Antifragile: Things That Gain from Disorder

Antifragile explains the more we try to ‘stabilize’ or control something to make it safe, the more unstable, dangerous or fragile it becomes. If you put out every small, localized fire in a forest, you increase the chance of a large scale firestorm. Similarly, the more a government tries to ‘shore up’ the economy to prevent a market recession, the more fragile the economy becomes and increases the chance of a big scale crisis. 

This also means if shielding things from randomness or shock makes them fragile, a certain amount of exposure to randomness improves it. For example, some (but not too much) stress is productive; some physical work is good for the bones; some fasting is good for the immune system etc.

On the information/knowledge level, we can think of constantly exposing our ideas, beliefs, investment thesis to a certain level of contradictory information that makes them less fragile. Since you’re always updating and calibrating your perception with reality, you’re less likely to be ‘caught by surprise’.

Black Box Thinking

We all know that failure is an invaluable source of learning opportunity, yet the stigma of failure often prevents us from embracing it. Matthew Syed looks into the culture of failure and explains how we can change our mindset and use failures as the stepping stone for success. He emphasizes that success, creativity, and innovation can only be realized through testing, failing, errors and making mistakes. 


What is the biggest concern right now? Trade war? No, it’s AI automation. Kai-Fu Lee, a computer scientist and the former president of Google China, looks into the history and culture of both China and United States, how they shape today’s tech giants, and what it means for the future of economy and society when AI competition between both countries heats up. Machines will eventually displace many middle-income jobs, but Lee offers his optimism on how human and machine can coexist and complement one another. 

The Laws of Human Nature

We aren’t aware of why we always behave in certain ways under certain conditions. Our thoughts and behavior are largely concealed from us, operating under the subconscious level. In this book, Robert Greene shows how understanding the laws of human nature will make you calmer, more observant, and less judgmental. You’ll learn how to avoid toxic dramas, alter negative thoughts and elevate yourself into a better being. I’ll be surprised if these traits don’t turn you into a better investor too. 

Where Good Ideas Come From

What do coral reefs and big cities have in common? They’re the innovation factories. Coral reefs are teeming with life diversity just as big cities produce more ingenuity inventions than small towns. Steve Johnson identifies the seven key principles of innovation and how to get more of them. Although I haven’t tested this hypothesis, there’s reasonable ground to believe that these seven principles can be applied to how we can discover more investment ideas overlooked by others. 

The Signal and the Noise: The Art & Science of Prediction


Range: Why Generalist Triumph in a Specialized World

One of the best books I’ve read so far this year. Investing is about problem solving. The problem is “Which company is going to deliver the return I’m after over the next 10 years?” David Epstein shows why a generalist – a person that knows a bit of everything – is more creative at finding connections and coming up with solutions compared to a specialist who only know one subject in depth. Epstein’s message echoed Charlie Munger’s advice to have as many mental models in your repertoire. It also reminds me of Philip Tetlock’s analogy of be like a fox (who knows many things) rather than a hedgehog (who knows one big thing).  

22 Immutable Laws of Marketing

What is the fuel for brands? Marketing. Understand the psychology behind marketing helps you understand what makes a brand a powerful moat. Brand distort logic. My favorite quote – “Marketing is a battle of the mind, not products”. Same can be said for brands.

Strategic Logic

The fundamental of competitive advantage is “a company can make money only if it is able to do something that the market wants and that its competitors cannot imitate; or if it is able to do the same things its competitors do, but more cheaply; or both.” How do we know if, when, and how such conditions exist? That is where strategic logic comes in. Strategic logic is more than analyzing different types of moats, but to understand how a company’s strategy and decisions such as whether to move into an adjacent market, integrate vertically, build or buy, and expand internationally, etc impact future profitability. Just as a simple decision like outsourcing an activity can spell success for a firm but trouble to another firm in a different industry, it is essential to understand the context, or logic, which these decisions are carried out.

Understanding Michael Porter 

Joan Magretta’s book distills the essence of Michael Porter’s work on how to analyze competition and understand strategy. Two reasons why this book is important. We have a misconception about what strategy truly means. Some would think automation is a strategy but that is just operational efficiency. A business has to do it to survive. In contrast, a strategy is a choice; a tradeoff between what to do and what not to do. Another reason is overconfidence. We tend to overestimate the success of a company when we fail to take into account what the competitors are doing. You will learn about the 5 forces of competition, what creates competitive advantage, how business creates value, and how activities within a value chain form a company’s strategy.

Capital Returns

A typical capital cycle looks like this: A company decides to reinvest all its earnings for aggressive expansion in order to meet strong demand growth. Fast-forward 5 years, the price has collapsed due to excess supply in the market, competitions from entrants, and little prospect of demand recovery due to a slow economy. 

Instead of analyzing future demand growth which is inherently challenging, capital returns analyze the ebb and flow of capital to understand how changes in the amount of capital employed within an industry are likely to impact future returns. High demand growth tends to encourage excessive capital investment which eventually lead to oversupply situation and lower return. How does this apply to companies with moats? Moat companies have the ability to prevent supply overcapacity through barriers. Therefore, ensuring a consistently high return. 

The Little Book that Builds Wealth

Companies that can create long-term wealth are often ones that can generate above-average profits. But most companies fail to do that consistently in the long run because above-average profits attract competition. Competition erodes profitability. However, some companies have managed to fend-off competition by building a barrier around their business. Commonly referred to as “moats”, these barriers are structural characteristics of a business that makes it hard for competitors to replicate. In this little book, Pat Dorsey uses real company examples to show how these moats deter competitors, as well as some common pitfalls investors should avoid such as overpaying for a stock. If you’re interested in finding and owning quality companies, this is a book for you.

Competitive Demystified 

Strategies are more than just increasing profit margin and make more money, but “plans that specifically focus on the actions and responses of competitors.” Growth and profitability are not enough because competition always acts as a balancing feedback loop to counter that. The core of strategies is about “creating, protecting, and exploiting competitive advantages.” Bruce Greenwald cuts through the chest to answer the question of how companies can manage competitions and fend off potential entrants by creating strategies that allow them to capture most of the profit.

7 Powers

Hamilton Helmer identifies 7 types of powers a business can acquire to earn above average return. These powers are like moats, they create a powerful barrier that prevents competitors from competing effectively while allowing the business to earn an abnormal return. Unlike the usual book that describe the characteristics of each power, Helmer dive into how each power arises along the life cycle of a company, the benefit, and barrier created by these powers, as well as the determinant of power intensity.

Risk Savvy

Less is more. Similar to Blink, Gerd Gigerenzer explains why a simple rule of thumb beats complex algorithm when making a decision in an environment that is highly uncertain where information is limited. Gigerenzer then shows us how using a rule of thumb and gut feeling can help us make a better decision in investing, finance, health, and even relationship.


Why is that our gut feeling can be so accurate sometimes while leading us astray other times? Malcolm Gladwell explore the power of rapid recognition, how thin slice can help us make better decisions, and the dark side of putting too much blind faith in it. Intuition is not the opposite of deliberation, but the two sides of a coin. Good decision making comes from intuition is the result of training and following a set of rules.

How Not to be Wrong

Jordan Ellsberg examines the simple yet profound mathematical tools for solving problems. Mathematical thinking is more than just numbers or precision, but as a hidden structure to good thinking. You’ll learn how to avoid common sense mistakes such as linear thinking (more is better),  jumping to conclusion (seeing pattern out of randomness), and start thinking in expected payoff, what could have happen instead of what happened, and be more like the fox (knows many things) than the hedgehog (know one big thing).

Deep Survival

Laurence Gonzales explores the question of why someone survives while others die in a disaster. This book is far relevant to investing than most people thought. Gonzales looks into the psychology on what makes people take risk, the role of hubris, the unpredictability of complex systems, and the importance of self-control. The ingredients of staying alive in a disaster are not that different from survival in the stock market: a good dose of humility, have a prepared mind, know what you don’t know, and an open-mindedness (beginner’s mind).

Thinking in Bets

Life, or investing, is not that different from a game of poker, we are trying to choose the best course of action (out of many) to improve our future payoff, which, of course, is fraught with risk, uncertainty, and luck. Annie Duke shows how we can make a smarter decision by thinking in bets, why relying on the outcome is dangerous, and tools that can help us think in a more rational way.

Shoe Dog

A memoir from the creator of Nike on the company’s 18 years journey as a private company. Phil Knight captures the chaos in the early days and many of its trying moments that will leave you on the edge of your chair. Shoe Dog is more than just a story about Nike and Phil Knight, but a meditation on life, passion, and the obsession of one crazy idea.

Bad Blood

Theranos was a tech unicorn valued at $9 billion in 2014. Its visionary founder, Elizabeth Holmes—touted as the next Steve Jobs—promise her technology will revolutionize the health industry, change how a blood test is done, and save countless lives. Except it didn’t. John Carreyrou detailed the secrecy and lies inside Theranos and everyone else that got pulled into the vortex. If there’s one lesson to take away, that is never let what you want to believe is true blindside you from seeing the truth.

Thinking in Systems

Systems are like Russian nesting dolls—a system that has its own subsystems is also part of a larger system which is part of another larger system. As an example, a supply chain consists of many different industries where within each industry, sit hundreds of companies. Each of these companies is further made up of multiple business units, which every single unit is again composed of several divisions and so on.

System thinking is about seeing things as a dynamic whole. Instead of studying the events generated by a system i.e raw material cost increase, lower selling volume etc, focusing on the system structure and the behavior it generates will make you a better thinker. You’ll understand why systems work so well (i.e a 100 years old company), why it surprises us (i.e market crash), and how each part of a system interact with one another to create nonlinear behavior.

Psychology of Intelligence Analysis


The Most Important Thing: Uncommon Sense for the Thoughtful Investor


Understanding Michael Porter: The Essential Guide to Competition and Strategy


The Checklist Manifesto: How to Get Things Right


The Drunkard’s Walk: How Randomness Rules Our Lives




The Black Swan: the Impact of the Highly Improbable






More Than You Know: Finding Financial Wisdom in Unconventional Places


The Education of a Value Investor

A personal account on how Spier went from a Wall Street trader to a value investor. Before you dismiss this as another book that promotes value investing (value investors thrive as a minority, not a majority), give me a benefit of the doubt and read it. This is more of a psychological than an investing book. One that will show you how you can shut out all the noise and still do well, even better actually. He hasn’t used his Bloomberg terminal for years.


Well, we talked about capital allocation. This book looks at how 8 CEOs transform their businesses into the best in class through wise decisions and plenty of hard work. If you can get something out of this book, it will the character of these CEOs, how capital allocation can make or break a business, and how to think independently and never go with the flow just because everyone is doing it.

Superforecasting – The Art and Science of Prediction

A must read for every investor. Tetlock examines some of the best minds in predicting and their thinking process. You will learn some of the great tools such as how to think probabilistically; outside view vs inside view, and be a fox, not a hedgehog.

What I Learned Losing a Million Dollars

I have not had a chance to read this but a book with great reviews. Jim Paul’s meteoric rise took him from a small town in Northern Kentucky to governor of the Chicago Mercantile Exchange and proceed to lost it all – his fortune, reputation, and his job. Something worth a read on psychological mistakes that affect all investors.

Economics in One Lesson

If you enjoy all the big economic news then you’ll like this. A simple book that will make you question everything. So next time when the government announces that they going to stimulate the economy by creating jobs, you’ll smell BS before everyone does. 

Sapiens – A Brief History of Humankind

One of the best book I’ve read this year. Covers everything from agriculture, the industrial revolution and the development of religion, language, currency etc. It will blow your mind and question everything you’ve come to believe to be the truth. How does this help? Investing is all about looking at things from a fresh perspective and through many different lenses.

Into Thin Air

A journalist’s personal account on an Everest expedition with a group of climbers that turns into one of the worst Mt. Everest disasters in history. If you can learn one thing from this book, it is to see risk in a new light – how risk can come at you from totally unexpected ways. It doesn’t appears when you’re right at the top of the mountain, but in every decision you made right before the climb. That applies to investing too. Risk doesn’t find you after you buy a stock, it’s been there all along.

Thinking, Fast and Slow

Written by a renowned psychologist and winner of Nobel Prize in Economics, Kahneman explores how our mind works and why we are the easiest person to fool. And again, a book that will help you avoid many cognitive biases and improve your decisions and judgments.