Had an idea for this month that is a little different than what you are used to reading from me. Being it is years end; I tend to look back and think about what worked this year and what did not. I am not referring to the markets and investments, but more about what Redfish did and did not do as well as I would have hoped.
One of the things that I have discovered about myself is that I get excited about new things. Sometimes overly so. I learn these new things mostly from books and podcasts. I read a ton and listen to many podcasts from various sources however most of them are centered around running a financial related business. I will read or hear something, think it is fantastic, and immediately see how I can work that into the model we have at Redfish Capital. Sometimes the details of what I want to incorporate work and sometimes they do not. What generally always does work however is the general idea that can sometimes get lost in the actual details of making it happen.
If I could carve out more time to do more reading and listening, I would. My favorite places to hang out and read are coffee shops that offer an outside deck or porch. I can literally spend hours just sitting there drinking way too much caffeine and reading. As I approach 2025, I am going to try and schedule these times for my own personal benefit as well as for the company as this is where my best ideas are born.
I was sitting in front of the computer over the weekend in my home office. Next to my desk are three bookshelves. I think I need a fourth as they are packed! (FYI the above pic is NOT my bookshelf as I am way too OCD to allow that to happen) Anyway, I was staring at the business section of my personal library and came across the idea of listing out some of my favorite reads so that all of you could enjoy (if that is your thing) for yourselves. When picking these books, I tried to steer away from the overly technical writing of analysts and the like. I have books by legendary traders that honestly though contain fantastic information, reading them is extremely tedious. I wanted to pick just a few in varied different categories.
The first category is simply good old-fashioned “scum baggery” on Wall Street. You could fill an entire library with books dedicated to the horrific fraud and illegalities that have taken place over the years. For some morbid reason, I am fascinated by these! The lengths that many firms and individuals went to, fueled strictly by greed, is astounding. Maybe these are my soap operas.
Serpent on the Rock by Kurt Eichenwald. I recently received this book from my friends over at Exchange Right out in California. This is the story of the Pru-Bache securities fraud in the 1980’s. The repercussions of the “investments” that they bundled and sold was felt into the mid-nineties. When I read this, I am reminded of what we saw in Alternative Investments in the years between 2010-2020. These kinds of garbage certainly affected the due diligence levels I employ today when looking at Limited Partnerships.
Flash Boys by Michael Lewis. Lewis is considered by many to be the best there is at covering the world of finance. In Flash Boys he tells the story of the integration we saw in high frequency trading around 2013. I certainly do remember the day that the “flash crash” occurred in 2010. I still remember seeing shares of Proctor and Gamble, the chippiest of blue chips, fall over 50% in a matter of minutes! No one knew what was going on. It took five years to sort it out and when they did many new rules and regulations were put in place by the SEC and heavy fines were doled out.
Not a book on a particular crime or crisis, but more of an insider’s view of the tech titans in Silicon Valley is Kara Swisher’s Burn Book. Kara may be as tuned in as anyone ever has been in tech land. In Burn Book, she tells her own story of how she became the best there is at reporting on tech world but also dishes out all the good stuff on the players themselves. Mark Zuckerberg, Steve Jobs, Bill Gates, you name it, she gives the details out on each of them and what they accomplished. Simply a fascinating read. Be warned, she does NOT hold back!
The second category is autobiographical. The reason I enjoy these is that they provide me with the insight that the founder of a company had when forming the culture around what the company would become. Often, it is the very culture that drives the success of the business.
Shoe Dog by Phil Knight. Obviously, this is the story of Nike. The amount of science that went into the process of what is on a runner's feet is what got Nike on the map. What happened with Michael Jordan made them the global brand. But it all started with the culture of building the very best running shoe ever worn. Fun read.
Next, I would list Pour Your Heart Into It by Howard Schultz. This is an amazing history of Starbucks. Here is a company that absolutely came into existence behind the culture Schultz built. This company started the all-out craze of coffee houses across our nation. Schultz’s vision of creating the European coffee experience here in the US launched not only one of world’s most successful companies but launched today’s coffee culture as we know it.
Finally, in this section of autobiography, I must place a new read that was given to me my close friend and partner Ryan Kruger called Unreasonable Hospitality by Will Guidara. If I had to label one of these books as a must read for a business owner this would be it. Guidara transformed Eleven Madison Park from just another fine dining restaurant into one that has four stars from the NY Times, three Michelin stars, and was named the Best Restaurant in the world. Number one in the world. That’s impressive. He did this by reinventing the culture at the restaurant. The lessons he learned about providing unreasonable hospitality translate to any organization. I cannot recommend this book enough.
The third and final category is on investing. There are literally hundreds of books per year about investing but, in my opinion, these two stand apart. What they focus on is not the actual numbers and why an investment should be made but rather the psychological factors money plays in investors heads.
Thinking in Bets by Annie Duke was a great read. Duke is not an investment analyst or Wall Streeter at all. She was a professional poker player with over $4 million in winning tournaments including the World Series of Poker, WSOP Tournament of Champions, and NBC National Heads-Up Poker Tournament. Her expertise lies in making risk related decision strategies which ties directly with what we do in investing! What is the potential reward for a certain amount of risk? She also breaks down all sorts of ways that we as risk takers and decision makers have biases towards our own way of making these decisions. When we are aware of what those are, we are better at then making an unbiased decision about what to invest in.
The Psychology of Money by Morgan Housel is an outstanding read. Though most investing is a math-based decision, most of the decisions we make are not! Most of the decisions are made based solely on how we feel. Our pasts, our world view, our ego, pride, and many more come together to form our own investment committee in our heads. To understand all of this and properly place it in the right part of the equation makes seeing the math easier. Though it sounds complicated, Housel created a very easy read that I thought was worthy of this list.
Please let me know if you read any of the above and what you think. Also, if you come across anything out there that you feel is outstanding, I want to know about it. Learning never stops.
Redfish Capital Management, LLC is registered as an investment adviser with the State of Texas and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC, nor does it indicate that the adviser has attained a particular level of skill or ability. The content presented is developed from sources believed to be accurate and should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author and are subject to change. The information in this material is not intended as tax or legal advice. A legal or tax professional should be consulted for specific information regarding your individual situation. The material presented is for general informational purposes only and does not constitute the rendering of personalized investment advice. Past performance may not be indicative of future results. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's portfolio. Content should not be construed as an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned.
Comments