I'm not giving this book 5 stars because I'm friends with Jennifer and David, who I met through their amazing work at WorldReader.org. Though if I do I'm not giving this book 5 stars because I'm friends with Jennifer and David, who I met through their amazing work at WorldReader.org. Though if I do have a criticism of the book, it's that it doesn't talk enough about everything that organization has done and is doing, helping kids all over the world get sucked into the magic of reading good books.
But I liked this book for two reasons: The first is that it was fascinating to learn more about their journey and how they handled it. The second is that it's bold - but I think important - to talk about wealth. Wealth is not glitzy, and it doesn't make you happy - but I think most people have the opposite impressions.
A fascinating book, great for investing and entrepreneurs. I like how he really focuses on contrarian thinking, and his mental models for it. But onlyA fascinating book, great for investing and entrepreneurs. I like how he really focuses on contrarian thinking, and his mental models for it. But only giving it 4 stars because I wish he went deeper there, with more examples. But this quote is gold:
Jeff Bezos says this often - to really create something new and innovate, copying others doesn't typically work. What works is Customer Obsession - focusing obsessively on solving problems people have. If you do that, you have a chance to create something truly innovative. If you are focused on competition - the "hot space", the "hot technology", the "hot market" - you likely will create something marginal. Goodreads was born and evolved this way - by maniacally focusing on solving problems for book lovers.
One of the more interesting points in the book, is that we live in a competitive society, and that causes us to over-optimize on the wrong things. We instead focus on beating the next guy or company instead of truly innovating, or focusing on what really matters to humans. In each company our goals and career growth define our pay, and thus we have to beat our coworkers, and our competitors to be judged successful. But even worse, competitive thinking is not creative thinking, and so it tends to be very incremental and built on past ideas, rather than creative and innovative. It also tends to be short term vs long term. Two quotes around this:
Another point I liked that sounds obvious but is actually fairly contrarian in practice is that startups are most successful when focused on small markets, but ones that have high concentration, so the product can grow quickly in it. Most MBA’s will ignore these markets because they are so small. In Goodreads’s case, our initial set of reviewers were not a huge number of people, but they were very concentrated in the 2007 era blogging platforms - they had all their friends on their "blog rolls", and thus when they discovered us we grew rather quickly in those communities.
But I liked this quote perhaps best - it really summarizes what I took from the book. Doing something different *is* likely whats going to truly help society the most, AND create value. That is an interesting thing to ponder!
An extremely well-written account of the 2008 financial collapse. It explained complex ideas like subprime mortgage bonds and CDO's in a clear way, anAn extremely well-written account of the 2008 financial collapse. It explained complex ideas like subprime mortgage bonds and CDO's in a clear way, and almost read like a fast paced thriller.
Essentially it seems that a bad ratings system and human greed created an economy that fostered the creation of a lot of bad debts, that eventually went bad, and caused a lot of big companies to go under (Lehman brothers, Bear Sterns), or require a bailout (Goldman Sachs, AIG). This is the real crime. These big companies were so focused on short term profits that they failed to see that long term what they were doing wasn't going to work. They should be appropriately punished for this, and instead many of them were saved by Uncle Sam. Would we have had a worse recession if Obama hadn't done that? Maybe. Maybe not. Lewis should write another book about that :)
Let me see if I can get this right. The book explains that mortgages are sold by the banks that issue them, passing off the risk. Mortgages are aggregated into groups in mortgage bonds, which are then packaged into tranches, which are rated by agencies such as Moody's and S&P's. The math was complex, but apparently somehow tranches that consisted almost entirely of "subprime" (aka risky) mortgages were being given high A ratings. I guess the theory was that by spreading out the risk across lots of mortgage bonds it lowered the risk. Too bad this didn't work.
Many of these mortgages were the variety that started 2 year fixed then went floating. They were largely taken out in 2005 - 2006, and as they hit 2 years the interest rates jumped as they went floating, and hoards of people defaulted. This explains why we teetered in 2007 and crashed in 2008. One of my favorite quotes to illustrate the madness:
And it wasn't just in Bakersfield. All over the country people were taking out loans that were too big for their britches, because the banks were encouraging it:
Economics is about incentives, and this book explained how they went very awry. But it was also a story about greed, and how even unintelligent people made a lot of money by riding the subprime mortgage train. The book followed several investors who noticed what was happening, but when they tried to tell people and test their "crazy" hypothesis that the financial world was going to collapse, they were mocked or ignored. So they just ended up shorting (betting against) the whole thing to make some money, which is what a good investor does.
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