore went through some hard times.

Singapore was not a natural country but man-made one, a trading post the British had developed into a nodal point in their worldwide maritime empire.

1. British Colony
2. War with Japan (1942)
3. Brutal Japanese Occupation (1942 to 1945)
4. 1945 to 1962, British regain control, but there some uncertainty about the British leaving Asia, putting tiny Singapore’s territorial sovereignty in doubt
5. 1962 to 1965, Singapore becomes an autonomous state of Malaysia
6. 1965 Singapore leaves Malaysia, becomes an independent country

Lee Kuan Yew presided over a turnaround in the economic fortunes of his nation, taking it from a colonial backwater to its status as one of the richest places on the planet.

Influence of Confucianist Values

Individualism - the West v/s Lee Kuan Yew’s Policy

It is evident that Lee Kuan Yew is strongly influenced by Confucian values. Confucian values, as he explains place the interests of the community higher than those of individuals. This he believes is one of the greatest differences between the Eastern and the Western civilizations.

Dealing with the communists with an iron fist

The values do not just explain Yew’s strong attachment to his own family. They permeate every aspect of society. For example, Yew defends his decision to retain detention without trial in the laws of Singapore on the basis of Confucian values. He explains that according to Confucian values, he had a responsibility to place the interests of the community above those of the individual. He accordingly had to act firmly against communist subversives against whom it was impossible to get anyone to witness against in open courts.

Importance of order, hard work & respect for elders

Another of the Confucian values that he emphasizes is the importance of order. He believes that freedom, as propagated from an American viewpoint, leads to the breakdown of public order and this is evidenced by the widespread use of drugs, gun violence, use of vulgar language in public, consumerism, and vagrancy as seen in American societies.

In contrast, the Confucian doctrine teaches a culture of hard work, thrift, and respect for elders and “for scholarship and learning”.

He explains that to preserve the people’s moral and social values, the government had reinforced the inherited values of honesty, respect to parents, hard work and thrift, and loyalty to country and friends. They had as well punished the “dark side of Chinese Confucianism” namely nepotism, favoritism, and corruption

Anti-Corruption Agenda

In 1960, courts were allowed to treat proof that an accused was living beyond his or her means or had property his or her income could not afford as corroborating evidence that the accused had accepted or obtained a bribe.

The Corrupt Practices Investigation Bureau (CPIB) was empowered gradually, particularly through legislation, that gave powers to investigators to arrest, search and investigate bank accounts, bankbooks of suspected persons, their children, their wives and their agent.

These are some of the unique features of Singapore’s anti-corruption laws, pioneered by Lee Kuan Yew. This is quite in contrast with the Western laws where the burden of proof lies with the prosecution.

Unpopular decisions & controversies

Lee Kuan Yew was known for not giving a damn about his popularity or opinion polls or criticism by the media. This is evident in many of his decision, unpopular at the time, but in the long term interest of Singapore. Here are some of the examples:

Education

Singapore is a multiracial and multicultural country:

1. Mandarin-speaking Chinese(76%)
2. Malay-speaking Malays, (15%)
3. Mostly Tamil-speaking Indians (7%)

Singapore has 4 official languages - Malay, Mandarin, English and Tamil.

Singapore’s leaders realized the need to promote English medium schools considering that Singapore would become a major international trading centre. This was however politically expedient with many Chinese parents arguing that their children should get educated in Chinese so that they don’t lose their identity.

Yew campaigned for the prominence of English language because it would be the best neutral alternative to the three mother tongue languages that were used in the island namely Chinese, Malay and Tamil.

He met great opposition when he tried to have a Chinese language university, Nanyang University adopt teaching in English. The problem was however solved when Nanyang University was merged with the English language Singapore University. The damage had however been done for thousands of Nanyang university graduates who would experience difficulties when trying to look for jobs in a market that had grown to value English language dearly. The irony of the whole English-Chinese debate is the fact that Kuan himself thought that children educated in Chinese exhibited greater “vitality, dynamism, discipline and social and political commitment.” Those educated in English on the other hand, portrayed “apathy, self-centredness and lack of self-confidence.”

To preserve the best aspects of the Chinese schools, Kuan preserved the best nine Chinese schools under a special program in which English was taught alongside Chinese.

Marriage

In 1983, it occurred to the Prime Minister that many of the educated women in Singapore remained unmarried with men choosing to marry women who were less educated than themselves. The Prime Minister made this discovery when perusing through the report of the 1980census. He also discovered that more educated women were getting fewer children compared to their uneducated counterparts.

In a televised address to the nation, Yew challenged the young men to consider marrying persons of equivalent intelligence and training. He argued that if they hoped to raise intelligent children, it was important that they consider intelligent spouses, saying that intelligence is more of a factor of nature and not nurture.

This debate brought a stronger backlash than he had anticipated.Graduate women were angry with him for having highlighted their plight. Uneducated women and their parents were angry with him because he had dissuaded graduate men from marrying them. In the elections coming in 1984, PAP lost 12 percent of the vote as a result of this debate. This however did not deter Kuan Yew from placing social facilities where the government modified the role of the traditional match maker to meet the demands of the modern times.

Curbs on Newspapers

Lee Kuan Yew was of the belief that the press was only as free as it needed to be to serve Singapore. He made sure that only he and his government could set the agenda for Singapore, not the press. Here is a link to his speech on press freedom.

LKY's brilliant reply on free press

Yew accused many English & Malay newspapers of being blatantly biased against and very critical of PAP (Yew’s political party). He believed that many of them were working for British, American or Chinese interests. The government setup investigation teams and exposed many Chinese, Malay & English newspapers when they took funds from foreign governments. The government then declared a policy of not allowing any foreign ownership of newspapers.

In 1986 the govt. enacted laws to restrict the sale and distribution of foreign publications that had engaged in the domestic politics of Singapore. A test to determine this was - if the paper published something, which the govt thought was untrue of erroneous, then they were obliged to print the govt’s reply on the topic. Failing which, curbs on number of copies would be enforced.

Kuan Yew also explains how he weathered the fury of the western press with regard to his firm belief that “newspaper owners had the right to print whatever they liked.”

Dealing with adversaries & foreign ideologies (mostly China & US)

Yew explains that in all political confrontations, he had two considerations to make when dealing with opponents: First, he would check whether they were operatives used by communists to destabilize Singapore. The other consideration would involve checking whether the involved were sponsored by foreign agencies to propagate foreign ideology in Singapore.

Yew gives a blow-by-blow account of how he managed to break the domination of communism in Singapore long before the collapse of the same in the Soviet Union. He then narrates the story of Francis Seow, a former solicitor general; whom he believed was sponsored by the United States through a counsellor in the US embassy to lead an opposition group. Seow had gained influence through the Law Society of Singapore. Yew explains how he exposed the schemes of Seow and how he (Seow) eventually took up political asylum in the Unite States. He also raised protestation to the US over involvement in local politics, an issue that the US chose not to follow through.

This is just one of countless examples detailed in the book.

Detention without trial

Similar criticism came from western governments regarding his human rights record especially with regard to his views on detention without trial.In all these controversies, Kuan Yew stands to show himself a courageous fighter who subordinates his conviction to nothing. That should be explained by his unapologetic assertion that “If this is a nanny state, I am proud to have fostered one.”

Public Housing Program & forceful urbanisation

By the 1950s, Singapore struggled to accommodate wave after wave of immigrants who settled there, growing haphazardly until Raffles ordered up its first proper urban plan – with gridded streets, commercial zones and ethnically segregated residential districts – in 1822.

Lee established the mighty Housing and Development Board (HDB) in 1960, the division of the Ministry of National Development charged with building public housing. It immediately began putting up 10 to 15-storey tower blocks, adding more than 50,000 units of housing to the city within the first five years of its existence. Today, more than 80% of Singapore’s population live in HDB buildings

First, though, the HDB had to tackle the issue of 240,000 squatters, many of them migrants from Malaysia, who had appeared in Singapore during the 1950s. Many of them were farmers living with livestock (pigs, sheep etc), living in rural areas strewn across Singapore. Lee’s govt. forcefully moved them to the urban housing apartments (built by HDB), against the wishes of the people. Lee deemed this necessary if Singapore was to attract industry, provide them with land for offices & factories and move the economy from a agriculture driven one to an industrialized one.

[fabregas]

@phreakv6 Any recommendations for tools for taking notes while reading books?

[phreakv6]

@fabregas - I have started using a highlighter lately. Nothing more fancy. Sorry, I didn’t see your post earlier.

Zurich Axioms, Max Gunther, 1972 - This is a very practical book on speculation and busts some of common myths on the art and summarizes it into 12 major and 16 minor axioms.

Here is some of it from my notes.

On Risk - Worry is not a sickness but a sign on health

All investment is speculation. The only difference is that some people admit it and some dont

Always play meaningful stakes

Resist the allure of diversification - If you have just a few speculations going and one of two turn sour, you can take defensive action. Three good speculations, maybe four upto six is sufficient. (I have very, very strongly believed in this, at least in the market as it existed until Feb. Current market though, I think needs longer term outlook and diversification - Its like paying sticker price vs shopping in a discount book store. Things have changed)

On Greed - Always take your profit too soon (I think this depends on market conditions)

That which hurts, teaches

Decide in advance what gain you want from a venture - when you get it, get out. Decide where the finish line is, before you start the race

On hope - When the ship starts to sink, dont pray. Jump

Accept small losses cheerfully as a fact of life

On Forecasts - Distrust anyone who claims to know the future, however dimly

If you can’t forecast right, forecast often

A seer who enjoys a few years of frequently right guesses will attract an enormous following - so big a following, in some cases, that the seer’s prophecies are sometimes self-fulfilling.

On Patterns - Chaos is not dangerous until it begins to look orderly

Historians Trap, Gambler’s fallacy, Chartist’s Illusion, Correlation and Causality delusions

On Mobility - Avoid putting down roots. They impede motion

On Intuition - A hunch can be trusted if it can be explained (Never confuse a hunch with a hope)

On Religion and the Occult - It is unlikely that God’s plan for the universe includes making you rich

On Optimism and Pessimism - Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.

On Consensus - Disregard the majority opinion. It is probably wrong

On Stubbornness - If it doesnt pay off the first time, forget it

On Planning - Long-range plans engender the dangerous belief that the future is under your control

These are fantastic insights for a trader/speculator and may run contra to someone who considers himself a long-term investor. I think there are some which are useful to both as a lot of it is just common sense. Its fairly light, easy and humorous read. 9/10

[phreakv6]

Game Theory, Pastine/Humberstone, 2017 - If you were ever looking for a primer on Game Theory or if you tried your hand at learning and got bogged down by all the math associated, I highly recommend this book. It covers all that’s essential from backward induction, strategic interactions, rationality and common knowledge of rationality (You are rational, I am rational but you must know that I am rational and I know that you know that I am rational), Keynes beauty contest and the logic behind rational opinion and average opinion (what average opinion thinks average opinion will be) which is the primary cause of expensive stocks getting more expensive and the most important concept of bounded rationality.

My favorite and arguably the most useful concept in Game Theory is Prisoner’s Dilemma (and Tragedy of the commons) because of the diverse range of topics it can be applied to. It is covered fairly extensively here and in the most lucid form I have come across in terms of explaining Payoff Matrices, Nash Equilibrium, Pareto Efficiency etc and how seemingly disconnected things like Morality, Co-ordination, Co-operation etc can drastically improve payoffs for everybody (explains the formation of so many global instituions in the last 50 years, after Game Theory went mainstream).

Evolutionary game theory (hawks and doves) is something I first came across in Richard Dawkins’ ‘Selfish Gene’ and I was absolutely blown away by it. The way equilibrium is maintained in the environment and the reason why things never get completely out of hand and an equilibrium is always reached is a useful mental model to have. Asymmetric information and the problems related to it and the solutions that businesses usually come up with (Advertisements, warranties) and the signaling involved is a very useful construct too.

Towards the end of the book, there is a small part on non-transitiveness of our decision-making (We may like A over B and B over C and not A over C) and how dictatorships do better than democracies (Arrow’s Impossibility Theorem) which I thought was very relevant in current times. The examples given, of currency speculation, nuclear proliferation, roommate problem, chicken game, exit game, microcredit etc. are very simple to follow and there are illustrations on every page which helps a lot to break the monotony. While a book like ‘The Art of Strategy’ is without a doubt a better book on the subject, a small book like this sometimes explains concepts better in a fashion that absolutely sticks. 9/10

[phreakv6]

How to create a mind, Ray Kurzweil, 2012 - While this is a seminal work in the field of AI, the reason it is so fantastic a read is its ability to blend multiple disciplines, from biology, biochemistry, neurology, anthropology, physics, math, philosophy, computer science and epistemology and the grace with which Ray moves across disciplines, like the borders simply didn’t exist. Ray Kurzweil isn’t an academic but an inventor/entrepreneur (speech recognition behind Siri, for eg.), so his writing focuses more on the technology than theory (techne vs episteme).

The basic premise (and a verified fact) is that the brain is self-organizing, hierarchical, with pattern recognizers that fire both up and down the layers (As you read APPL, you anticipate a E) and in that way, though the brain is complex, it can be reduced to a basic unit of learning which repeats. Consequently, bulk of Machine-learning in the last few years has been based on the HHMM networks (Hierarchical hidden Markov models) with some form of evolutionary genetic algorithms to let the best network topology evolve on its own.

Ray speculates that the human brain is now evolving into building a brain outside its neocortex which is not constrained by evolution (it took us couple of million years to evolve the frontal lobe), and this brain resides in the cloud and will take over more and more of human brain’s functionality and this is exactly how it is playing out. He also speculates that singularity isn’t very far from where we are and proceeds to dissect the human consciousness with thought experiments - this part was an absolutely fascinating to read.

Another section in the book that I absolutely loved was “the old brain”, which simplifies the brain functionality to its very basics, from the sparse-coding involved in our visual cortex (we reduce images to edges and hints and rest of the visual richness is just reconstructed by the brain), thalamus and its role in “directed-thinking”, the weakness of our working memory, hippo-campus and its ability to see if a memory is novel enough to retain, cerebellum and its role in predictions (be it with movement, or anticipating actions of others) and the amygdala and its role in emotional response.

When we think of the brain, we think of a rational-brain, we think of the neocortex, but we have several remnants from the reptilian brain (fear responses) and the mammalian brain (emotional responses) that impedes us from being the pure-thinking beings we aspire ourselves to be. There were some interesting experiments on how our brain perhaps makes the decisions first, even before we become aware of it, though we believe we made the decisions as rational beings and so proceed to justify them.

The book ends with the law of accelerating returns (LOAR), which speaks of the exponential nature of growth in the field of AI and simulating the brain, arising primarily from several exponential components like the Moore’s law (increase in computing), Cooper’s law (increase in communication), decrease in costs and increase in hierarchical thinking. There is an interesting bit about why exponential thinking doesn’t come naturally to us, as we use linear predictors in the brain. Ray has made several predictions in the past, right from the 80s and he has a phenomenal success rate in them, so when he says that a machine will beat the Turing test by 2029 and that by 2045 human brain will be hybrid with both biological and non-biological intelligence, we must sit up and take notice. Needless to say, this book is a must read. 11/10

[phreakv6]

What I talk about when I talk about running, Haruki Murakami, 2007 - The title of the book is a take on Raymond Carver’s (another one of my favorite writers) ‘What we talk about when we talk about love’ (excellent collection of Carver’s shorts). Murakami is a writer almost all of whose works I have read, including this one. Since my mind hasn’t been into fiction (enough in the balance sheets and the business models), I haven’t been able to read any in the last few years. This work is almost autobiographical, although its about running. I wanted to re-read some Murakami which wasn’t fiction and wasn’t an essay (he has a few of those) and was a book (which I had), so well, this was the only choice I had. Murakami calls himself the running novelist - fitting title, as he had run 25 marathons, one every year for 25 years when he wrote the book.

There were some parts in the book that were stuck in my head from my first read - of all the hardships and toil he goes through, to prove a point to no one but himself, year after year, in rain and sun, across countries and continents, despite his tight schedule and how he relates that to his writing - as he claims he doesn’t have a natural flair for it, he has to toil and dig until he finds a rich vein of words that spillforth. It is a quick, and somewhat motivating read as it is filled with his inadequacies and how he overcomes it with nothing but his persistence. It is part philosophical as well, without being overbearingly so. He voices his running thoughts, in the cadence of a jog along a beautiful river and you are bound to feel like a fellow runner listening. 8/10

[phreakv6]

Stocks for the long run, Jeremy Siegel, 1994 - Author makes a very strong case for equities using long-term stats and history of over 100 years.There are a lot of books that are good at one thing or two - say valuation, or stock-picking or behavioral finance but this one I thought was a well-rounded book as it covers everything you will ever want - from history of crashes and causes, how economy and markets interact (makes a strong case from history why they are decoupled with a lag of 6 months on avg.), how bond markets work and how they compare with equities, concept of risk and ways in which to objectively quantify and measure it, portfolio construction, how stock indexes and ETFs came about and so on.

The different kinds of indexes from value-weighted, market cap weighted, free-float weighted and the most interesting of all that I found here - fundamentally weighted (earnings weighted), sector rotation, impact of various taxes, what creates shareholder value and the numerous ways in which to measure them and various strategies that outperformed the market historically (spoiler: Everything reverts to mean).

There is also a detailed discussion on how macro-environment affects stocks - from gold, inflation, currencies, devaluation, fed policies etc. - everything argued with stats and history. There’s a detailed discussion on volatility, even technical analysis from Dow Theory, using moving averages, trends and momentum investing. This book really is the complete package as it dispassionately observes and covers a phenomenal amount of content - all of which matter. There is a short section on behavioral and psychological aspects, which borrows a lot from Kahneman’s work understandably. It is thoroughly enjoyable and provides a great map to navigate current crisis. 10/10

[phreakv6]

The Basic Laws of Human Stupidity, Carlo M. Cipolla, 1976 - Who’s stupid? Someone who harms others, with no gains to self - That axiomatic definition alone is worth the price of the book. This group of people, according to the author, are more powerful than the mafia, military industrial complex or communism, all put together, as they can cause more harm with no chief, nor president or laws and yet each member powerfully contributes to strengthen and amplify the effectiveness of others in the tribe. It is impossible to organize a rational defense against an attack of stupidity as the attack itself lacks any rational structure.

The probability of a certain person being stupid, is independent of other characteristics. There is always the same percentage of people who are stupid, irrespective of the size of sample, group or population (it is scale invariant!). What might this percentage be? It will be a value that will surpass your expectations.

With me still? Good, because you cannot miss this technical interlude.

I liked the classification of helpless/intelligent/stupid/bandit based on the quadrants above where intelligent adds gains for himself and others, stupid harms others with no gain or even some loss for self, while bandit gains from others’ loss and helpless act to add gain to others.

In ‘Stupidity and Power’, the author argues that general elections are a most effective instrument to ensure the steady maintenance of fraction of stupid people among the powerful. This way, elections offer a great way to stupid people to ensure they harm rest of the population while gaining nothing for themselves.

If members of a society were bandits, there would only be wealth transfer from one section to another but when a society is filled with stupid, the whole society is impoverished. In a society going downhill, bandits takeover power and society becomes overall helpless and goes to hell. That’s pretty much the book. I am unsure if its a work of satire or intellect and that to me is excellent. 9/10

[phreakv6]

Lords of Finance, Liaquat Ahamed, 2009 - This is a book I loved tremendously. I am not a history person, nor am I a biography person but this book made it very interesting in its portrayal of people and events that were of great significance to the world i.e the bankers, politicians and economists, their actions and non-actions, biases and orthodoxy that led to the 1929 great depression.

The primary characters were Montagu Norman of the Bank of England, Benjamin Strong of the Fed, Emile Moreau of the Banque de France and Hjalmar Schacht of the Reichsbank. It clearly must have taken years of research poring over thousands of documents to build the sort of portrayal of these characters that the author has built. Since the author was an investment manager, there is a lot of precision in the accounts - the narrative he has built is strong and easy to grasp as a consequence.

One of the mental models I strongly cherish is the one I got from the book ‘Ubiquity’, on upheavals and the connectedness of events separated far apart in time. Here too, though the great depression happened in 1929, its seeds were sown in 1914 when WW1 broke out. When Germany lost the war, they were asked to pay reparations to the tune of several billions, which would be trillions in today’s dollars (they were nearly insolvent from the war). The Allies - i.e France and UK had largely financed their war via loans from the US. The US entered the war in the very end in 1918 and so didn’t lose much - in fact it gained substantially by financing the war as well as shipping goods like foods, clothes and ammunition to Europe.

As a consequence, bulk of the world’s Gold, ended up in US post the war (From having 40% of reserves to 75% of reserves). Since currencies then were backed by Gold, at least pre-war, they all, especially Britain felt the urge to return back as the financier of the world and that meant restoring the pound sterling back to the Gold standard. Having lost a lot of Gold reserves, it meant deflation. France meanwhile chose to devalue. Deflation and devaluation can be seen as - say you have gained weight - deflation would be losing weight while devaluation would be stitching clothes for your new size :-).

None of this however worked and meanwhile the demand for reparations kept plunging Germany into deeper crisis as they devalued the Reichsmark, leading to hyperinflation. The crisis caused a flight of currency to safe haven US, strengthening the dollar further. The move to loosen interest rates to help the European currencies fueled the stock market bubble in the mid-to-late 20s, and then a move to tighten to curb speculation only made it run up even higher in the short-term as the volume of broker loans at high interest rates (~20%) brought in more speculative money and the hike wasn’t nearly enough to douse the speculative bubble which eventually burst in 1929 and led to what we now know as the great depression.

There were several other colorful characters in the book, my favorite being John Maynard Keynes (also Coolidge, Hoover, Churchill). Hitler makes several appearances as well - in fact the seed for WW2 was sown in this fiasco. I would have loved for the book to go on and cover the rest world financial and geopolitical history till date and hope the author does a follow-up. 11/10

[phreakv6]

Once Upon A Number, John Allen Poaulos, 1998 - Stories and Statistics, Numbers and Narratives etc., originate from this book. The author tackles the subject in a series of essays, somewhat incoherent but that is probably a design choice (sort of a Umberto Eco-ish approach). “The theory of probabilities is at bottom nothing but common sense reduced to calculus” - Laplace. The author argues on similar lines that what we attribute to common sense might just be handled statistically by our brain.

One interesting takeaway was the difference between the types of people that would prefer stories to statistics. Type I error in statistics is when we reject a truth and Type II when we accept a falsehood - People that prefer stories and like to be entertained may be likely to hate making Type 1 errors while the ones that don’t like to be entertained and beguiled are more likely to hate making Type II errors. I think it can also be simplified as, people loving stories hating errors of omission and ones loving statistics hating errors of commission. The book also delves into some of my favorite topics of conditional probability and Bayes theorem, as well as several of our biases (credits Kahneman).

My favorite parts of the book were the ones on informal discourse & logic, especially the parts discussing intensional logic (context-bound, self-referential, metaphor-laden) and common-knowledge (two people knowing the same bit of information and knowing that the other knows it) and parts on humour (extensive dissection on what exactly makes up humour and how a computer can possibly generate it, to beat a Turing test), language (similar in lines to Douglas Hofstadter’s Godel, Escher Bach and Lewis Carroll’s works) and information theory - especially the way the author compares cryptography and narratives, distinguishing meaning and information, how it relates to the sense of self, Godel’s theorem - no program can generate a sequence of greater complexity than it itself possesses - and its implications on our understanding of the universe.

I like it when extremely diverse topics are brought together - there was one of applying concepts of thermodynamics to narratives - the premise being that physical entropy of a mind-story system remains constant. There is a lot such unholy mixture of discordant topics, as the author himself calls it here and that may very well put people off. This may not be for everyone but can be a hoot if you love mathematics, logic, language, literature, information theory and philosophy. 9/10

[parkhi_nazar]

@phreakv6

Godel’s theorem - no program can generate a sequence of greater complexity than it itself possesses -

Dear @phreakv6: If this discussion goes on for longer, perhaps we can move to DM. This line caught my eye and I looked up Godel’s theorem (don’t know how I missed seeing this so far!). While the theorem itself seems beyond question, it looks like there are many interpretations that are pseudo-science, controversial, dubious etc. etc.

Your line above first caught my attention, as I thought - much like you pointed out - that it has deep implications on our understanding of the universe. But i also believe that we have a fair chance of creating an artificial intelligence that may ultimately surpass our own (yes, and perhaps take over the world). Doesn’t this mean that we would create “a sequence of greater complexity than our own”? Am I missing something, or does Godel’s theorem imply that we will not succeed in creating AI with better-than-human-intelligence?

[phreakv6]

I do believe that we will create a machine that will beat the Turing test too in the near future. But does that mean that the machine will have greater complexity (as in information theory, i.e kolmogorov complexity) than what we possess? This machine will not create any new information, it will only transform known information, in the same way that we do. That machine will have the same trappings of intelligence as us. I think Douglas Adams had an inside joke on information theory with his “42” as the meaning for life, the universe and everything.

[parkhi_nazar]

Okay, now I have one more thing to look up - kolmogorov compexity

Douglas Adams certainly has baked in a lot of inside jokes. Almost another layer, like some good animation movies do - a layer for kids, and a deeper layer for adults. I recall reading about a reference to 42 = asterisk in ASCII, which was then interpreted as “whatever you want it to be” since * is a wildcard symbol in programming / computer science.

[phreakv6]

A search in secret India, Paul Brunton, 1934 - This is not the kind of book I would have picked on my own but lately I have been seeking things I don’t normally seek, especially things that run counter to my intuition and beliefs. In a conversation with @NauticalTwilight on some things spiritual, I confessed that my thought process was confined to Western rational thought - on the scientific, observable and existential, to which were suggested numerous books of which I could only recognise the Upanishads (something I had tried and failed grasping).

With that background, I went into this book, not expecting anything but with an open mind. The book immediately got my attention too when it opened with the clarification that the author does not intend to fill the book with well-intentioned fools, scriptural slaves, venerable know-nothings, money-seeking conjurers, jugglers with a few tricks and pious frauds. The author very clearly has a deeply skeptical mindset with a spiritual sensitivity. That put me at ease to continue.

The book details the author’s search of Yogis in India and he finds quite a few, most unworthy of the term - Starting with the Egyptian in Mumbai who could not only uncannily read his thoughts, but transfer them onto paper at a distance, followed by Meher Baba, who he best described with “some men are born great, some achieve greatness, others appoint a press agent”. These sort of set the tone for the author’s intentions that he is not looking for miracles, nor people that promise them and that’s when he runs into the “anchorite of Adyar river”, and gets his initiation in the Yoga on body control. This section was thoroughly enjoyable as it detailed the sort of friendship he developed with the unassuming Brama. Things which raised brows for me (as well as the author, where he couldn’t believe what he was seeing) - Brama stops his pulse, slows his breathing to a complete stop for several minutes. It was very fascinating (I must look up more on this).

Other interesting Yogis the author discovers are Shri Sankaracharya of Kumbakonam, who surprises Paul with his intellect as much as his spirituality and humbleness, Mahasaya who was a disciple of Ramakrishna, and a conjurer who could transfer scents at a distance or could bring the dead to life (unbelievable, but confused as the author was, he puts it off as something that doesn’t interest him), an astrologer in Calcutta (who as the author says, was uncannily right on things to be mere coincidence), Sahabji Maharaj of Dayalbagh who according to the author was the only one who could balance the materialistic capitalism of the West and the spiritualism of the East (The history of Dayalbagh which appears to be a cult with a self-sutained living community, was curiously interesting).

The oustanding parts of the book, in terms of the essence, as well as the writing though is in the “hill of the holy beacon” (Arunachala) and Ramana Maharishi who appears for a bulk of the book. The Maharishi rarely even uses the word “God”, claims no miracles, solicits no seekers and puts forward a way of self-analysis which is devoid of dogma and delusions of grandeur. The way the author sticks to his journalistic ethics and puts forth his skepticism and enquiry, made the book a credible read for me on the subject. I have more questions that do not fit comfortably with my rationality but the honesty in the appraisal of the subject makes me want to file these incongruous learnings away without seeking to reconcile them with my existing beliefs right away. 11/10

[edwardlobo]

Paul Brunton has also written maharishi and his message

http://80.82.78.13/get.php?md5=0febe8cf2847a633d78c4d7c648ea0d0&key=OO33ZQP5JWAWV1NZ&mirr=1

[Akash_Padhiyar]

Autobiography of a yogi is another great book if one want to go deep in understanding of spirituality, meditation and some yogis.

[phreakv6]

@edwardlobo - This book was published in 1934 about experiences of the author in India in 1931. If there is a mix of tenses in my review, from present continuous, simple present, simple past - this I am aware of, but unable to regulate as I keep switching between the act of reading, act of writing and my thought-process as I was reading. Please ignore if its a bit confusing. The PDF you shared is taken from the 3 chapters in this book (A search in secret India), so someone interested can just read that part instead of the whole book, although the complete book sets the context for these chapters to shine through.

@Akash_Padhiyar - I will definitely try it. This was recommended by @NauticalTwilight as well. Thanks!