The Geometry of Wealth by Brian Portnoy – Book Review

Was I reading the right book?

When you have a “How to” in the title of your book, one expects that it is a more of a practical guide to whatever you are ‘HowTo’ing. And it is that expectation that led me to explore this book. The book is almost a year old but there only were a handful of reviews on Amazon. Also, 91% of them were 5-stars. But more of that later.

You will be sorely disappointed if you also expect this to be a self-help or an investing guide as its title unbashedly markets the book. This is more of a long-winded and tangential exploration of how wealth can affect happiness and human behaviour. I still gave the book a honest chance to understand the arguments the author was making.

The author starts off by dividing the book into three parts – each a logical step in planning and building wealth. Once this clear and useful definition is set up, the author goes on a detour. Somewhere in the woods for finding happiness, he takes us on a wild goose chase before coming back to the point he was earlier making. At one point in time, I had to go back to GoodReads to figure out whether I was reading the right book or whether there was a glitch in the Amazon system that got me the wrong book.

Leaning heavily on other behavioural finance references, notably Kahneman, the author explains how he melded works from different authors and derived his own understanding of the effect of money on happiness. As one of the other reviews of this book on goodreads says, any one who is remotely interested in behavioural psychology/finance would have read about Kahneman, Tversky or Thaler. Knowing that this book doesn’t bring any thing new to the table, it would indeed be redundant to read this, especially with the side quests that the author often participates in.

When the book takes almost half of the content to come to the point, I feel I would be doing the right thing in skimming the book instead of reading it thoroughly. And if you’re really interested in completing the book, that is what I would recommend. Otherwise, the psychology of building wealth can be better understood through other well known works.

Here’s my take on how happiness is linked with wealth. Yes, wealth can bring a certain level of happiness. But as is with any other thing in life, the marginal utility of wealth decreases as we have more and more of it. It should not be used as an end to itself, but as a means to achieving your true purpose in life, whatever you define that to be. Money may or may not directly give you happiness. But one thing I know for sure is that this book did not give me happiness at all. The proof of the geometry of wealth stays unsolved for me

The Laws of Human Nature – Book Review

I’ve enjoyed Robert Greene’s previous books immensely. The 48 Laws of Power was my introduction to the Machiavellian world of power and intrigue. Each page of the book was filled with useful ways to create an aura of power and become a more powerful social creature. His later book, Mastery focused more on an improvement of the self. In that book Greene explored the ways one can learn from the various Masters who have lived before us and have made a profound impact in various areas. And it was with this same interest and hope that I approached this book.

Just like his other books, this one is massive as well. Going for a never-ending 624 pages, it is by no means a quick read. And after reading through a few chapters, I realized that the book has fallen prey to the oft tried and tested trend in self-help literature. Anecdotes, anecdotes and more anecdotes. Mind you this is a safe method. That is why most self help literature heavily rely on this structure. But it is something that I greatly abhor. Yes successful stories do strengthen the conviction of a particular theory. But they also tend to suffer from confirmation and selection bias. It is almost as if Greene made a rough outline of the laws and then searched for examples that would fit these theories. Moreover it feels like that some of the anecdotes are greatly simplified or even modified to suit the narrative.

He might have done the same in his other books as well. But for some reason these anecdotes don’t work here. After a couple of chapters, I found myself skipping the anecdotes directly to the part where he explained a particular law.

Me, every five minutes

But by the time I reached the fifth law, I found it quite impossible to carry on. And hence I closed the book, abandoning it for good. I very much would have wanted to like this book and learn from it. But unfortunately the denseness of the material really put me off. The author has rambled on and on to fill up the book with feel-good stories and then propose a one-page full fount of self-help advice. I feel a better idea would be to go through the bibliography that the author has given at the end and instead peruse some of those works. That would be a more productive use of your time.

The Solution To Social Anxiety by Dr Aziz Gazipura – Book Review

I have always identified to some firm of shyness or SAD since I was a kid. I hate going to events, parties, gatherings – basically any place where there will be lots of humans. And Earth is full of them. That puts me shit out of luck. I dreaded meeting not only strangers but even people I knew. As long as the number of people were large, I shied away from it.
So it was a no-brainer for me to pick this book up. I have read books on shyness/SAD before but the thing about such books (and the self-help genre in general) is that many of them are filled with anecdotal fluff, or pointless exercises in a workbook style. And AFAIK I don’t recall finishing any book on this topic that was substantial in content.
However I’m glad that I gave this book a chance. What I immediately liked about the book was that unlike most self-help books it is not full of fluff. The author has not chosen to fill the book with random stories or pointless exercises. And for that I’m thankful. The book is a quick read and for its compact size (only 230 pages), packs in quite a punch.
The book is divided into two parts. The first part talks about the problem – the causes of social anxiety and how people with SAD tend to think and behave. The second part, obviously, is about the solution. The book quickly jumps into the major causes of why a person with social anxiety feels that he is not up to the mark of his peers. Many a times, the overhang of having an ugly experience in the past overshadows the present day situations. People with SAD have a very strong and ruthless self-critic that berates every endeavor by the individual in connecting with others. Hence shy people tend to reject their self worth even before (if ever) other people do so. As they say, you miss 100% of the shots you don’t take.
The second part of the book starts with explaining what people with social confidence do instead. It is not that people who are confident do not have thoughts of inability or in-adequateness rise in their minds. They do as well. However, they do not let such thoughts overwhelm their actions.
Effectively, it is a case of feeling the fear and doing it anyway. The author talks about a set of clear and effective steps to overcome this fear as and when it is happening. Being aware (or mindful) of one thoughts is one way that the author suggests this can be done. But first one needs to accept oneself even before making any such effort. The book also mentions that shy people have a fear of being vulnerable and that they prevent themselves from getting hurt by avoiding such situations. However, the author believes that such people need to put themselves in such situations and consciously think and behave differently than their automatic patterns of thought have done till now.
All in all the book does a very good job of mapping out the most common causes of social anxiety and the steps one can take gradually to decrease or reduce the feeling of shyness. Reading this book made me realize that there is no rocket science to this. Plain old common sense and getting out of your comfort zone. Although this book by itself may not be as powerful as some others (read the recommendations given at the end) I still feel that it is quite a useful book because of its compact message and its useful suggestions.
This book gets a 5 out of 5 for not succumbing to the temptation that most self help books fall into. Read it as a starting point for your journey towards becoming more socially confident.

The Behavioral Investor by Daniel Crosby – Book Review

Mention the word behavioural pscyhology and a few well-known names come to mind. Kahneman, Baumeister, and Thaler are just a few examples. So it was a bit surprising when I came across a book with a relatively unknown author. But given that investing is a passion, and books are my weakness, I had to read this book.
Although I have devoured path breaking books such as Thinking, Fast and Slow, Misbehaving, etc. I had found these books to be quite dense. I had to conjure up all my willpower (no pun intended – Willpower Baumeister) to keep from falling asleep. But I found this book by Daniel Crosby to be a much more accessible read, and because it directly dealt with how behavioural psychology links with the stock market, it was much more relevant as well.
The book is divided into four parts. The first part of the book talks about how non-rational cues affect the way an average retail investor chooses to invest in the stock market. Various affecting factors such as sociology, physiology are discussed. Many of these factors prevent an investor from buying into the right stocks, as well as buying them at the right time. According to the author, All exceptional investing is, at its core, behavioural investing.
As with all books on behavioural psychology, there is a justification to explain the way we are by comparing us with the way our ancestors on the savannah have dealt with dangers. And here comes a small but passionate rant. No matter how many books on anthropology, evolution or behavioural psychology I read, I cannot bring to myself the fact that justifying all our present day behaviour by saying that this is what our ancestors on the jungle plains used to do, is correct. I am no expert in the subject and I may be very well completely wrong. But my brain refuses to believe that this is so. Maybe one of my ancestors was equally cynical about why he felt the hair on the back of his neck rise up whenever there was a predator lurking around. End rant. And so I have to be patient while reading lines such as…
Our brains have remained relatively stagnant over the last 150,000 years, but the complexity of the world in which they operate has exponentiated (sic). It would be a gross understatement to say that our mental hardware has not caught up to the times. We are simultaneously the most evolved species on the planet and wholly unprepared for the demands of modern life.
But the way that the author explains the various fallacies that the human brain is capable of is quite enlightening, and quite true from my own short experience in the stock market. As a side note, the author quotes many famous experiments that were the pioneered the way for behavioural ecnomics/pschyhology as a discipline. But in case you’ve read the books by any of the authors I mentioned earlier, you would be familiar with these experiments. The Milgram, Stroop test, Stanford prison experiments, are just a few well known and oft-repeated studies in these areas.
In the second part, the author groups all the various biases and fallacies that one normally encounters into four groups. According to him, each of these biases can be classified into one of these categories – Ego, Conservatism, Attention, and Emotion. Quite a convenient classification.
In the next part of the book, the author lays down how one can fight each of these biases in order to make better decisions, especially as far as investment in the stock market is concerned. This is something quite good and useful because as the author mentions at the beginning of this part, that is largely what behavioral finance has given the investing public: a long list of biases with very few solutions. And by including the possible solutions to these biases, the author goes one step further in helping out the average Joe in how he can overcome these behavioural fallacies.
Many of the well-known best practices about investing have been presented from a behavioural perspective. For example, one of the ways in which the ill-effects of ego can be overcome is to diversify. Diversification has become such a broadly accepted good in asset management that it seems many have forgotten the underlying reasons for doing it. Considered from a behavioral lens, diversification is humility made flesh, the embodiment of managing ego risk. Diversification is a concrete nod to the luck and uncertainty inherent in money management and an admission that the future is unknowable.
In my own personal experience, emotion can play a very detrimental role in proper investing. Anger, fear and greed are just some examples under the influence of which thousands of people have lost their savings in the stock market. Hence it becomes imperative to redirect this powerful force in the correct manner. This approach of working with a powerful force and not against a powerful force is instructive to investors seeking to manage emotion en route to making wise investment decisions. It can be tempting to want to stop emotion in its tracks, but, oftentimes, the more adaptive approach is to repurpose it for more favorable outcomes.
The fourth part of the book talks about building a Behavioural Portfolio (whatever that means) as an alternate way to investing. For some reason, the author chooses to discuss the pros and cons of value investing and momentum investing in this part as well. In the end what is prescribed is a combination of both. This was quite surprising and unexpected that the author would simply prescribe such a incompatible investment strategy.
Is this book useful to the beginner investor? Definitely. This may not teach you about which stocks to select or how to read price charts but it will definitely help you understand how to keep your mind clear whenever you’re starting to use whichever investing methodology you follow. And it will help you keep a clear and stable mind as you ride the ups and downs of the stock market, watching the value of your portfolio fluctuate in ever-greater volatile times.
One thing I particularly liked about the book is the way all the references are listed at the end of each chapter. This provides a useful list of further reading. And the best ideas of the chapter presented at the end provide a ready made summary for when you want to revisit the ideas given in the book.
Yes. many of the ideas given in the book are already discussed by the famous scientists/authors mentioned in the opening paragraph. But the book does a decent job to link them to a specific activity – stock market investing and provide a basic framework to keep in mind. The book is maybe a little too fluffed up and the editor could have done with a much short fourth part. But all in all, you can simply skip or skim these parts while keeping the gist of the book well intact.
In closing, I would like to share the importance of keeping a behavioural perspective in the stock market, no matter how intelligent (you think) you are. After all, the stock market is something that even the best of us can get up in.
Isaac Newton, a scientist without equal, lost his fortune in the South Sea Bubble through a fundamental misunderstanding of the nature of markets and human behavior. Smarts, it would seem, are no guarantee of being a rational actor.
Even once we are aware of our biases, we must recognize that knowledge does not equal behavior. -Nassim Taleb