🧗 3 Investing-ish Books I Love
OIJ (#8) A review of Dear Chairman by Jeff Gram, Alchemy by Rory Sutherland, and Accounting for Growth by Terry Smith. Three low-key masterpieces
My dear fellow Hermits 👋
Welcome back to 🧙♂️ The Hermit 🧙♂️
ICYMI:
📈 Investment Thesis: Cardlytics CDLX 0.00%↑
🧗 Our Investing Journey: 10,000 hours of Scuttlebutt
📝 Company Updates: Cardlytics Dilution
If you haven’t yet, subscribe to get access to this post, and every new post
Before we start
I wanted to let you know I spent last week visiting companies in Eastern Europe. To no surprise, my overall take is that it seems like an extremely fertile ground for idea discovery and scale-up investing. However, none of the companies I visited are investible just yet. They need more… maturing.
Note that I’m talking exclusively about listed microcaps.
On the bright side, I encountered some of the brightest, most energetic, and - probably - most sketchy managers I’ve ever met. Expect a post soon about these Shakespearean characters and the (mostly) pleasant situations I faced during my stay.
Source: Pinterest
Not the Industry Standard
As summer vacations are quickly approaching for a majority of my readers, I wanted to provide a quick selection of great books that I think you’ll thoroughly enjoy. This is not the typical list where you’ll see famous books listed. Instead of opting for titles like The Intelligent Investor, Poor Charlie’s Almanack, or The Outsiders, I’ll do this the Hermit way.
Here are three not-so-popular books that have life-altering messages. Once read and internalized, these messages will resonate with most areas of your life and may serve as initiators for improving processes. Plus, they’re also incredibly entertaining, particularly the first two.
These are in no way self-help (not that there’s anything wrong with that category), but rather a way of peaking through a small window into other people’s way of acting and thinking.
Btw, there’s some bonus downloadable content at the end.
😊 Enjoy! 😊
(#1) Dear Chairman
by Jeff Gram
This magnificent book explores the power dynamics between shareholders and corporate boards through historical case studies. Gramm provides a chronological journey, detailing how shareholder activism has shaped corporate America from the 1920s to modern times.
Through a series of impactful letters, the book reveals how shareholders have historically influenced management decisions: At times challenging the status quo for better accountability and transparency, but in some cases asking for outright bribes in Gordon Gekko-worthy exchanges.
Source: Investopedia
The book showcases battles between notable investors and corporate boards, illustrating pivotal moments in corporate governance. It highlights figures like Warren Buffett, Benjamin Graham, Carl Icahn, and Ross Perot, demonstrating how their strategies influenced boardroom decisions and reshaped corporate policies.
Personally, I find the book worthwhile for both financial experts and general readers given how the narrative style balances detailed research and engaging storytelling.
(#2) Alchemy
by Rory Sutherland
This book is both hilarious and full of profound ideas. The author argues that unconventional, irrational, and creative thinking often leads to the best solutions. He challenges the reliance on data and logic, advocating for a balance between rationality and creative intuition.
The book is essentially a full PhD on behavioral economics written with humor and wit. His conversational style, combined with practical examples, makes complex psychological concepts accessible and engaging for a wide audience.
Source: Streetfins
Sutherland’s insights empower readers to embrace creativity and irrationality in problem-solving, making it valuable for marketers, business leaders, and innovators seeking fresh perspectives. It’s a reminder that human behavior is complex and often defies simple, data-driven analysis.
This is one of those books that will leave you seeking fresh perspectives on almost everything you thought was true.
(#3) Accounting for Growth
by Terry Smith
Terry Smith’s book is a critique of commonly used opaque accounting practices. Even though it may be a bit outdated, it talks about how companies sometimes manipulated (and still manipulate) financial statements to appear more prosperous.
The book serves as a guide for investors to see beyond these tactics and understand a company’s true financial health. Accounting for Growth provides a critical analysis of common tricks, such as earnings manipulation, aggressive revenue recognition, costing, capitalizing expenses, and using off-balance-sheet financing aimed at misleading investors.
Source: Mehanna CPA & Advisors
Out of the three, this is by far the most technical book, and therefore a suggested reading for specialists including full- and part-time dedicated investors, financial analysts, and business professionals. It should equip you with the tools to critically evaluate financial statements and identify red flags, ultimately promoting more informed investment decisions.
I would argue this is an essential read for anyone involved in finance even though the text can seem a bit… rusty.
Bonus Investment Letters
As a closing note, I’m also a big fan of the Buffet Partnership Letters and the Nomad Letters. I won’t add any commentary on these, other than to say they are excellent and full of rich lessons. With every new letter, you will get their thoughts, how they traverse economic downturns, and how they designed their path to improve their investment processes continuously.
Please let me know if you can’t access these, or if you want more information on the content
🙏 Feel free to ❤️ and comment so that more people can discover and enjoy this Substack 😇
Thanks. Any advice on where someone can buy or find a link to read ‘Accounting For Growth’?