Multi-Disciplinary Reading - Book Reviews

[deevee]

Hi

My reading is not going on well but one book which I read (not worked out completely though) is Understanding Probability by Henk Tijms.

It is perhaps the best book on probability to get started. It is very easy to read and is more application and real life oriented. Standard math books have a theorem layout - proposition followed by proof and repeat. But in this book the author eases the reader into understanding probability concepts right from relative frequency methods which we all know to Markov Chains which Mr Simmons uses (rentech uses a variation called hidden markov as one of the tools).

I think as a market participant we all must know some basic probability and I think if you are on this forum you are well off reading this. Dont get taken aback that it is maths even if you have been a non science student. This book is common sense and I am sure each one of us will understand most of it.

Rgds
Deepak

[phreakv6]

Surely you’re joking Mr.Feynman, Richard P. Feynman, 1992 - This is a book I had read several years ago when I was young and I had been meaning to read again. To make it interesting, I actually read this alongside ‘The search for secret India’. I wanted contrast and balance, so that my mind wouldn’t draw quick conclusions.

Feynman is about as awesome you can get, as a man of science. Imagine working on the atomic bomb, playing bongos for the ballet, painting professionally, playing frigideira in Brazil at the Carnival with a marching Samba band, giving tips on getting laid (seriously), pulling innumerable pranks, cracking safes, learning multiple languages from Spanish, Portuguese to Japanese, getting involved in creating textbooks, giving lectures, inspiring the masses and being an advocate of the scientific method, and of course winning the Nobel - and all the while being human with all its flaws and being completely at ease with himself.

He dislikes narrow-focused intellect that cannot draw from multiple disciplines, is curious and self-taught, ready to learn from others and always up for experimentation, even if it is on his own self. Towards the end in ‘Cargo cult science’ talk, he experiments multiple times in a sense-deprivation tank to have himself an out-of-body experience, which he does - but instead of filing it off as mystical, proceeds to dissect what can cause it.

If you needed some inspiration to do multiple things with your life, look no further. The book has several disjoint reminiscenes arranged by period and so can be enjoyed in multiple sittings between other books. Stay curious! 9/10

[A_shah]

@phreakv6 pls do read autobiography of a yogi . It’s on similar theme
@NauticalTwilight, which are such other books

[JJoy]

The below is a great book too. The Outsiders

[vikasbargale]

GREAT TO SEE IN DEPTH REVIEWS on books here.
I am slightly lazy when in comes to typing , but here are 3 books which I would highly recommend if one wants to learn and implement the " Latticework of mental Models" by Charlie Munger.

Sharing the links below

The Great Mental Models: General Thinking Concepts - Shane Parrish

The Great Mental Models Volume 2: Physics, Chemistry and Biology - Shane Parrish

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated - Gautam Baid

Especially the third book is like consolidated reviews of many many investing related books. Absolute worth of Money.

All the 3 books are a MUST READ.

Regards,
Vikas

[phreakv6]

Quantitative Momentum, Wesley Gray/Jack Vogel, 2016 - This book was a good primer on the concept but I found it lacking in both breath and depth. It many times reminded me of ‘Magic Formula Investing’ book which had a simple concept for picking and rule for rebalancing. It defines what it means by momentum, something it calls “generic momentum” and then goes onto filter it out for smooth/jumpy momentum and calls it quantitative momentum, then analyses a bit on how varying the lookback period and holding period affects returns. The strategy’s universe is US large/mid cap stocks.

Short-story shorter, long-term momentum (3-5 yr momentum, held for 3-5 years) and short-term momentum (1 week/month momentum held for next week/month) both mean-revert because of too much expectations built into the price while intermediate-term momentum, i.e 12 month momentum, held for a period of 3 months is where the muffin top is. I liked how the book started in terms of reasoning why gaps existed in terms of behavioral biases, frictional costs and agency costs (fund managers avoiding career risk) and the fact that momentum investing is not that different from value investing, because they both exploit the same behavioral biases of the market. In fact it suggests having a momentum portfolio, along with a value portfolio (and use trend-following to avoid large drawdowns).

I thought it should have explored more on using SUE/CAR3 earnings momentum, reading market weather (which it does using a simple moving average), effects of equi-weight vs value-weight, other methods of allocation (say earnings-weight) and so on. It is still a very good introduction to the subject. 8/10

[phreakv6]

Confessions of an Advertising Man, David Ogilvy, 1963 - Am on a quest to learn everything under the sun, as much of it from the masters of the trade (Investing from Buffett/Munger, AI from Kurzweil and so on). Of late I have been picking topics I have previously despised, just to shake prejudices up a little up and Advertising is one of those and who better than David Ogilvy to learn from. This book is written like an Advertising Copy and was/is a clever marketing tool for Ogilvy, Benson & Mather (Currently named just Ogilvy) while being tremendously instructive.

Born of prilege but having sought himself a path to rise on own, Ogilvy has toiled as an apprentice Chef at a French kitchen, sold Kitchen stoves door to door, wrote an impressive operating manual for the stove he was selling and caught the attention of an Agency (Mather & Crowther) where he picked up his chops and worked at Gallup’s Audience research for a decade before starting his own Agency on Madison Avenue.

What I liked the most was Ogilvy’s values which sort of mirrors someone like Buffett - Ogilvy never advertises products he himself doesn’t use, sticks to the facts in the copy, aligns himself and his agency with the product, contributes to research, is very careful in picking what products to advertise (he knows a dud when he sees one), buys stock in the businesses he advertises (shows skin in the game - he almost aligns himself as an investor in the business), toils the same on every account, writing 17 headlines for each copy, doesn’t shun from overthrowing norms (introduced fee model on madison avenue from the 15% agency commissions) and so on. Ogilvy has written ads for Guinness, Hathaway shirts, Dove, Schweppes, Puerto Rico Rum, Rolls Royce which appear many times in the book. Turns out closer to home, O&M did the campaigns for Vodafone (the famous Hello campaign, the vodafone pug, zoo zoos) and also the “Incredible !ndia” campaign.

The book is written so well - It is organised into 11 chapters whose titles tell you precisely what to expect (How to Get Clients, How to Keep Clients, How to be a Good Client, How to write Potent Copy, How to Illustrate Ads & Posters and so on.) and each of the chapters as well are organsied beautifully that lead from one to another with sub-sections/ordered lists having their own titles so you always know what you are going to read about, even if its just 500 words - You learn how to write well just by reading this book Also, this is one of the most humorous non-fiction books I have ever read, probably after “Poor Charlie’s Almanac”. It is filled with Ogilvy-isms through-out. I am very tempted to lay out some examples but I wouldn’t want to spoil the fun. I will leave you with one potent headline he wrote for Rolls Royce - “At Sixty Miles an hour, the loudest noise in the New Rolls Royce comes from the electric clock.”. This is a small book that packs quite a punch and it is considered the Bible of advertising for good reason. 10/10

[dj123]

Poor Charlies Almanack : wit and wisdom of charlie munger
This book is all about charlie mungers approach to life , learning , objectivity and investing as a by product of leading a goal and process oriented life. This is the second time i have read this book and it a rare source for learning basic approach/philosophy to navigate life, approach decision making and at the same time how to progress with time.

Since most of us are aware of charlies background and his partnership with warren buffet, i would mainly focus on the main contents of the book. this might be a little long review but i wanted to write it anyways.

this book mainly focuses on the following principles :-

1. Multidisciplinary approach to learning : one should learn all the major lessons of major disciplines. He lays emphasis on hard sciences where in one should be conversant with high school algebra, elementary probability and basic lessons of engineering,chemistry and biology. lessons from psychology are limited in number and easy to understand but the same are not given their due importance. he lays special emphasis on the psychology of human misjudgement and lists out the major one. One needs to have a latticework of mental models. Thinking fast and slow is another treasure if one wants to read about decision making and behavioral finance , it is written by daniel khaneman along with amos tversky

2. According to him one can accentuate his learning curve by reading a lot of history, reading biographies of great personalities like B franklin, cicero, feynman and the likes.

3. For approaching complex problems in life or in investing he insists that one should try the law of inversion: basically what are major mistakes that one should avoid and hence mere avoiding such pitfalls will lead us onto the correct path. " invert always invert".

4. He is a big fan of process driven approach to life and frequently quotes the benefit of having a detailed checklist for different fields. He cities the examples of pilots who with the help of checklist are able to handle a complex machine with ease. The book has a basic checklist for investing. when it comes to investing he wants one to mainly focus on the business quality, the management quality and finally the ability to quantify risk.

5. Charlie introduces us to the idea of think in term of pay-off odds…Pari-Mutuel system of betting of which he is a great fan. His idea is not to bet on the obvious but to look out for mispriced bets which tend to payoff more and losses if any are limited. This according to me is a very strong concept and if imbibed can drastically improve long term performance. He advises to swing really hard when such a mispriced bet is offered and one should wait patiently for such oppurtunities. One should then also let the power of compounding do its wonder over a long period of time.

6. He is against few of the practises of corporate america like use stock options and the way they are accounted. the institutional imperative of top management and also of investment banking in general.

7. He has coined the term LOLLAPALOOZA effects where the result is bigger than the sum of the parts. This particularly helps in investing and one should always look out for such effects taking place either for good or bad. He also talks about pavlonian effect and conditioning reflex which one can associate with big brands.

8. Few observations which i could relate to in respect to the market is that charlie is a big fan of micro-economics and wants us to avoid macro-economies. according to him one will be better off studying decisions made by people and business regarding allocation of resources rather than analysing far too complex macro situation. He is also very vocal about the ill effects on the brain of having a very strong ideology. This might be political or ideological in nature. so we all must guard against it.

9. He wants one to acquire knowledge which is sound and gives example of max planck for the same. He wants one to master their domain and not be the one who mostly learn to prattle their talks which according to him is “superficial knowledge”.

10. The last chapter of the book mostly covers heuristics/biases, power of incentive and incentive induced behavior for long term gains. For this topic i would recommend one to read " thinking fast and slow" as mentioned above…

To sum up, the book is like a big banyan tree with multiple branches ,each branch invokes curiosity and is full of wits and wisdom of charlie. It gives a brief outline as to how one can start from scratch and with effort on regular basis can become better with each passing day. This book is an ode to a guy who devoted his life to continuous learning along with ethical living. I compare it with an ode as its fun and rhythmic to read. Charlies one liner and dry sarcasm will keep you entertained and will convey deep meaning at the same time. This can be reread once in few years to realign our prespective with goals in mind.
With this i have nothing more to add

regards
divyansh

[phreakv6]

Ultralearning, Scott Young, 2019 - Ultralearning is just self-learning on steroids. It provides a general template for learning any skill. The first thing could be to start with a map of the why, what and how - figuring out what kind of skill it is - concept-heavy, fact-heavy or practice-heavy and how to go about planning the learning. Some tips on focusing and sustaining focus, avoiding procrastination (simply getting started), putting yourself in the deep-end and focusing on practical vs theoretical knowledge etc.

If you are already an avid self-learner with multiple self-learnt interests, it may help you with the acceleration part but otherwise there may not be much else. What I have generally believed in is that if you can pick up one skill all by yourself, it gives you the confidence to pick up pretty much anything on your own with the same general principles. I found too much text in the book and too little incrementally useful info and hence found it a bit boring. 7/10

[phreakv6]

The Obesity Code, Jason Fung, MD, 2014 - I haven’t read too many books on health and wellness, so thought why not start with this one which comes very highly recommended by @crazymama . I am thankfully neither diabetic nor obese but the underlying research and facts in the book can be useful for everyone.

Here are some of my takeaways from the book

1. Reducing caloric intake doesn’t help in reducing obesity
2. Calories In minus Calories Out is not equal to Body Fat
3. Calories In and Calories Out are not independent variables. Calories Out depends on Calories In as your body reduces expenditure (basal metabolic rate) as intake reduces
4. A calorie in broccoli is not the same as a calorie from a candy bar. Some calories sit longer in the stomach than the rest due to their absorption/gastric emptying rate.
5. Exercise doesn’t cause lasting weight loss in the medium/long-term
6. Almost all diets like LCHF, Mediterranean, Keto are all beneficial but only somewhat and none of them are supreme
7. Higher Insulin levels cause obesity. Higher Insulin levels could be caused by insulin resistance. Insulin resistance is caused due to refined carbs, processed food, continuous intake of foods without long periods of fasting after feasting. The body subsequently generates more insulin to compensate the absorption of glucose
8. Fiber is very good in reducing energy density of food. Vinegar moderates blood glucose levels.
9. Even whole-wheat bread has as high a glycemic index as white bread. Industrial milling (vs stone-milling) to fine flour causes extreme absorption of carbs.
10. Solvent-extracted vegetable oils are very harmful. Fats like Olive oil and walnuts are very good.
11. Fasting/intermittent fasting has tremendous benefits
12. All sorts of artificial sweeteners are more harmful than fructose (fructose itself though lower in glycemic index is more harmful than glucose).
13. A bulk of the obesity and diabetes epidemic is self-inflicted due to AMA/AHA guidelines from the 70s that advocated low-fat, high carb diets.
14. Not all obesity is due to insulin and not all the things that regulate insulin are well understood. Stress-response (Cortisol) in the wild would cause an animal to have higher glucose for fight or flight. Stress still increases blood glucose and consequently insulin and causes obesity.

There are several perspectives considered in the book and consequently a lot of research papers and studies are quoted from over a 100 years, making it relatively credible on the subject. It doesn’t attempt to sell anything and advocates becoming healthy by subtraction more than by addition which in general is a good approach with a lot of troubles caused by excesses. Very highly recommended, especially for understanding diabetes, obesity and health in general. 9/10

[deevee]

Hi

Wanted to share my brief opinions too on two of the books.

1. Ultralearning - This was a book which I felt could have done well as a blog post. If I ever want to make money from writing I will write self help books.

2. The Obesity Code - I started watching videos by Dr Fung when @crazymama recommended them. I had 3 problems then 1. Was told to start taking BP medicines 2.Was gaining weight 3. Had plantar fascia (because of this I had to stop exercising a few years ago). I was also afraid of diabetes due to family history. Within 5-6 weeks of sticking to Intermittent Fasting my BP had fallen, resting heart rate went down, weight naturally fell and all the years of pain in feet (plantar fascia) eased off. Big relief. In few months I went from close to 80kg to under 70kg.

Then I read this book. And every year I maintain 6 months of IF religiously (spaced out). Last week I decided to go to track and run. Did a few Kms with not an iota of pain. Weight reduced, autophagy perhaps helped. Maybe I am having placebo.

This book imho is the best health book out there.

Rgds

[dj123]

I wish i had read this book earlier. This book is a compilation of selected essays written by the team of Marathon asset company for their Global Investment review. The book though a compilation of essays, is very easy to navigate. It is written in a very lucid and fun to read way and is filled with lot of examples and case studies which have immense learning value.
This book is like getting into the drivers seat and provides very precise/clear information to understand how various capital cycles work and where/how should one look to make better informed investing decisions.

1. Typically capital is attracted into high-return businesses and leaves when returns fall below the cost of capital. This process is cyclical in nature-there is constant flux. The inflow of capital leads to new investment, which over time increases capacity in the sector and eventually pushes down returns. Conversely when the returns are low, capital exits and capacity is reduced and over time after consolidation profitability recovers “creative destruction”. This beautifully explains the natural cleaning mechanism of any sector/industrial cycle. One is also forced to focus more on the supply side for determining future outlook of the sector
2. This when combined with porters famously discussed five forces can give a investor a detailed overview about the competitive advantage of the business.
   There are lot of examples from indian context which becomes easy to understand if we can apply where the industry stands from a capital cycle point of view and how is the future supply going to shape up. Few which readily come to mind are telecom, real estate after the boom of 2008 and also the nbfc crisis of 2018-2019 ( though credit cycle has its own nuances but is cyclical in nature).
3. Few red flags for over supply in a industry/sector are frequent IPOs, M&A , increased capex along with rise in debt during the upcycle. One should be wary of management who are not aware of the capital cycle of their own industry and hencetend to mis-allocate capital, vice-versa one should try and be with who are aware of capital cycle and are good capital allocators and mostly invest during a down cycle.
4. Chapter 2 tells us why we should not even consider accounting metrics like PE etc for valuing a company. Our focus should rather be on strong competitive position,network effects, pricing power,differentiated/low cost product and economic moats. such companies deserve high valuations than avg. This coupled with industry tailwinds can provide a real good ride into wealth creation.The value/growth dichotomy is false, rather we should focus on future earnings growth.
5. Chapter 3 focuses on the management quality and attributes. The management should be aware of the industry capital cycle,should allocate capital in counter cyclical manner (raise money via equity sale in upswing and capex in downswing), has large equity stake and is dispassionate towards selling assets when someone is prepared to overpay. The incentives of the management should be linked with long term fundamentals of the business. It is very important to gauge the work culture in the company, ability of the management to accept mistakes and competitors. They should be modest and conservative and during concalls or agm should be willing to answer queries (better if it comes from the ceo/md).They should not be fixated on the quarterly EPS game and should try and comment on the shaping of business environment.
6. Chapter 4 is about accidents waiting to happen. here they have mainly covered the anglo irish bank (yes bank in indian context) where in the management was justifying taking on risk without due diligence. The quality and value of underwriting was not good and bank was rather focused on growth and generating profits.
   Other evidence to ascertain market froth are also discussed like:
   Commodity bubbles, PE mania (overvalued deals), IPO frenzy, M&A Mania ( without logic or value accretion) and finally the retail exubernace. This chapter also has a very good essay in the end about about how a good financial/bank should operate or how can one spot one.
7. Chapter 5 is about the " The Living Dead". These are the industries/sectors where the natural cycle of creative destruction is not able to take place either due to avb of cheap capital or due to intervention of policymakers. Brings out the importance that excess capacity and weak profitability should be addressed. They explained in detail how policy intervention and quantitative easing in japan since the 1990 has resulted into poor corporate profitability along with growing debt burden. Is the west also heading the same way…sure looks like that…?
8. Chapter 6 is about why they have been averse to investing in china. They have always been wary of investing where the formation of fixed assets are on the higher side. China also suffers from misallocation of capital due to avb of cheap capital for long. Other factors one should lookout for is that the State should not interfere too much in the business ecosystem, the chinese companies have lot of interference from the state, so much so that during the IPO the state would help the companies to dress up profits and assets.
9. Chapter 7 is the final chapter which is mostly fun to read and comprises of satirical fictional essays about greedy Inv bankers , poor corporate management etc.
   Regards
   Divyansh

PS: Book reviews by various members (specially @phreakv6) pushed me into making an effort. It helps me in rereading and recollecting along with focusing on the main/important content of the book read. Please do add/correct if someone else has too read the same book.

[Rits]

I think you are not having Placebo… I have been doing Intermittent fasting (generally 12 hours, sometimes 16-18 hours) alongwith low carb high fat diet for the past 3 months and have immensely benefited from it. I have reduced around 6 kgs of weight and my morning blood sugar level is reduced by almost 40% (from around 160 to around 95-105)… And the dose of my sugar medicine is also halved by my doctor… So, I think this is a real science, which has worked for many people… Just one word of caution: if somebody is diabetic or suffering from some other chronic problem, he should do it strictly under medical supervision.

[kalidasa]

I observed similar benefits. I have been doing intermittent fasting since almost a year. Earlier I used to skip breakfast but now I skip dinner, which is much more suitable for the cycardian rhythm. There is research that shows food is digested differently in the morning and in the night (cycardian rhythm), so it is better to not eat at least a few hours before sleep.

My diet now has lesser sugar and grains, and more “real food” such as vegetables and eggs. I lost 10 kgs—now trying to slightly increase my weight—and blood pressure is also lower. Overall, I feel I am in better control of my body.

Some recommended resources on diet, aging, immunity, and related topics:

• Dr Eric Berg’s Youtube channel - highly informative and short videos, although not all can be believed
• Dr Rhonda Patrick’s Youtube channel - scientific evidence backed, technical

[Pankaj_Dharamshi]

The Victory Project: Six Steps to Peak Potential

“The Victory Project: Six Steps to Peak Potential” is fourth book written by Mr. Saurabh Mukharjea after Coffee Can Investing, The Unusual Billionaires and Gurus of Chaos. The book is co-authored by Mr. Anupam Gupta .

The publication of the book in mid-August 2020 coincides with Marcellus Investment Managers’ second birthday (the Ministry of Corporate Affairs granted us incorporation on 8th August 2018). Furthermore, these two events happen to coincide with Unlock 3.0 and with Mumbai’s quiet triumph against the ravages of Covid-19. The book tracks the evolution of two characters – Akanksha (a Senior VP in an MNC company) and Suraj (a rookie investment banking associate) .

“The Victory Project” is culmination of two years of research by Mr. Saurabh Mukharjea and Mr. Anupam Gupta on the drivers of outsized professional success alongside personal fulfilment in professions as diverse as music, cinema, literature, psychology, manufacturing, investing and martial arts. Two-thirds of the Victory Project has nothing to do with Finance & Investing. In the first three sections of the book we detail out The Simplicity Paradigm – six-part framework - for achieving peak potential. The first layer of the paradigm is specialisation, simplification & spirituality. The second layer of the paradigm is clutter reduction, creativity, and collaboration. Each of these six steps is brought to life using case studies which have nothing to do with finance & investing.

It is only in the final section of the book where we have to illustrate the Simplicity Paradigm at work that we focus on finance & investing case studies of great companies like TCS and Amul and great investors like John Bogle and Rob Kirby.

[parkhi_nazar]

I just finished “Influence” by Cialdini. I think the beauty of this book is the very practical nature of it. The insights lend themselves quickly and well to application. Cialdini almost leads you to the podium, rather than give you broad tips on racing. It is done in a very humble, warm manner as well.

I’m very happy I picked this one up. Thank you Mr. Munger!

Rating: 10/10

[phreakv6]

The Master Algorithm, Pedro Domingos, 2015 - This is the Lord of the Rings of Machine Learning books. There is more reason than one for me to make such a tall claim. Like Tolkien’s Middle-Earth with its Elves, Dwarves, Orcs, Trolls, Men, Domingos covers the multiple-facets of AI/ML i.e Symbolists, Connectionists, Evolutionaries, Bayesians and Analogizers in reasonable depth and goes on to propose the one ring that will rule them all, the Master Algorithm. Alright will stop with the LOTR stuff here.

Symbolists - Hume’s problem with induction is the conundrum of generalizing from what we’ve seen to what we haven’t. Symbolists manage this via Inverse deduction with Logic as the formal language (driven by Decision Trees, Random Forests). Conjunctive and disjunctive concepts, ill-posed problems, no-free lunch theorem, overfitting (leaning towards non-recurring patterns - say deeper decision trees with too many leaf-nodes) and underfitting (missing out on patterns that exist - broader categories and shallow trees) are all explained very succinctly. Issue with Symbolist approach is that its driven too much by formal logic and by what we can “See”, missing the submerged part of the iceberg. Decision Trees and Random Forests are used in a lot of classifiers (say spam) and in forecasting.

Connectionists - This is modeling learning after how the brain does it (Hebbian learning) via densely inter-connected Neurons with its Dendrites and Axons. Neural Networks are the way to approach the problem - with transistors catching up with neurons in the brain, NNs are now lot more feasible than ever before (they have been around for long) and Gradient-descent is how the model is optimized. Arguably this is also the hardest to grasp in-terms of internals for the human brain as it involves thinking in higher than 3 dimensions which our brain struggles with. Perceptrons, the significance of the Sigmoid curve, climbing mountains in hyperspace (for gradient descent and optimizing error), backprop, hopfield networks, sparse autoencoders are explained in a reasonably lay language. Understanding a simple thing like a dotproduct of a matrix doesn’t come easily to us due to limitations of the human brain, so a lot of what goes under the hood in a NN will forever remain outside of our grasp unlike a Decision Tree.

Evolutionists - Genetic Algorithms are modeled after Evolution and just like Evolution are capable of leading to truly “new” outcomes. Exploration-Exploitation dilemma - Do you repeat what you are good at to maximise benefit or do you go exploring to gather more information? This is one thing Evolutionists are very good at as Connectionist algorithms can get stuck at local-maximas while Evolutionist algos can go exploring - sort of a Nature vs Nurture controversy (Both Connectionist and Evolutionsts are inspired by nature)

Bayesians - By far my favorite part of the book, not least because of my love for Bayes theorem where probability is a degree of prior beliefs only meant to be updated with new evidence for posterior beliefs. Naive Bayes classifier is one of my earliest exposures to ML and it still baffles me with its elegance and sophistication. Markov chains and HMMs or Hidden-Markov models are at the heart of some of the everyday tech we use, from Apple’s Siri to Google’s PageRank and also in computational biology, economics and defence. There is a lot of overlap between how NNs go about their job and how conditional probability works (backprop is like updating posterior beliefs) - its just a different way of approaching the same problem.

Anologizers - Nearest Neighbor algorithms, Support-Vector Machines (SVMs) and Analogical reasoning are used often in predicting tastes in movies and music, image recognition, buying patterns etc. and other recommendation system used by Netflix and Amazon.

I was pretty much lost towards the end of unsupervised learning and the Master Algorithm parts so I have nothing much to summarize there. If your interest in piqued, do try the book. I don’t think any other field attracts the sort of talent as ML does and some of the best minds here are well-versed in multiple disciplines from biology, philosophy, physics, politics, comp-sci, math, law, language, logic and so on.

This book is one of the best things I have read this year. 11/10

[SidharthW]

I read “invest like a guru” by Charlie tan this week. Charlie Tan is the founder of gurufocus.com.

Charlie Tan has a PhD in physics - worked for many years as a physicist for a fiber optics company in silicon valley before he found his love for equities courtesy Mr Buffett and Mr. Peter Lynch

Being an Engineer myself, what I liked was the way Charlie explains even quant aspects with ease - I really liked how neatly he explained dcf model math and then most importantly showed how he applied to arrive at intrinsic value of stocks that he was following

The constant use of charts/pictures was quite useful to understand how gurufocus tools can be used to create your own graphs/charts

It’s quite clear Charlie is an avid Buffett fan as he keeps referring to his shareholder letters and then shows what he learned from it or how he applied it in his decision making process

Charlie is not afraid to admit his blunders in stock market. Weak balance sheet is usually the most common reason thanks to enlightenment from Buffet and applying that wisdom to his failures

My personal favorite chapter is where he applies his learning to Peter Lynch’s six categories of stocks and shows why he believes we should simplify our lives and stay away from cyclicals/turn around and asset plays

I recommend reading it

[Pavandeep_Singh]

Does anyone on this thread have a system of mental models like Charlie talks about? I spent a considerable time during this lockdown creating a doc with a latticework of around 90 mental models from the major disciplines.

I have done this after reading multiple books/blogs watching tons of videos on these topic. My 90 or so mental models fall in 14 categories in a discipline agnostic fashion. I want to make this a part of my thinking tool kit and have started using some of these broad concepts to solve problems and figure out patterns.The 14 categories each have around 8 models and are broadly ordered in terms of the scope of applicability that I have observed through usage.

I have even invested a significant part of my portfolio by choosing companies that have stories that fall in line with some of these models (Out-cooperation, critical mass, Anti-fragility, Feedback loops, Niches/Ecosystems to name a few).

I personally think that consciously applying these principles and trying to find the right tool for a certain problem will help me in two ways:

1. It will make the decision more sound because of multidisciplinary broad-based thinking
2. It will make the system I have created better through constant adjustments.

If anyone in this group is working on something related to this (mostly inspired from Munger’s latticework theory) please let me know and we can share notes and experiences.

Please only message if you have developed an approach using a bunch of mental models and want to collaborate and improve it, as my objective is not to discuss whether this is a good idea or not.

[anilkamath]

Would love to collaborate with you on this one.

The system that I use for now is on an app called Notion. It is a note-taking app which is built on relational databases, which is basically saying that everything is stored in a table and you can link different tables to create a huge database.

To give you an example, I have created a list of Mental Models along with a short explanation from Farnam Street. This is in one single table.

Then I have a different list of all the articles which I find interesting. I tag these articles with any relevant mental model.

At the end, what I get when I open my Saved Articles notebook is a list of all the articles with the mental models used in each. And if I open my Mental Models notebook, each one has an article tagged with it.

Would be happy to connect with you and learn about your process as well.