Monthly Archives: July 2014

Book Review: Fooling Houdini

The first book that I’ve read and will write about in this blog is Fooling Houdini: Magicians, Mentalists, Math Geeks, and the Hidden Powers of the Mind. It was one of Amazon’s Ten Best Books of 2012. It is a non-fiction and non-investing book but was recommended by two investing blogs that I follow. I was particularly drawn to read the book because I was looking for a book that was not about investing per se, but could be applied anyway. Whopper Investments alluded to this and I took a step of faith to read it.

The first thing that resonated with me was that to be really good at something, you have to go all out to achieve it. The author was enrolled in a PhD program which he basically quit as he spent more and more time pursuing his passion in magic. There were a few pages where he wrote about how tax auditors would be shocked at how much he spends on his pursuit of magic relative to everything else. A girlfriend left him because he was too magic-crazed. He went to great lengths to pursue out great magicians in their respective fields and learn from them. One example is when he attended a function that he was technically not allowed to attend because the magic community wanted to eject him out, and he had to sneak in and out. His journey did not end with magicians, but also brought him to mathematicians and physics labs. He writes about how he went to every single office hours of an acclaimed mathematicians, and he wasn’t even that Professor’s student! The author’s ability and persistence to find teachers and mentors and to get them to teach him was astounding. He used the magic community in NYC to learn from and then perform to. As he performed to them, their critiques gradually made him improve.

The second thing that resonated with me was how setbacks can be a strong motivation to succeed.The author felt humiliated when he wasn’t allowed to complete his magic trick at the Magic Olympics because his performance was too abysmal. He didn’t know where to hide his face for a few months but after a while, he was reinvigorated to pursue his passion. That was when he realized that he had failed because he had pursued magic as an amateur hobby and not as a serious passion.

In his second performance at the Magic Olympics, he had a true magic trick that no one else could perform and that fit his personality. He could call it his own and it personified him. Other magicians were astounded by his trick. However, he didn’t win and even  lost to high school students. However, he was very satisfied because one of the judges at his first performance (where he was humiliated) watched his performance and gave his approval.

That’s part of the reason why I’m writing this blog in the first place – to discipline my thought and investment process. As I look back on my investment theses and trades in the future, I hope that I will improve. I do not need to become the greatest investor like Warren Buffett, but it would be awesome to show that I have some skill in this arena.

Credit to Whopper Investments and Barel Karsan who also wrote about this book at their blogs, which inspired me to read it.

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Why I Try to Read More Books

Since I started reading investing links in about 2009, I realized that I started reading less books and more internet articles, whether short posts or long form articles. While that has’what  allowed me to learn a lot about a disparate number of subjects, I frequently felt that I never knew a particular topic in depth. There is a certain depth of learning that a book can convey while these internet articles can’t. Also, I found that it was easier for me to recall the thesis of a book rather than recall what I learnt from any of these articles. For example, I would always associate Fooled by Randomness  with the importance of thinking probabilistically and also not to overemphasis one’s own ability rather than chance.

Thus, I’m making a conscious attempt to restart reading books. One person who has served as a key inspiration is Shane Parrish at the Farnam Street Blog. As documented on his What I’m Reading page, he easily reads 10-15 books a month. That is insane. He also reminded me about Warren Buffett’s advice on how to become smarter.

I’ll write a short review on this blog of each book I read which will emphasize the the takeaways that I feel can be applied to investing.