2. Billion Dollar Brand Club by Lawrence Ingrassia

Dollar Shave Club. Warby Parker. Casper Mattress.

This book goes into details on how some of the biggest D2C companies started.

Some interesting things:

• One early investor passed on Casper Mattress. He thought, “How often do people buy new mattresses? Every ten years?” Later on, he expressed regret. He didn’t realize that houses have multiple bedrooms. And he underestimated the sleep economy. Items such as pillows, bedding, and bed platforms have high margins.
• The Machines are Taking Over. How do you pick a winning product idea? Some people “scratch their own itch”. Others research the marketplace. There are now companies that are building brands solely based on data. One software is called AIMEE. They leverage AI and data to identify product opportunities. They specifically analyze bad reviews of competitor products in order to find opportunities.It makes me think about the role of A.I. and building brands a decade from now. Imagine a company where A.I. picks the product, Copy.AI writes all the copy, and all the traffic is automated. We’re closer to that reality than most people realize. We’re going to start seeing a lot of 8 figure companies that are run by 1 person + a virtual assistant + an army of robots.
• There are various “formulas” on how to come up with a product idea. My favorite part is reading about how the entrepreneurs came up with their ideas. And there are also “formulas” they use. One of the founders looks for niches where the incumbents have high prices, zero innovation, and bad customer experiences. 

The biggest value in the book is showing constant problem-solving. There’s no “blueprint” to follow in business. It’s literally solving one problem after another on a daily basis.

Warby Park ran into an issue where people were cautious of ordering glasses without being able to try them on.
They innovated by sending people six glasses to try on from home. They opened in-person stores several years later. And now, Warby Parky has developed an augmented reality app to see how the glasses fit you.

3. Tao of Charlie Munger by David Clark

Charlie Munger is the Vice Chairman of Berkshire Hathaway, and most well known as the business partner of Warren Buffett.

I watched one of his speeches over a decade ago. That video introduced me to the concept of mental models. And it showed me so many physiological biases that affect our everyday thinking.
Watch: Charlie Munger on the Psychology of Human Misjudgement 

I started reading this book because the investing world’s getting a little crazy. GameStop, AMC, and Dogecoin have dominated the headlines for the past few weeks. I wanted to read a book that would ground me a bit.

Some of my Favorite Quotes:

• Try not be stupid rather than trying to be intelligent. It’s way easier to avoid dumb mistakes than it is to focus on making brilliant moves.In poker, there’s a concept called “leaks.” These are the mistakes you make over and over that leave money on the table. One of my “leaks” was that I’d only raise preflop if I had a MONSTER hand. Overtime people knew to avoid going in if I raised. It was way easier for me to become better at poker by fixing my leaks than trying fancy techniques.
• Wait for the right opportunity. All of the humanity problem stems from the man’s inability to sit quietly in a room alone. 
• Overconfidence destroys even the smartest among all. Everyone thought real estate would never go down right before the 2008 crash. There were cults formed around so many alt coins that ended up becoming scams.I’ve been overconfident before on decisions and it ended up burning me. Drop the ego.Seek others who are willing to play Devil’s Advodate. Look for holes in your ideas. The truth is more important than being right.

4. The Psychology of Money by Morgan Housel

I’ve been obsessed with personal finance for the past decade. But diving into financial independence, there’s nothing “new” to learn.

Every book is a variation of pay off debt, invest in index funds through retirement accounts, and wait several decades.
The math of money is important. But what matters more is the behaviors and psychology that affect money.

A mathematician may understand how bad the odds are in roulette, but that doesn’t prevent them from wasting money on it. 

Some takeaways:

• Wealth is what you don’t see. What does the average person view as signals of wealth? Nice cars. Expensive vacations. Eating out at nice restaurants. None of those are wealth. Wealth is having assets that make money while you sleep.
  
  Here’s the problem: society rewards ostentatious purchases. Showing off a $100k car will get you more likes than showing off $100k in your Vanguard account.
  
  So much of wealth is resisting tempting choices. It’s saying no to the over-the-top, lavish weddings. It’s investing money instead of buying luxury handbags.
  
  “What you eat dies. What you invest lives forever.”
  
  Person A looks like he’s living the life to the world. The car’s leased, and he doesn’t have any money invested. It’ll only take one emergency for the house of cards to come crashing down.
  
  Person B looks average. He drives a Honda Civic. What people don’t see? He’s been maxing out his 401k since 22. He has zero debt including student loans. He has a year’s worth of emergency funds saved. Who’s going to be ahead a decade or two?
• People are playing different games. We tend to mimic the actions of other people. The problem is we don’t know their true motivates.Remember when everyone was going crazy over Gamestop stock? Well, Marc Cuban chimed in to defense WallStreetBets.When asked what they should do: “If you can afford to hold the stock, you hold. I don’t own it, but that’s what I would do”So people felt more confident. Marc Cuban’s on their side! Except he wasn’t. He didn’t own any GME stock personally. His game wasn’t to make money from GameStop or to “stick it” to wallstreet. His game was self promotion.
• Feeling Behind.Rajat Gupta was the former CEO of McKinsey & and Co. and sat on the board of Goldman Sachs.Banks and hedgefunds were crashing hard in 2008. Rajat was at a Goldman Sachs board meeting and got valuable information: Warren Buffet was going to save Goldman Sachs by investing $5b.Immediately after the meeting, Rajat called his friend who owned a hedgefund. He told him the news and they both made bank from investing in GS before the announcement was public.Well….both of those men were convicted of insider trading and were sent to Prison.One big question is why Rajat did it? He didn’t need the money. My man was worth over a hundred mill at this point!
  
  Here’s something I pulled from his Wiki:
  Gupta reportedly began to express a certain resentment about money, as his peers in Silicon Valley and Wall Street (including McKinsey’s private equity clients) at the time “raking in staggering amounts of money while Gupta soldiered on with a mere senior partner’s millions”
  
  He felt that he was “behind” because he wasn’t worth a billi. He was comparing himself to billionaires and felt insecure.
  When you feel like you’re behind, then you feel the need to take bigger risks to catch up.
  It reminds me of when I used to play Poker. If I’m behind on chips, then the proper strategy is to start taking more risks. I’m going to start bluffing and going “all-in” more or else I’ll be at a permanent disadvantage.
  That’s what I’m seeing now with a lot of people that are investing too aggressively. They feel like they’re “behind” in life and they have to catch up by taking on more risks.
  Bigger risks comes with a price: GME, XRP, and Doge all crashed within days.
  Remember that there is no “behind” in real life. It’s a social construct. We feel like it because we don’t own a house by a certain age. Or our net worth doesn’t match what some online article says we should have.
  Is that belief true or is that something society and others told you so?
  We all have our own path.
  

5. Invent & Wander by Jeff Bezos, Walter Isaacson 

This isn’t a biography or an analysis of Jeff Bezos. This is a collection of his annual letters to Amazon Shareholders.

If you’ve studied Amazon before, then some of his principles will keep popping up over and over again.

Principles such as thinking long term, focusing on customer, and continually experimenting are mainstays.

Bezos’ principles for growth aren’t unique. He is unique in two other ways. The principles have remained the same over the past two decades. Most companies are reactionary. If the strategy isn’t working, then they’ll happily pivot. Reading through his shareholder letters shows how he has had the same principles consistently. 
Second, he’s willing to go extreme on these principles.

Most companies think in terms of years. He’s thinking in terms of decades. Amazon started testing drones in 2013. 
Amazon was unprofitable for years. Their stock was down by 80{57b8cc37fd24bce1cf64c8b05d9407ce9171516056c1f5e762677747187a0de4}. He wasn’t reactive. Instead, he doubled down on innovation because he believed e-Commerce would take off. 
 Note: You can get all the letters for free on Amazon and save yourself $15. I found it worth it for the convenience of reading on my Kindle and reading Walter Isaacson’s introduction. 

6. Fooled by Randomness by Nassim Nicholas Taleb

As soon as the pandemic began, people started using the phrase black swan more.

“A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.”
I wanted to go straight to the source: Nassim Nicholas Taleb. He was the person who popularized the phrase black swan. 
I actually bought his book, Fooled by Randomness, in 2009. I gave up reading it after a few hours.

The book was difficult to read, and I didn’t understand many of the phrases and concepts. It felt as if I was trying to read calculus without understanding the basics of algebra.

Thankfully, I could understand most of the concepts a decade later.

Here are some concepts from the book.

Alternative histories: Alternative histories are invisible histories that could’ve happened but didn’t due to chance/randomness/luck.

If you were to relive certain events 1000 times, what would the range of outcomes be? A dentist earns $5 million over several decades. If he were to be a dentist again in 999 other lifetimes, chances are that he’d do well for himself.

Compare this to a janitor gambles a lot. In the current reality, he won a lottery ticket and is worth $5 million. Chances are that he’d be broke in all the other realities.

Both of these people have the same outcomes in this life, but you want to optimize towards certainty. 

Protect the downside:

There’s nothing wrong with losing, but make sure you limit your downside. Downsides are “rules” that you set to protect yourself.

My altcoin portfolio was worth several hundred thousand dollars during the 2017 craziness. I didn’t protect myself. It went down. And it kept going down.

Instead, I could’ve said: “I bought Nano at $1. It’s now worth $25. If it ever goes down to $15, then I’m going to cash out.” But I got greedy. 
Another idea is to protect yourself from catastrophe. I’m not in the supplement space. One thing I’d be fearful of is the supplements being tainted, and I’d be a target for lawsuits. I’d make sure to invest in liability insurance.

7. Think Like a Rocket Scientist by Ozan Varol

“It’s not rocket science!”

Rocket science has a reputation of being the most difficult subject to understand. So my curiosity was ignited when I saw this book recommended by Bill Gates.

Varol is a former rocket scientist who worked on the projects that sent two rovers to Mars. Rocket scientists think differently. They have to because they’re in the business of making the impossible, possible.

In this book, Varol shares various contrarian thinking strategies that we can all apply in our everyday lives.

Random Ideas:

• The secret to staying calm in a high stress, high stakes situation is to confront the failure head on. Face it, dissect it, and think about what would happen if it failed. In a way, this reminds me of how Stoics think about death. We fear the unknown.
• The low-hanging fruit has already been picked. You can’t beat a stronger competitor by copying them. You’re using the same strategy, but they have more experience. This reminds me of Counter Positioning from the Book 7 Powers. You can’t produce a cheaper cheeseburger than McDonald’s. ShakeShack found success by doing the opposite and targeting the high end market.
• Use first principles thinking. Here what that means in Elon Musk’s words.
• Treat success as failures, and failures as success. This one was kind of a mindfuck for me to understand. Treat success with suspicion. It’s easy to confuse skill with luck. If you YOLO’ed on $GME and made a ton of money, that’s not an outcome you should try to replicate.
  
  Failures are an opportunity to learn. I’m interpreting this concept as don’t place so much emphasis on outcomes, but rather focus on improving expected outcomes.
  
  It made so much more sense to me once I tied this playing poker.

It’s a fantastic book that stretched my mind.  

8. Billion Dollar Whale by Tom Wright & Bradley Hope

This is the most interesting book I’ve read in years. Think Bad Blood (Theranos) meets Crazy Rich Asians.
A young Malaysian man named Jho Low defrauded the Malaysian government out of $4.5 billion dollars through a fund called 1MDB.

How? He used his connections with the Malaysian Prime Minister, enlisted the help of Goldman Sachs, and always had excuses for every action.

He partied with Hollywood elites, funded the Wolf of Wall Street movie, and dated Victoria Secret model Miranda Kerr.

The craziest thing is that it’s a true story.

Now the Prime Minister is in prison and Jho Low has been in hiding for the past five years. This is a book about defrauding the government so I’m not sure if you should have any takeaways from this book. But it was a fasinating read. 

9. Station Eleven by Emily St. John Mandel

Earlier this year, I was in the mood to read a book about post-pandemic life. One that didn’t involve surviving zombies. My research lead me to Station Eleven.

A pandemic happens called the Georgia Flu. It wipes out 99{57b8cc37fd24bce1cf64c8b05d9407ce9171516056c1f5e762677747187a0de4} of the population and civilization crumbles. The book takes place twenty years later.

It’s about a group of traveling actors and musicians called the Traveling Symphony. They travel across the States performing Shakespeare in an effort to keep the arts alive.

“Survival is insufficient.”
I love the post-apocalypse genre. However, it does get tiresome when it feels every piece of media is so grim and centered around survival. This is a story about the arts, beauty, and hope.

While I loved this book, I don’t think too many people will. It’s a slow burn. If you’ve seen the movie Ad Astra, it gives me similar vibes. 

Conclusion

Patterns.

That’s the value of reading multiple books. When you’re reading books across different topics, you start noticing patterns that keep coming up.

We’re all underestimating the role that luck plays in success, and we’re all blind to how black swans could destroy us at any second.

We need to build margins of safety and robustness in our systems.

Think bigger.

Control the inputs. We can’t control the outcomes. The world is too chaotic. What we can control is the inputs that lead to outcomes, and we can control our own behaviors.
What were your favorite reads from 2020?
By the way, I get a lot of questions in regards to how I read.
First, I’m not a fan of audiobooks. I read on a Kindle Oasis device. Reading on a Kindle helps deepen my focus compared to listening. If I want to listen while learning, I prefer podcasts.
How do I take notes? I use the Kindle device to highlight key texts. It automatically syncs to a service called ReadWise.io. This service emails me 5 random highlights a day.
I find this more useful than me spending hours taking notes, and having it lost in my notetaking system never to be seen again.
Photo by Ricardo Esquivel from Pexels