Book Recommendations #3

Been some time since I did one of these posts. Wonder how many I forgot?

One of my favorite genres of books is a new breed. Exemplified by Freakonomics and Blink, these books tell us where the new areas of thought are developing, how you can view phenomona through different eyes, or explore an everyday topic through the eyes of many different professions. The first three are all in the broad area of knowledge.
• Supercrunchers (Ian Ayres):This is the most “quant” book here. That’s because the book is about the power of using quantitative analysis of large datasets. How are Google, Amazon, Facebook, and other big internet companies able to know more about ourselves than we do? How did evidence-based medicine start, and why is it still such an uphill fight? My favorite anecdoate from the book: The author wanted to call the book something else. He chose several potential titles, and ran a test. He placed Google ads in a controlled experiment, altering the title each time. He gave up on his original title and renamed it Supercrunchers, which had tested better than the others.
• Predictably Irrational (Dan Ariely):Many books have been written about the non-rationality of people. In my opinion, the main advance in economics in the last thirty years is the incorporation of human psychology into the caricature of rational man. This books start there and goes a step further. It’s not just that people are crazy, it’s that we’re crazy in very specific, very predictable ways. If you have any interest in understanding what makes you tick, you’ll enjoy this book. My only criticism is that it draws to heavily on his own research. Relying on one experimenter means that some studies are suggestive rather than conclusive, and other parts of the field are ignored.
• Traffic: Why We Drive the Way We Do (and What It Says About Us) (Tom Vanderbilt)Traffic is something we all deal with, we all get frustrated by, and we rarely think about in a rational way. Vanderbilt tours us through anything and everything touching on traffic. What’s an efficient merge? Does having more signs help? What’s the impact of big cars on a road? Does building more roads make things better or worse? How do you design roads when the people driving them are so wildly heterogeneous in the goals and abilities? Does Los Angeles actually do a good job with their traffic? How do other countries deal with it? Are cell phones really that big a problem? Who are the worst drivers? What exactly is a good road system supposed to do? How do you balance the impact of faster speeds for all vs accidents for a few? Are safe roads really safer? Etc, etc.
• Mr. Sebastian and the Negro Magician (Daniel Wallace)I am really far behind. I was scanning the shelves at the library and couldn’t resist the title. I read it while our daughter was being delivered five months ago. (No, not literally while she was being delivered.) It’s by the author of Big Fish, and shows the same kind of raw story-telling abilities. Wallace can make the fantastic seem ordinary and the opposite in the blink of an eye, and do it so that you are fully immersed in the story, never once thinking how little sense any of it makes. A book filled with sadness and wonder.
• The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits) (Bogle, John C.):My investing “career”, such as it is, has been a steady progression from active gambling to passive investing. My first stock purchase was rolling the dice on Ticketmaster which lost 50% of it’s value the next day. No lie. After a couple more blows (and a couple successes here and there) I realized that I was not a particularly good stock picker. From then on, I split my personality. Gambling is for gambling, which I do as much as possible but for small stakes. My real money was moved to mutual funds, which then became index funds.

  All of which is to say I was already a believer in index funds before I read this book by the legendary John Bogle (he started Vanguard). I knew two or three good reasons index funds are superior, but this book showed me two or three more. I am more convinced than ever that purchasing anything else is a fools errand.

  (See my other favorite financial books here.)

• His Excellency: George Washington (Joseph J. Ellis): A fascinating biography of George Washington. I learned a lot about him and the times he lived in. It was amazing to see how someone could rise up from virtually nothing to become the unquestioned king of America (even if the title was different). And then to have the personality that willingly and eagerly gives it all up — you see how the force and character of his personality has invested our national character. My favorite scene – when he decides to crack down on some wannabe rebels personally. He’s the only president to ever lead the army personally during office. The rebels basically gave up the second they knew he was on his way.