Here are three terrific books I’ve been reading, which I’m alerting you to so you can enjoy and participate in my upcoming discussions of them (the actual discussions won’t be for a few days at least). If you’ve read any of these already don’t wait until then, please comment here.
The Rational Optimist: How Prosperity Evolves
Government getting bigger and worse is tolerated as long as wealth increases even faster than taxes so people are still better off. Although recently this condition became false, resulting in the current political upheavals, in the long run things really are getting better, technological and economic advances have become self-sustaining on a worldwide scale despite setbacks in individual countries. This book explains why.
This Time Is Different: Eight Centuries of Financial Folly
The most complete analysis ever of financial crises, panics, and insanity.
Nassim Nicholas Taleb is one of my heroes, and everyone should explore his website. I’ll have a lot more to say about him. His criticisms of the fatally flawed “Value at Risk” financial models in the mid-90’s, and his predictions of the ensuing disasters, were a factor in my quitting Wall Street, but he was ignored for reasons that, it was obvious to me at the time, were self-serving and bogus. His writings are amazingly original.
One of his suggestions I like is for structuring your charitable giving: set aside a fund at the beginning of the year for charities and misfortunes. Any bad luck or unfortunate occurrence that costs you money (you are robbed, you get an expensive traffic ticket, your kid breaks someone’s expensive appliance, etc.) comes out of the fund, and at the end of the year you give the rest to your favorite charity. That way none of the misfortunes ever bother you because you aren’t materially any worse off, and it’s not really unfair to anybody to give less to charity when you can afford less. (If it is a religious charity, you could also look at it as giving thanks for your good luck by giving more at the end of good years.)
Here is a recent article about his influence:
Hedge Funds Pile Into Doomsday Trade
And here is a short interview:
10 Questions for Nassim Taleb