Over the years my book selection process has become somewhat refined. Before the advent of blogs or even web the way to find good books was word of mouth, newspapers or magazines. There were best seller lists and books of the year but that meant that one would miss good but obscure books. Also the books from past would be missed too. For example there is no way I was going to find about Thomas Schelling’s “Micromotives and Macro behavior” from best sellers list. With blogs this selection process has become really easy and very effective. Since one only subscribe to authors one likes iis quite likely that the books recommended by them on their blogs would be to your taste. And when one is fond of bibliophiles like Tyler Cowen of Marginal Revolution it is bonus time.

Most of the blog authors when talking about books point to its page on big river aka Amazon. Once at Amazon it is easy to find what other’s are talking about the books in customer reviews. This is all good but what I am really excited about is the ability to check if the book is available at one of the branches of local Santa Clara County libraries (SCCL). This is possible by a little greasemonkey script on firefox that was written for Seattle Public Library which I improvised for SCCL. So now I have a blog filtered stream of books whose reviews I can read on Amazon and check their availability in the local libraries. An optimized solution, just what the good engineer ordered.

“Well I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.”

Coming from Mr. Munger, incentives as the very first cause or bias in Human Misjudgment, learning about incentives is quite important. And now Tyler Cowen, an economist and author of very famous blog Marginal Revolution has written a complete book on incentives called “Discover your inner economist”

This 250 page book is quite an easy read and very accessible as Tyler has used the “Me factor” to fullest extent. For me the most interesting part was about the signaling concept. As an analytical mind it is very difficult to rationalize stuff like why spend extra money flowers on valentine’s or on diamonds. But when you consider signaling concept and what might be going in your partner’s mind it all makes sense thereby increasing your marital bliss.

If you live in a large metropolitan area like San Francisco bay area, Los Angeles, New York, London, Paris, Singapore or Delhi you would resonate a lot with the chapter on finding good restaurants. Next time you are looking for good food look for low rent areas and don’t order what you can make at home.

There are other parts in the book about visiting museums, going to movies, dating and even saving the world. I finished the book over a regular weekend and was quite happy to read it. Gives a lot of talking points to talk with one’s peers to make one look smart (again me factor). Before ending the review a tip for the author. In the book Tyler wonders if sending a Christmas Card to his dentist who happens to be a Hindu an effective incentive. I would say send it on the Diwali (It is on Nov 9th this year) and it might work better.

Consider this when Burton G. Malkiel talks about the tulip craze and the call-options which happened in Holland in 1630s

“Part of the genius of financial markets is that when there is a real demand for a method to enhance speculative opportunities, the market will surely provide it”

Isn’t what markets did when every mom-and-pop dot.com company went IPO in the 90s or the interest only loans and adjustable ARMs of today.

I am equally amazed at reading the story British South Sea Company and the South Sea Bubble. Can’t imagine its share between 1717-1722 went from 100 pounds to 1000 pounds and then back to nothing. Or how about the RCA shares back in America rose from $94.25 to $505 from March 3, 1928 to September 3, 1929; a cool 434.5% growth in 18 months. I think this beats the growth of modern day darling Google. That too when we are in correction mode after the 90s.

This last paragraph of the chapter is what is most intriguing to me. I have read something to the same effect in quite a few articles. But it still beats me how this can be so simple. The business of making more money from existing money or investing

It is not hard, really, to make money in the market. As we shall see later, investors who select a portfolio of stock listings in the Wall Street Journal can make fairly handsome long-run returns. What is hard to avoid is the alluring temptation to throw your money away on short, get-rich-quick speculative binges.

Notice the “really”. Do you think so.

Feed is about the few teens in future. They have some sort of chip implanted in their brains which keeps feeding them all this information about where ever they look. It was marketed as a great tool for the kids as they will have access to all information via the feed. I haven’t read the complete book. I liked it so much that I recorded one of the paragraphs where Titus, one of the teens after having lost feed in a hacking incident, is thinking about the past when people didn’t didn’t had feeds. Listen to it

Feed from the Feed

Our lives teem with numbers, but we sometimes forget that numbers are only tools. They have no soul; they may indeed become fetishes. Many of our most critical decisions are made by computers, contraptions that devour like voracious monsters and insist on being nourished with ever-greater quantities of digits to crunch, digest and spew back.

Authors have broadly divided the organizations into People, Strategy, and Operations. Of course People are the most important part of an organization, they are the ones who make strategies which are then turned into operational plans. Strategy is a much abused word in consulting business I work. The booked helped me align my thoughts on what really is a strategy what a CEO talks about. Strategy is what turns an idea like “we need to have product for this” to reality. Finally Operations is step by step action plan to walk down the path given by strategy.

It was not an easy book to read for me. At various points I would stop and think about what the author’s are trying to say and how would a real life situation like that would be. Again I have never thought as an executive. My work plan is limited to get this solution implemented as decided during the blue print phase while managing the client expectations. So this book for me was also a peep into he CEO’s mind. I guess I need to widen my perspective.

The book is about corporate scandals and how for short term political benefits political parties can ransom the future. Authors approach of telling economic facts and theories is marvelous. Back in engineering school my good friend Arun Sharma used to say if you know a concept very well then you would be able to describe it by making common analogies. That’s what the professor does. I liked how in A Retirement Fable author writes

“There once was a land where people lived only two years. In the first year they worked; in the second year they lived off their personal savings.

There came a time when the government decided to help out the elderly. So it instituted a system called Social Security”

to talk about the impending social security crisis. Or how bulls and bears are described in The Ice Age Cometh. I smiled reading Two Thousand Acres when author concludes that

According to my calculations, my work space occupies only a few square inches of office floor. You may find this implausible, but I’m using a well-accepted methodology. Well accepted, that is, among supporters of oil drilling in the Arctic National Wildlife Refuge.

It was fascinating to read the real cause of California Electricity Crisis or Asian Currency trouble was just plain greed. Overall a great read. Check it at out at Amazon.