Books I read in 2023

This post contains reflections and notes on some of the books I read in 2023. Like in previous years, I read mostly non-fiction, and my 2023 list seems (in retrospect) focused on finance, economics, and global trends.

In addition to the books summarized here, I read Born a Crime by Trevor Noah, a fascinating and entertaining account of his life growing up in apartheid South Africa. I recommend the book, though be warned that it has some strong language and unpleasant situations.

For each book below, I provide my general impressions and a summary of key points. As always, errors and omissions are my own.

Previous posts: books I read in 2022, books I read in 2021.

The Battle for the Soul of Capitalism

This book is written by John Bogle, who probably did more to popularize low-cost index funds for American investors than any other single person. Low-cost index funds have now overtaken actively managed funds in the US, thanks in no small part to Vanguard, the company that Mr. Bogle founded. I’ve long admired Mr. Bogle’s contributions to investing and thought the title of this book was compelling.

The core thesis of the book is that American capitalism has been corrupted; instead of being run in service of investors (the owners of a company), it is now run for the benefit of various sorts of managers, both corporate managers and investment managers. The book is a detailed and fairly technical account of the depth of the problem — well supported by numbers and anecdotes — and some suggestions for solutions.

The book helped me understand the different types of entities that play a role in a healthy investment market. I found the book slow going because of its detailed and technical nature, and I’d recommend a shorter version for those who are interested in the key points but don’t have the necessary background (or patience) to read the entire book.

Note that this book was written almost 20 years ago, and there have been some reforms (e.g. around stock option expensing) in the intervening years; however, I don’t think Mr. Bogle (who died in 2019) would say that the problems he highlights in this book have been solved.

Summary

• American capitalism is the source of much of the country’s success, and has resulted in vast luxury for its citizens and influence across the world. However, American capitalism has morphed in recent decades from owners’ capitalism to managers’ capitalism, providing disproportionate rewards to corporate managers, and managers of investment capital, rather than to the investors themselves who take all the risk and put up the capital.
• There are three major participants in the economic system: “corporate America”, “investment America”, and “mutual fund America”.
• Corporate America has an “agency problem”, where the managers of corporations award themselves excessive compensation aided by pliant boards of directors. Driven by large stock option grants, the total pay of the average CEO has gone from 42x the average worker in 1980 to 280x in 2004. In addition, there is increased emphasis on financial engineering to manage earnings to the expectations of investors and inflate stock prices.
  — The author’s recommendations for reform include: providing more disclosure to owners about how mutual funds vote on corporate resolutions; having independent boards of directors that can better represent investors, with a truly independent mindset; requiring expensing of stock options; basing executive pay on company performance relative to peers; and providing more detailed reports that allow focusing on long-term company health, including details of specific accounting practices.
• Investment America consists of company shareholders, who have in recent years become more interested in short-term stock prices than in the long-term, intrinsic value of companies. Even though the largest shareholders in America are large financial firms, they rarely assert their rights of ownership, neglecting their own duties to the individual shareholders whose money they manage.
  — The author’s recommendations for reform of “Investment America” include: shifting investors’ mindset from short-term speculation to long-term buy and hold investing; focusing on dividends as a “real” measure of a company’s profits, as opposed to reported earnings which can be easily gamed through financial engineering; and for institutional investors to vote in ways that preserve the independence of the board and external auditors (for example, voting against making the CEO also the board chairman, and against company auditors who also provide consulting services to the company).
• Mutual Fund America is an $8 trillion (at the date of the book’s writing) industry in America. In addition to not properly exercising their rights of ownership in the corporations in which they invest, the mutual funds themselves have the same problem of managers’ capitalism vs owners’ capitalism as Corporate America itself. Mutual fund managers charge very high fees that have resulted in as much as 20% of the total annual stock market return going to fund managers, and over an investment lifetime will result in a staggering 75% of an investment’s cumulative return going to fund managers rather than the original investors. In addition, they focus on salesmanship, trying to attract as many investors as possible to invest in an array of funds that follow the trends of the day, rather than being prudent stewards of capital for their existing investors.
  — Most mutual funds are run by a management company that is separate from the funds themselves. Vanguard is one of the only mutual fund companies that is truly mutual, in that the mutual funds themselves own the management company that oversees them. More mutual funds should follow this model.
  — In addition, mutual funds should publish more detailed information about the costs that investors in their funds incur, including not just expense ratios but the annualized expenses, transaction costs and the impact of sales costs on investor returns.
• The author recommends a national commission with the objective of restoring integrity to American capitalism, and driving a change from managers’ capitalism back to owners’ capitalism.

Extreme Ownership

This book was recommended reading for an event I attended in 2023; it’s written by a couple of former Navy SEALs based on their experiences fighting terrorists in Iraq in 2006. The premise of the book is that principles that work in the battlefield can also be applied to the business world. The authors have one chapter per principle, first describing how they learnt it during their time in Iraq, then explaining the principle, and then providing a case study of how they applied it in a real business situation.

The book is easy to read, and the core principle of Extreme Ownership resonated with me. I found the case study portions somewhat simplistic, and I did not personally enjoy the detailed descriptions of combat in each chapter. Overall, the book felt longer than it should be for its core ideas; however, it has some good ideas with direct work application.

Summary

• Leaders must own everything in their world. There is no one else to blame. It is the leader’s fault even when subordinates don’t do what they should.
• There are no bad teams, only bad leaders. As leaders, it’s your job to set and enforce standards, to identify weaknesses and make sure the team is working on overcoming them so that the standards are continually improving.
• Leaders must be “true believers” in the mission: only then can they align their own team with the mission. If they question the mission, they must ask questions up the chain of command till they do understand why; it is also incumbent on senior people in the chain of command to answer questions from people in their team until those people understand the “why” of the mission. Without this alignment, missions and businesses are more likely to fail.
• Leaders should operate with a high degree of humility. Controlling the ego is very important, because ego can disrupt the planning process, the ability to take feedback or criticism, and so jeopardize the mission.
• The authors introduce “Four Laws of Combat” from their experiences in the battlefield that also apply to business:
  — Cover and Move: Teams should work together to support each other. When someone is in trouble, people should step in to cover for them, and ensure that the team continues to make progress. In failure, there should be no finger pointing.
  — Simple: Plans must be simple and easy to communicate, so that there is no ambiguity and it’s clear to everyone on the team what their role is.
  — Prioritize and Execute: Leaders must avoid getting overwhelmed when there are multiple pressing problems to solve. They must determine what problem is highest priority, and direct the team’s effort to solving it before moving on to the next one. They should stay strategic so they can stay ahead of the most immediate problems, and see other problems that may be developing in the future.
  — Decentralized Command: Large teams should be broken down into smaller teams of five people or so that can operate independently with clear responsibilities. The leader of the overall group should align the team with the overall mission — the “Commander’s Intent” — and establish clear roles and responsibilities for each sub-team. Each sub-team should then be able to operate effectively to make progress toward that mission, operating within their decision-making boundaries.
• Planning is an important part of a successful mission. Planning should start with a clear articulation of the “Commander’s Intent”, the end state, and explore different options for getting to that end state. Once a specific option has been selected, planning should be delegated down the chain so that individual sub-teams can in turn plan how to achieve their part of the overall plan. After an operation, it’s important to have a debrief to learn what went right and what can be improved.
• As a leader, everyone in your team must be able to connect the dots from their own work to the bigger picture. Equally, you should be able to connect the dots from the work your team does to your own leaders’ strategic goals. You may need to “lead up the chain of command” and engage with your leadership chain to get the resources your team needs to succeed, while also understanding the constraints that your leaders operate under.
• Leaders must be able to make decisions with incomplete information; otherwise they risk losing through inaction. Being decisive amid uncertainty is an important leadership skill.
• Discipline equals freedom: when teams follow disciplined processes in their normal operations, they have the freedom to improvise when it’s necessary to deviate from those processes due to unexpected circumstances.

Factfulness

This was a Bill Gates-recommended book a few years ago — he called it “one of the most important books I’ve ever read”. Hans Rosling, the author, was a Swedish physician and academic who worked widely around the world for decades. He started the Gapminder Foundation to educate people about the true state of the world; he believed that most people around the world do not understand how much progress the world has actually made, and are overly pessimistic about where we are and our ability to solve the major problems facing us today.

The book divides the world into “levels”, from Level 1 (poverty) to Level 4 (affluence); one of the core ideas of the book is that the world doesn’t just have “developing” and “developed” countries, and instead countries lie on a continuum across the levels (this graph shows where countries are across the levels as of 2022). Further, families in one country may be more similar to a family at the same income level in another country than they are to a much richer or much poorer family in the same country; the website Dollar Street shows this visually through artifacts that families at different income levels in different countries use.

The author then talks about 10 different “instincts” (biases) that prevent people from seeing the world as it really is.

I found the book eye-opening and thought-provoking, a highly evolved way of seeing the world. Some of the “instincts” can feel slightly repetitive and similar to each other, but the passion and wisdom of the author comes through clearly. Unfortunately, Hans Rosling died in 2017 at the age of 68, but his ideas are well articulated here. I highly recommend this book.

Summary

• Most people are ignorant about the state of the world, believing a number of things that are not backed by data (on a sample quiz, even very learned audiences do worse than random guessing). The world is getting better by a large number of metrics, but people often think that is getting worse. Factfulness is the attitude of having a fact-based worldview.
• People throughout the world live at one of four income levels: Level 1 is extreme poverty, Level 2 is being able to afford a bicycle, Level 3 is having a running water tap, stable electricity and a motorcycle, and Level 4 is how most people in rich countries live. As of the book’s writing, the distribution of people at these levels is 1–3–2–1: 1 billion people live at Level 1, 3 billion at Level 2, 2 billion at Level 3, and 1 billion at Level 4. People can be at Level 4 even within countries at Level 1.
• People have a misunderstanding of the world because of one or more of the following instincts:
  — The Gap Instinct, which divides the world into “rich” and “poor” countries; in reality, countries lie on a continuum of wealth, with most of the world’s population living in countries that are middle-income. To combat this instinct, look for modes (where the majority are), rather than relying on averages.
  — The Negativity Instinct, which tends to focus on bad news but ignore all the good news about the world. Even countries we consider firmly on Level 4 today were on earlier levels not very long ago: for example, Sweden was at Level 3 when the author was born and at Level 2 when his mother was born. Many other countries are following similar development trajectories. To combat this instinct, realize that good news is almost never reported, and seek out the facts.
  — The Straight Line Instinct, which assumes that increases will continue forever. For example, many people think that the world population will keep increasing rapidly, while in reality the rate of change has significantly reduced. To combat this instinct, remember that straight line curves are very rare in practice.
  — The Fear Instinct, which is based on remembering the most frightening things and extrapolating them to statements about the world. For example, the number of deaths per year from natural disasters has decreased by over 50% in the last 100 years, but people vastly overestimate how many people still die from natural disasters. To combat this instinct, remember that frightening things get a disproportionate amount of attention and understand the facts.
  — The Size Instinct, which makes us pay attention to very small or very large numbers without considering the frame of reference. For example, the infant mortality rate has gone from 15% to 3% since 1950, but only paying attention to the absolute numbers makes people feel that no progress is being made. To combat this instinct, look for proportions, rates, percentages, or a comparison number rather than numbers in isolation.
  — The Generalization Instinct, which makes us group people or countries together that are actually very different. For example, people may think that everyone in a poor country is poor; in reality, there are people living at Levels 1 through 4 even in countries at Levels 1, 2 and 3. To combat this instinct, look for differences within groups or countries and similarities across groups or countries.
  — The Destiny Instinct, which makes people believe that innate characteristics determine whether countries are rich or poor, and that this means that poor countries can never get rich; in reality, most countries are getting richer, some faster and some slower than others. To combat this instinct, look for gradual improvements and remember that slow change is still change.
  — The Single Perspective Instinct, which makes people think that there is a single solution to every problem. For example, the idea that the private market can solve all problems leads to the US having a dysfunctional health care system, with the same life expectancy as Cuba despite a much higher per capita income. To combat this instinct, be humble and realize that there may be perspectives that you don’t see.
  — The Blame Instinct, which makes people think that there is a clear, simple reason for why something bad has happened; in reality, complex underlying incentives rather than simple explanations like greed explain why companies make decisions that may seem bad. To combat this instinct, look for underlying causes rather than pointing fingers at individuals.
  — The Urgency Instinct, which makes people make bad decisions under time pressure. For example, when advising an African government during the outbreak of an infectious disease, the author hastily recommended a course of action that caused several more deaths than if they had done nothing at all. To combat this instinct, take small steps and don’t act without good data.

The End of Poverty

This book was written in 2005 by Jeffrey Sachs, an economist and academic who, at the time he wrote the book, had spent three decades advising governments around the world on how to develop faster: Bolivia, Poland, Russia, China, India and others.

The core argument of the book is that we can end extreme poverty by 2025. Extreme poverty means a level of poverty where people cannot meet their basic needs for survival, defined by the World Bank as an income of $1 per person per day (in 2005) at purchasing power parity.

From the vantage point of almost 20 years later (and very close to 2025), we can evaluate where the world is relative to this vision: unfortunately, it looks likely that there will be over 500 million people living in extreme poverty even by 2030, though that is still down from two billion people in extreme poverty in 1990.

Still, this is an inspiring vision and an inspiring book: there are individual chapters on the author’s engagements with Bolivia, pre- and post-Berlin Wall collapse Poland, and 1990s Russia, China and India that are deeply fascinating. The broader developmental trends that the author outlines over the last 200 years in the early part of the book are fascinating as well; the latter part of the book is a set of detailed policy prescriptions on how to eliminate extreme poverty in 20 years that I found less interesting. Regardless, this is a book worth reading for the first-hand perspective of its author on development, and its optimism that we can overcome one of humanity’s deepest problems.

Summary

• The rise in prosperity in the last 200 years is unprecedented in human history; the world’s per capita income rose 9x between 1820 and 2000 after having grown perhaps 50% cumulatively between 1000 and 1800. In richer countries the gain between 1820 and 2000 was even faster — for example, per capita income increased 25x in the US and 15x in Europe over that period. The key was steady growth compounded over centuries — for the US, 1.7% per year over the 1820–2000 period.
• Poor countries may remain poor because of factors such as the lack of ability to accumulate capital, because whatever capital is available is needed just to survive, difficult physical geography (e.g. Bolivia), the government being in a fiscal trap (using all its revenues just to pay off previous debts rather than building infrastructure or providing services), governance failures, etc. All countries that have failed to grow have suffered from these contributing factors.
• The author introduces the term “clinical economics”, similar to “clinical medicine”, to diagnose why some countries fail to grow. Similar to clinical medicine, it’s important to undertake a process of differential diagnosis to determine the exact underlying factors that need to be overcome to break the country out of poverty. Economists cannot make the same prescription to all countries.
• The rich world had committed (as of 2005) 0.7% of GDP as direct developmental assistance to countries. The author shows that this level of commitment would be sufficient to eliminate extreme poverty globally by 2025, but most rich countries are well under this number — the US at 0.15% of GDP.

The Psychology of Money

I heard about this book on a finance podcast, and it seems to have become part of the “financial zeitgeist” over the last couple of years. It talks about biases that people have about money.

I went into it expecting it to be fairly shallow, which it is to some degree — it is meant to be a book about a subject (personal finance) that many people find intimidating, so some shallowness is reasonable — but it is a pleasant, easy read and has many interesting nuggets of information. It was a more entertaining read than many other books, and it covers sound principles that have been expressed (in a somewhat less accessible form) by people like Charlie Munger. I recommend this book as a jumping off point for thinking about your own attitudes to money.

Summary

• People’s attitudes to money and risk are heavily influenced by their life experiences. It’s important to understand your own biases that affect your psychology around money.
• Luck plays a major role in success. For example, if Bill Gates hadn’t had the good fortune of going to one of the very few high schools in the US that had access to a computer in the 1960s, he might never have started Microsoft.
• Warren Buffett says: “There is no need to risk what you have and need for what you don’t have and don’t need.” Have a sense of how much is enough, don’t compare yourself to others, and don’t keep moving the goalposts.
• It’s worth understanding the power of compounding. Of Warren Buffett’s $84.5 billion net worth, $84.2 billion came after his 50th birthday and $81.5 billion after his 65th birthday.
• Good investing is more about consistently not making mistakes than about consistently making good decisions. Having a survival mentality with money — never putting yourself in a position where you can be “wiped out” — is very important. You should have a “barbelled personality” — optimistic about the future, but paranoid about risks that can wipe you out.
• Tail (unlikely) outcomes drive a large percentage of investment returns. For a broadly diversified index like the Russell 3000, effectively all of the index’s overall returns came from 7% of the component companies, with the vast majority of companies in the index losing most of their value over a period spanning several decades.
• This means that rather than focusing on making a few good investments, you should focus on investing consistently over time in the stock market via diversified index funds so that you benefit from the tail outcomes.
• The highest form of wealth is the freedom to spend your time however you want. According to research by the psychologist Angus Campbell, the highest determinant of happiness is a “strong sense of controlling one’s life.”
• Don’t try to use possessions to be respected and admired by others. Humility, kindness and empathy will bring you more respect than anything you can buy.
• Building wealth is more dependent on your savings rate than your income or your investment returns. Having a high savings rate helps you grow your savings through compounding, and gives you flexibility, which is important in a fast-changing world.
• Aim to be mostly reasonable rather than mathematically rational at all times. A mathematically rational approach may be hard to stick to during difficult times.
• You should be cautious about using history as a guide to predict the future, because history doesn’t account for outlier events in the future, and because the world itself is changing structurally all the time. For example, the Fukushima nuclear reactor was designed to withstand the most severe earthquake in recorded history, but the designers did not realize that that prior earthquake was itself unprecedented when it happened — so the reactor was under-designed for the 2011 earthquake, which was more severe than the historical maximum.
• Always leave a margin of error in your plans — related to the “survival mentality” mentioned above. Avoid “single points of failure” in your plan, such as the reliance on a single paycheck to fund your expenses.
• Take into account that your needs and desires will change dramatically in the future — the “end of history” illusion is what psychologists call the phenomenon where people recognize that they have changed significantly in the past, but underestimate how much they will change in the future.
• Volatility of the stock market is the price that you have to pay for inflation-beating returns over decades. The S&P 500 averaged an 11% return a year from 1950 to 2019, but over most of that period the index was 5% or more below its previous all-time high.
• Different investors have different time horizons (sometimes minutes, as in the case of day traders, to decades). Don’t take your investment cues from people with different time horizons than you.
• Pessimism is more psychologically compelling than optimism, partly because of the asymmetric psychological effect of losses vs gains as discovered by Daniel Kahneman: losses are more keenly felt than gains of the same magnitude. Stay optimistic, which the book defines as a belief that the odds of a good outcome are in your favor over time (and which has generally proven to be the case in economic terms).
• Be aware of stories that you may be believing because they align with what you want to be true. People fill in gaps in their knowledge with narratives, also explored in Thinking Fast and Slow by Daniel Kahneman. Market forecasts are often wrong, but there is a strong desire to have them, because people want to believe that they know what the future holds.
• Principles of managing your money:
  — Understand that both positive and negative outcomes are affected to a large extent by luck
  — Save more by suppressing your ego to build wealth
  — Manage your money in a way that helps you sleep at night, even if it’s not the most mathematically optimal
  — Increase your time horizon for investing, and accept volatility
  — Use money to gain control over your time
  — Save without a specific goal
  — Maintain room for error
  — Accept risk, but avoid ruinous risk
  — Don’t be influenced by people playing a different financial game (in terms of time horizon or their own goals) than you

The First 90 Days

This was one of the more job skills-oriented books I read in 2023; I read it in the early days of a new role because I had heard positive things about it from a few people. The book is about techniques you can use to settle in successfully into a new role. I found the book tedious to read; it felt overly prescriptive and formulaic, and much too long. It may be helpful to people who are moving roles for the first time (or after a long stint in a single role), but even so the high level principles are probably more useful to remember than the nuts-and-bolts techniques for acclimatization on which the book spends a lot of time.

Summary

• Transitioning well is critical to success in a new role.
• You want to avoid a vicious cycle of inadequate learning which in turn leads to bad decisions and lost credibility, which make it hard to have impact; instead, you want a virtuous cycle of making good decisions founded on the right kind of learning, which help build credibility and result in wins and alliances.
• The steps involved in a successful transition are the following.
• Prepare yourself mentally to break with your old job
  — A promotion is also a new job. When in a new role due to a promotion, you should determine how to balance your broader set of responsibilities with depth from your previous role, what to delegate, and how to communicate, influence and exhibit the right level of leadership presence for your new responsibilities.
  — When onboarding into a new company, you should consider the following four pillars: understanding the business context, identifying and developing relationships with key stakeholders, aligning on expectations with your boss and peers, and adapting to the culture of the new company.
  — You may find it helpful to establish a clear “breakpoint”, or a time at which you mentally disengage with your old role and embrace your new role.
• Accelerate your learning: learn as much as you can about the new organization and its environment
  — Define your learning agenda, or what you want to learn. This will include questions about what happened in the past; questions about present vision, strategy, people and processes; and questions about the future such as challenges and opportunities.
  — You should meet with a variety of internal and external people to get answers to these questions: customers, suppliers, operations people, sales, cross-functional team members, or especially knowledgeable “old-timers” at the company.
  — Once you have your learning agenda and the people you want to interview, you should talk to them one-on-one. You should ask each group of people the same set of questions so that you get comparable information.
  — You can distill your learnings into a SWOT analysis or similar material to align on your findings with others.
• Match your strategy to the situation: understand what sort of organization you’re coming into and what the right strategy is
  — There are five major types of situations, with the acronym STARS (startup, turnaround, accelerated growth, realignment, and sustaining success), in which you might find yourself; different parts of your portfolio might be in different stages.
  — Startup situations are where you are getting a new business or initiative off the ground. You have the freedom to build a team from scratch, but you will likely have limited resources.
  — Turnarounds require you to get a business that is recognized to be in trouble back on track. You’ll need to make difficult decisions such as cutting your team down and building it back up.
  — Accelerated growth situations are where you are tasked with scaling up an organization that has found early success. You’ll need to put in place structures and processes to rapidly expand the business, and absorb many new people while maintaining culture.
  — Realignment situations are where an organization is in trouble but there may not be acknowledgment that there is a problem. You’ll need to get people to recognize that there is a problem before you can start making major changes.
  — Sustaining success is where an organization is doing well and you are responsible for taking it to the next level. You should identify which parts of the organization fit into startup, realignment or accelerated growth situations, and act accordingly in those areas.
• Negotiate success: Talk with your boss about expectations and your 90-day plan
  — Have conversations with your boss about the following topics: situational diagnosis (align on what you see as your STARS portfolio), expectations (what success looks like in the short and medium term), resources (what do you need to be successful), style (communication methods and modes of working), and personal development (developmental priorities, where you’re doing well and need to improve).
  — Make sure to have the same five conversations with your direct reports. They are undergoing a transition as well as you.
• Secure early wins: Identify ways to add business value within the first 90 days
  — New leaders plan success in distinct waves: focused learning followed by a set of changes, then a period of deeper learning, followed by deeper changes, with a final wave of fine-tuning and consolidation.
  — Focus on your long term goals as you plan your initial changes.
  — When planning changes, make sure to: focus on a few key opportunities; to focus on things that matter to your boss; get wins in the right way rather than by doing anything that might be seen as underhanded; keep your STARS portfolio in mind; and adjust for the organizational culture.
  — Launch a few early-win projects.. You may need to get alignment on the need to launch those projects. Also consider factors such the external environment, internal capabilities and organizational politics that can lower your chances of success.
• Achieve alignment: Bring your organization’s direction in alignment with broader goals.
  — Make sure that the following areas work together: your organization’s strategic direction (mission, vision and strategy); organization structure; core processes; and the skill base within your organization.
  — Instead of creating a SWOT analysis, which indicates working from internal elements (strengths and weaknesses) to external (opportunities and threats), create a TOWS analysis, which works from environmental factors inward to organizational factors.
• Build your team: Restructure your team as needed for the situation.
  — Assess your team early in your tenure. Do so objectively by creating evaluative criteria.
  — Within 30 days, make decisions about each person about whether to keep the person in place, develop them further, move to another position, continue observing, or replace them.
  — Develop an organizational vision to continue aligning your team as you make changes.
  — Make sure to treat everyone respectfully during the changes.
• Create coalitions: Build alliances to influence people outside your direct management control.
  — In order to effect change, you will in most cases need support from a broad range of people outside your team.
  — For changes you want to make, identify three types of people: supporters, opponents and persuadables. Draw an influence map to show patterns of influence.
  — Identify “pivotal people” and craft influence strategies tailored to them. Understand their motivations and situational pressures.
• Keep your balance: Make sure to tend to your own needs, and get advice where needed.
  — Transitions can be hard on you personally and on your family.
  — The three pillars of managing yourself are: adopting a 90-day strategy using the techniques in the rest of the book, and checking in regularly on how you are tracking against the strategy; creating personal disciplines such as setting aside time to plan, not over-committing and checking in with yourself regularly; and building support systems for your family and yourself, including a network of advisors.
• Accelerate everyone, including your boss, peers, and direct reports. Companies should develop a more structured approach to transitions through a formal transition support program, since poor transitions at a senior leadership level can be very expensive.

The Almanack of Naval Ravikant

This quirky book is about the principles of Naval Ravikant, a well-known Silicon Valley figure, by (apparently) one of his fans, Eric Jorgensen, himself an investor and author. The book is loosely structured, being mostly a set of quotes and principles from Ravikant that the author has compiled. I found it interesting to read and think about; there are many good principles in this book, and Ravikant seems like a grounded person who has his priorities right. (He can also come across occasionally as smug, but that may be unavoidable in a book of this sort.) I recommend this book.

Summary

How to get rich

• Wealth is having assets that earn money while you sleep
• To get rich, you must give society what it wants but does not know how to get, at scale
• Become the best in the world at what you do
• Specific knowledge, accountability and leverage are key:
  — Specific knowledge is knowledge that only you have: it can come from your DNA, your upbringing, and your experiences
  — Accountability comes from taking risks: accountability allows you to build credibility, which allows others to entrust you with resources like capital
  — Leverage is a force multiplier for your judgement: it can come from capital, other people working for you, or code/media; code/media is “permissionless leverage”

Ways to get lucky

• Hope to get lucky — “blind luck”
• Stumble into being lucky through persistence, hard work and hustle
• Become skilled in spotting opportunities that may seem like luck to others
• Become the best at what you do so that opportunity seeks you out

With leverage, having good judgment is more important than ever, since decisions have bigger consequences.

How to build good judgment

• Be able to think through things from first principles
• Be able to see things as they are, without your ego getting in the way (Richard Feynman: “I never ask if I like it or I don’t like it. I think, this is what it is, or this is what it isn’t.”)
• Think through your beliefs and discard those that aren’t well founded — any beliefs that are part of a package (Democrat, Republican) are suspect and should be re-evaluated from first principles
• Create mental models that help you make better decisions; a good way to build new mental models is to read a lot

Thoughts on happiness

• Happiness is the lack of desire for external things
• We often think of ourselves as fixed and the world as malleable, but it’s really we who are malleable and the world is largely fixed
• Happiness is a choice; it requires presence in the moment, and acceptance of things that happen
• There is a tension between happiness and success or purpose: happiness is being satisfied with what you have, but purpose or success often comes from dissatisfaction
• Envy is the enemy of happiness

Naval’s habits for happiness

• Meditation
• Presence in the moment
• More sunlight
• Desiring fewer things
• Dropping caffeine
• Working out every day
• Judging others less
• Telling others that he is a happy person — he feels forced to conform to that statement
• Minimizing the use of phones, calendars and alarm clocks
• Understanding that hedonic adaptation is more powerful for man-made things than for natural things
• Less screen time
• Staying optimistic

“Peace of body” leads to peace of mind: take care of your health first

One of Naval’s core values is “freedom”, but it has evolved. When he was younger, “freedom” meant “freedom to” — freedom to do whatever he wanted whenever he wanted. As he got older, it evolved to “freedom from” — freedom from anger, freedom from being forced to do things, freedom from employment, freedom from expectations of yourself or other people.

Naval’s other core values: honesty, no short-term relationships, only peer (non-hierarchical) relationships, no anger