Saturday, 20 February 2016

Not Fade Away Book Review and My Story

Just a heads up that this is a very personal post, with limited relevance to investing. Proceed at your own risk.

This book has to be one of the most moving ones I read in a while and thought it was worth writing a review with some of my personal reflections as well. The recommendation originally comes from Tim Ferriss' interview on his podcast with Chris Sacca. Chris is a VC but has taken a different approach to the traditional way of doing things and his portfolio includes a number of companies that turned out to be unicorns (his interview and story are worth checking out).

Back to the book. The story is about Peter Barton whom along with John Malone completely changed the cable industry. Peter was part of the baby boom generation and accredits his growing up in this era, where kids weren't pressured to become astrophysicists at age 5, to much of his success in life. He has been an all around bon vivant, musician, self-described ski-bum, Columbia University student, political campaign strategist, working in politics and eventually going to work for John Malone as his right-hand man turning the cable industry inside out and retiring in 1997 at the age of 46 to spend time with his family. Except life had other plans...he passed away in 2002.

He was diagnosed with stomach cancer, which after a while seemed to have been cured, however it unfortunately came back in a terminal version one year later. During the last period of his life Peter got together with writer Laurence Shames to put all of his life and experiences on paper, which resulted in this gem of a book. At first he was reluctant to get involved in this project: "I tried my damnedest not to get involved in the writing of this book, or with a man named Peter Barton, whose life it celebrates and whose death it chronicles. My reason for resisting was simple: My own small existence was on a very pleasant, even keel; I didn't want to disrupt it by getting close a dying stranger. I didn't want to think about mortality, still less watch death happening from day to day. I didn't want to grow to care about a family that would soon be fatherless". Fortunately for the readers he did get close and wrote this wonderful book.

Instead of going through the whole book I thought to take out a few parts and lessons that stuck with me the most as I was reading it. You can read about Peter Barton's life in his obituary.

"Funeral Test" (i.e. whoever has the biggest funeral wins): "The official recognition [of Peter's achievements] was impressive...and yet it seemed oddly impersonal, beside the point. Peter would have been more pleased, I think, to see the hundreds of friends who rallied around his family. Kids he'd coached, or taken along on his Real World Outings. Colleagues he'd advised and schemed with. Neighbors whose dogs had gotten muddy alongside Peter's dogs. People he'd skied with, or biked with, or with whom he'd sat around the piano and jammed and wailed. More than fifteen hundred of these friends and colleagues and acquaintances turned out for Peter's memorial - an event intended not for mourning but for celebration. There was a gospel choir, and a children's choir in which Kate [his daughter] sang. There was food and wine. There was a stitched together video of Peter's life, accompanied - of course! - by a rock'n'roll soundtrack. And there were speeches. In keeping with the spirit of the evening, the speakers passed lightly over the subject of Peter sick and dying, still seeking meaning in the face of pain and honest doubt. Instead, they spoke of Peter in his glory. Peter, who believed that nothing was impossible. Peter, who could step into a situation, overwhelmed but never daunted, and master it. Peter who skied too fast, drove too fast, worked too hard, and made it all look easy."

Finding the right spouse: "Relationships had been one of those aspects of life in which I made things harder for myself, was too feisty for my own good. I'd waffled on commitment. I'd sometimes been unkind by simple inattention, being too wrapped up in other things. I don't think I'd ever truly let someone into my life. I was also saddled with the odd and macho notion that a man needed different sorts of woman at different ages. [...] What I was too dumb to realize, of course, was that if you were lucky enough to meet the right woman, she was all of those things and more - and the two of you evolved together. When I met Laura [his wife] I finally started to understand that. And thank God I did. [...] Previously, if there were difficulties, rough patches in relationships, I walked. Now we worked things out. Previously, I did things my own way, by reflex. Now I was willing to pause, to see the wisdom in Laura's way. It was crucially important to me to get this right, because I had the absolute conviction that if Laura and I started a family, we would stay together forever."

It's not all about the money: "It was a messy beginning, but CVN really took of. Within two years it was a billion-dollar business with forty-six hundred employees. But I'm a start-up guy by temperament, and by then I was tired of running it. The only way to make a graceful exit was to merge the company with another recent start-up called QVC. At this point I could finally sit still long enough to consider my stock options. I saw what they were worth - three million bucks, a million and a half after taxes! - and cashed them in at once. Now, some people might say that a million and a half dollars is not a lot of dough, but to me it was that most elusive amount: enough. Enough so that I was confident my wife and kids would be secure. Enough so that everyone would have a home and tuitions would be paid. Enough so that if I dropped dead tomorrow, everyone would be okay. I was over the hump. I could do right as a father. I was thirty-eight when that money came to me. More money has come as money does; it takes on a momentum of its own. But the rest has been Monopoly dough, just a way of keeping score."

Teaching kids about the world beyond school: "Just as it's crucial for underprivileged kids to be shown that there are possibilities beyond their neighbourhoods, it's also important for overprivileged kids to see other sides of life. I didn't want my kids to grow up in an abstract world of deals and numbers and money that just happened. I wanted them to understand that people worked hard, at a gloriously wide range of things, and that there was dignity in all of them. So I bought a big stretch van - my rolling locker room - and started taking my kids and their friends on what I thought of as Real World Outings. They were like school field trips, but without the onus of school. I was never "Mr. Barton". I was always Peter. [...] Every outing had a theme. "Grease" - where we looked at the realities of fast food. "Garbage" - where we followed the trail of household trash, and of recycled cars and asphalt and concrete. [...] Sometimes, at the end of our outings, there'd be the strangest sound in the van: silence. How rare was that? Ten or twelve kids, thinking something over."

Oh and a practical one about job applications: [after finishing his MBA] "As a matter of personal preference and quality of life, I would only work in Boston, San Francisco, or Denver. Well, with all those conditions I was clearly limiting my options. But I did my homework, and I came up with a list of possible employers. I started with a personal Who's Who of 231 names and sent each of them a letter [offering to work for free for a period]. Amazingly, 123 CEOs responded. For various reasons, that group was gradually whittled down to three possibilities in Denver. There was a hippy tea company and two-cable television outfits. The tea people didn't really want me, and of the cable companies was already top-heavy with MBAs. That left a dinky little outfit called TCI, which was headed by a seat-of-the-pants, feet-on-the-desk visionary named John Malone. From our very first conversation I realized that Malone was the guy I wanted to work for. He thought huge. He was informal, original, and totally audacious."

And one last quote in closing: "If I have anything at all to teach about life, it probably comes down to these two simple but far-reaching notions: Recognizing the difference between a dumb risk and a smart one, and understanding when you need to change direction, and have the guts to do it."

My Story

I'm always fascinated with the next chapter after our lives and books like these or Bronnie Ware's actually help reduce the fear, at least for me. Don't get me wrong it's not something I'm seeking out actively but there was a period in my life when I had to face it, very fortunately my story turned out better than Peter's.

Let me explain. Many years ago I was diagnosed with an advanced stage cancer, fortunately however it was entirely treatable. I still remember learning about it at first. I was in my car and everything around me has seemed to have slowed down with an odd sense of quietness that to this day I cannot describe. At first you go through phases of denial (i.e. I'm way too healthy, way too young, and so on) and then you realise that there are no ways around it, only through it. Over the next few weeks I've read everything I could get my hands on about what this is, what's involved in terms of the treatment, side effects but nothing can prepare you for the shock that you are going to experience.

The physical pain and side effects are one thing, however what's tougher is dealing with your own psychology. I'll spare you all the horrors about the first part, however the second is worth exploring a bit. I've realised that it's not until you accept that you have this illness you can face it head on, and the earlier you accept the better. Once your mind is fully on board you've conquered yourself and your fear, which is half the battle as they say. I mean it. I've experimented with different approaches to going through treatment days but what always worked is going to the hospital in the right state of mind (i.e. that this can be cured and I'll do my best to do it). This was a game changer. At the very beginning there were days when I just couldn't bring myself to be fully functional and that was trouble. A standard one day treatment would take two days, there would be complications, pain and so on, so these experiences served as a good guidepost that no matter what you just cannot give up. Perhaps the saddest part that I had to experience and see first hand is children and the elderly having to go through this pain and sometimes having the worst outcome. It's just simply unfair and terrible to see the vulnerable go through this but you've to block these events out otherwise they'll overwhelm your mind.

I'd share one short story from that year. I came to the very end of the treatment, however unfortunately I wasn't yet fully cured. This was hugely negative as I was completely exhausted by the end. The doctors (to whom I'm eternally grateful) suggested more and stronger treatment, but as they say doing the same thing over and over again and expecting different results is insanity. I thanked them for their help and guidance but politely declined and took three peaceful months off from everything. I went with my gut and experienced a strange sense of calmness. At the end of the third month a regular check-up showed that I was fully healed. Cancer treatment puts a huge amount of stress on your body (it's why people lose their hair for instance) and somewhere deep down I knew that ultimately doing more of the same wasn't the right answer. I would have only gotten weaker or who knows what would have happened. The downside to this three month break would have been a few months delay in this treatment if things didn't turn out for the better. Sometimes your gut already knows what's best for you, you just have to listen to it. Since then I'm watching my health like a hawk, sometimes driving doctors crazy.

Extreme events in life have a tendency to reduce the fear we experience and it is no different for me. Your worst case scenario (i.e. what's the worst that can happen if I do ABC) shifts drastically. Interestingly it didn't make me believe that I'm infallible, but more rational I'd say and grateful for all the opportunities I got since. Life just snowballs for the better once you let go.

I've been thinking throughout the years the lessons I've learned from this experience and over time have whittled it down to four that I'd like to share that might be helpful if you find yourself in a tough spot:
  • Accept your situation. It doesn't mean giving up but the earlier you are ready to face reality the earlier you can start affecting outcomes
  • Figure out your next move. Once you took control back of your own mind you are ready to make a plan. I did a lot of homework to understand what I'm facing, read everything I could get my hands on, talked to people, reorganised my life so that healing would be the number one priority. And I followed through that plan regardless of the pain
  • Have a great support network. This is hugely important. I'm eternally grateful to my family, friends, doctors and all the acquaintances that stood by me during this year. The treatment is something you've to go through yourself (and I never let anyone come to the hospital with me) but boy having people who look after you, guide and support you makes the recovery easier. Interestingly, this little exercise was also helpful in figuring out the people I should cut from my life...
  • Make the most of it (because "enjoy it" would be morbid). It's very rare that something this extreme happens in your life (and I truly hope that it was a once in a lifetime thing) but these events have a tendency to prepare you for next chapters in your life so don't let a day go by unused. Make plans and execute. It made me more focused, determined and as I said above the most important lesson for me was learning to manage my own fear
The main message for me after reading Peter's book (and without trying to sound too much of a cliche) is that today is the youngest you are ever going to be. There are many types of lives that we live (some large, some small depending on your definition) but the end is universal, it just comes and you don't know when. The question is what you want to accomplish between now and then.

I highly recommend this book for anyone interested about life (and death), how to pack a lot into a short life, business and many other topics. Reading this will make you cry, if not then there is probably something wrong with you. As I was reading more and more about Peter I came across a great two hour interview with him that is just full of wisdom and great insights, highly recommend watching that too (also great insights into the early days of TCI and John Malone)!

Additionally, here is an insightful interview with author Laurence Shames on his experience of writing this book.

All the quotes are sourced from: Not Fade Away: A Short Life Well Lived by Laurence Shames and Peter Barton (Amazon)

Weekend reading

Encouraging Words for Aspiring Fund Managers - Arnold Van Den Berg (Manual of Ideas)

Wuhan: China’s Travel Hub (Mark Mobius)

Interesting take on the current MLP landscape. A Crisis In Ponzi-Land (MLP Style) (Adventures in Capitalism; Part 1 and Part 2)

George Soros, Stan Druckenmiller (Money World, May 1, 1994) (Value Walk)

Great write up on Nintendo. Wii Would Like to Invest in Nintendo - SumZeroYahoo FinanceWrite Up
Joshua Kennedy of Sonian Capital Management has earned an impressive 25% avg. total return across 14 ideas on SumZero. His latest thesis, a long on struggling game giant Nintendo (7974:JP), quickly captured a 98% peer-rating, and focuses on a market where Kennedy has demonstrated consistent analytical prowess: Japan. SumZero sat down with Mr. Kennedy to discuss the details of the high-uncertainty, low-risk Nintendo situation, and how the company could be poised to take mobile by storm with its classic characters.

China’s Deal Makers Have Disappointed (DealBook)

THE HABITS OF WINNERS (What I Learnt on Wall Street)

Sir Tim Rice Full Q&A (Oxford Union)
Sir Tim Rice: An Academy Award, Golden Globe, Tony, and Grammy winning lyricist responsible for some of the most iconic musical stage and film productions of all time, including Joseph and the Amazing Technicolor Dreamcoat, Evita and The Lion King. Sir Tim is best known for his collaborations with Andrew Lloyd-Webber which have become permanent fixtures on stages around the world and are loved by millions across the generations. He was knighted in 1994 for services to music and continues to be a vocal advocate of the power of the musical. 

Rhythm and booze: the battle to recruit young drinkers (FT)
For years the drinks industry has poured money into a music scene that celebrates alcohol. How will they react to trends that show their target audience drinking less?

Snowboarder Shaun White interviewed by Tim Ferriss

Saturday, 13 February 2016

Books I read (or re-read) in 2015

My goal is to read at least one book a week so around 50 a year. Sometimes it works out to be more, sometimes less but over the years it has proven to be a good bogey. Some people are shocked by the number (personally I don't think it is a big deal) but what I've found is that most books aren't worth reading cover to cover. I view myself as a "gold miner" when it comes to books i.e. seek out the few core principles, lessons or stories that I can apply in my life and ignore the rest. Most books these days will only contain that much anyway thus it is not too difficult to get through large volumes. I read practically everything I can get my hands on with the exception of fiction, unless it has some ties to the real world (such as the Noble House that I mention below).

Below is a list and quick summary on all the books I read last year and also the ones that are on my nightstand currently. If you have any recommendations do let me know via e-mail or Twitter. Thank you!

2015 Booklist

  • Guy Spier - Education of a Value Investor: In the form of an autobiography Guy details his travels through Wall Street, starting out as a hotshot MBA and going through a few humbling episodes in his life that brought him closer to his centre, both as an investor and a human being. Highly recommended for investors who are just starting out and who have been in this business for a long time. What I liked most about this book is Guy's approach of putting it all on the table and expressing all of the vulnerabilities that we go through as investors. It is very unlikely that you'll ever read a book like this from a fund manager at a large asset manager
  • Daniel Amman - King of Oil: The story of Marc Rich and the company that was to become Glencore. Highly controversial figure but a very good perspective on the development of the modern crude oil business
  • James Clavell - Noble House: For all the sinophiles out there. This book is part of Clavell's Asian Saga series and tells the story of the Noble House (i.e. Jardine Matheson) as a fiction, though you'll recall plenty of connections to the real world if you read between the lines. In case you don't want to read through 1,400 pages, this story was also made into a TV series with the young Pierce Brosnan as the Tai Pan
  • William Thorndike - Outsiders: This book never gets old
  • Ed Catmull - Creativity Inc: This is probably the best business book I read in a good while. Through reading this book you'll get a good glimpse into the inner workings of Pixar and their approach to nurturing creativity, talent and movie ideas. Highly recommended
  • J Paul Getty - How to Be Rich: A very easy read full of life stories and anecdotes. His mantra for success: "rise early, work late, and strike oil"
  • Robert Smith - Riches Among Ruins: The trading of emerging and frontier market debt today is conducted via brokers, however not too long ago everything took place on the ground. Smith, one of the creators of this market, details his travels and investments through Latin America, MidEast, Asia and Eastern Europe. Recommended for people interested in financial history, exotic locations and tales of dealing with questionable characters
  • Peter Lynch - One Upon Wall Street: No introduction necessary
  • Norman Berryessa - Global Investing: The Templeton Way: A book from the 1980s about about the concepts of global investing that Templeton was a proponent of
  • John Train - Money Masters: Investment methods and techniques of the greats. The book includes interviews and profiles of Buffett, Lynch, Fisher, Robertson, Soros et al
  • Danny Meyer - Setting the Table: I've re-read this book just as Danny Meyer's Shake Shack empire was going global. He gives a behind the scenes look into his "enlightened hospitality" concept. Great read
  • Jack Schwager - Market Wizards and New Market Wizards: I think this requires no description
  • Jeroen Bos - Deep Value Investing: A practitioner's guide to deep value investing. Jeroen is a very experienced investor and this book illustrates his investment successes and lessons learnt in an easy to read way. Great to complement Peter Cundill's book
  • Claire Barnes - Asia’s Investment Prophets: Claire Barnes (of the Asia Apollo Fund) interviews some of the investing legends in Asia. An out of print, very hard to come by book (it goes $9,000 on Amazon) written in the style of the Market Wizards
  • Janet Tavakoli - Dear Mr Buffett: Another take on the global financial crisis from the perspective of the author and Buffett
  • Mark Mobius - Passport to Profits: Written during the Asian financial crisis so it gives an interesting perspective to global and EM investing from Mark Mobius
  • John Neff - Neff on Investing: Neat little book on Neff's contrarian investment approach in running Vanguard Windsor and Gemini II Funds
  • Steve Stoute - Tanning of America: Steve Stoute (also Jay Z's business partner) uses his perspective as an entrepreneur and ad man to describe how hip-hop changed popular culture forever via fashion, entertainment and even consumer behaviour. Great to listen as an audiobook
  • Ricardo Semler - Maverick and Seven Day Weekend: The story of Semco and how to put employee satisfaction as the first principle
  • Dan Pena - Your first $100m: Dan Pena's methods of reaching financial freedom. It is actually a very no-nonsense book about creating a roll-up
  • MJ DeMarco - Millionaire Fastlane: Similar to the above. Worth reading through it
  • Mohnish Pabrai - Dhando Investor: Great little investing book from Mohnish
  • Ben Horowitz - The Hard Things About Hard Things: Similarly to Creativity Inc, it is one of the best business books I read last year with a lot of practical applications. Oh and how could I forget Horowitz's quoting of hip-hop lyrics throughout this book
  • Ronald Chan - Behind the Berkshire Curtain: Helpful book in understanding Berkshire's operating companies and managers
  • Blake Mycoskie - Start Something That Matters: The inspiring journey of TOMS
  • Peter Bevelin - Few Lessons from Warren Buffett: A shorter version of Larry Cunningham's book in summarising the core principles of Warren Buffett
  • Howard Buffett - 40 Chances: I'm hugely interested in agriculture and it was very interesting to get Howard Buffett's perspective on how better farming techniques (albeit starting from a very low base) can have a dramatic impact in developing countries' development. It is certainly a great responsibility to give away $3bn+ in a meaningful way. Very enlightening read
Anything that's not business or investing related
Books that are currently on my nightstand

Weekend reading

Investing 101! (SAFAL NIVESHAK)

Amit Wadhwaney Lecture (Fundoo Professor)

Great interview with Christopher Mayer about his recent book 100 Baggers (5 Good Questions)

2016 Daily Journal Corp Meeting Notes (ValueWalk)

Insightful presentation on the "platform company" boom in the context of historical boom/bust cycles of conglomerates and REITS (via Value Investing World)

Great article from the FT on the excesses of very highly levered Chinese acquisitions (FT)
The warnings are clear for ChemChina. The company behind China Inc’s biggest outward investment bid will be hoping to avoid the unhappy experiences suffered by some of the country’s earlier trailblazers.

The state-owned oil company Cnooc , for example, ran into problems after it paid a record $15bn in 2013 for Nexen, one of Canada’s largest oil firms. Cnooc began with good intentions, paying a 60 per cent premium to Nexen’s share price, only to suffer from the prolonged slump in global oil prices. A huge pipeline spill and a retreat from promises to safeguard Canadian jobs — it fired senior Nexen executives and laid off hundreds of staff — have further dented goodwill around the deal. Investments by other Chinese stalwarts have also hit turbulence, falling at regulatory hurdles or unravelling for commercial reasons.

ChemChina’s dream of snapping up Syngenta goes back a long way (Deal Street Asia)
Very thorough discussions on China's place in global politics, the formation of the AIIB and many more topics: LSE SU China Development Forum 2016 - Navigating Complexity (LSE Podcast)

A Dozen Things you can Learn from the Anti-Models that are Bernard Madoff and his Victims (25iq)

I've been going through old articles about Ted Weschler. If you happen to have old letters or other materials about him I'd be delighted to read them
Meet Ted Weschler: Buffett auction winner, Berkshire's new hire (Fortune)
Weschler Rise From Grace Leads to Role Advising Buffett (Bloomberg)
A Disciplined and Driven 'Connect-the-Dots' Investor (WSJ)

Neil Strauss (author of The Game and The Truth) interviewed by Dave Asprey – Situational & Behavioral Awareness (Bulletproof Radio)

Joe Rogan interviews Mark Sisson from Mark's Daily Apple on the primal lifestyle (JRE)

Your Body By Darwin (LSE Podcast)
An evolutionary understanding of our bodies throws new light on why we get ill and how to cure disease. Jeremy Taylor reveals compelling insights from the rapidly developing field of Darwinian medicine.

What Americans Used to Eat (Priceonomics)