Archive for the ‘Books’ Category

Arthur Conan Doyle’s final set of stories about Sherlock Holmes is compiled into Case-Book. It has some interesting tales, but at times I could not help but feel that the ideas were running a bit thin. One wasn’t even really a mystery, it was just someone reciting a story. Others were narrated by Holmes himself. It was true to his character, which while being accurate, was a less engaging style of storytelling. I did not get bored though, so these points aside, it was an enjoyable read.

Pretty disappointed by this book. It was a truly heart warming tale about how a rich white family brought a poor black kid into their home and turned his life around. But what I really wanted was an insight into an industry. That is what Flash Boys and The Big Short delivered.

That is not to criticise Michael Lewis as a writer. He is, as ever, poetic in his storytelling. It is a strange and wonderful story. However, it did not create the “I cannot put this down” feeling as much as the books of his that I have previously read.

The Big Short is a book by Michael Lewis that tells the story of the 2008 financial crises and some of the people who saw it coming. Lewis is a great writer. He takes a subject which is fundamentally rather dull and boring, and tells stories in such an accessible and engaging way that it is difficult to put it down.

It preaches a similar story to that of his later book, Flash Boys. That is that almost nobody in the banking industry really knows what is going on. They churn out new products and new systems so fast that none of them really understand it. Their, and our doom. But at least it makes good reading.

His Last Bow is another of the collection of short stories written by Arthur Conan Doyle around Sherlock Holmes. They continued Doyle’s improved storytelling style and offered some further interesting insight into the characters, particularly Mycroft.

Some of it made me think I had read before, particularly when Holmes describes how he reads Watson’s thoughts. I’m not sure if it actually was the same as an earlier story or not. It also jumps around quite a bit in terms of when the stories were set and so a bit more of an explanation at the start would have been nice.

When someone says the phrase “high frequency trading” (HFT), most of us have no idea what it means. Even those of us with some idea, probably think it is trading by computers, but essentially doing what traders do – wheeling and dealing in an attempt to make some money.

Michael Lewis’s book “Flash Boys” tells a different story. High frequency trading is all about front-running. You want to buy 10,000 shares in Apple? Great, I’m going to buy them before you can and then sell them to you at a higher price. It’s illegal, or it was, but with the deregulation of central stock markets in favour of competition between markets, you can now exploit milliseconds it takes for them to talk to each other.

This caused huge investment into the history with HTF firms making enormous profits. The banks didn’t say anything because they were making money from selling the HFT companies the data they needed. The stock markets didn’t say anything because they were making money from the huge increase in trading activity. Everyone was getting rich from scalping the ordinary investor.

I say was, but the problem has not gone away. However, the book also discusses how former trader Brad Katsuyama has gone on to set up IEX, a private stock exchange that tries to eliminate all the unfairness in the market.

It is a fascinating by scary read. To see how totally wrong the entire banking industry is. We all kind of know it, but it really brings it home.

Jason Vale’s book “Kick the Drink… Easily!” suggests that it is easy for someone to stop drinking because there is no such thing as an alcoholic. Alcohol completely leaves your system within 10 days so the idea that it is a lifelong problem is “brainwashing”. Once you remove it, you can just stop drinking.

It was an interesting read, though I do not agree with all of it.

He makes a lot of astute points. Alcohol gets a special treatment among recreational drugs. When you say you don’t drink, people ask you why. Nobody has ever asked me why I don’t take crack. Alcohol is a drug and it messes up the human body.

It also tastes like piss. We all know it. We all had that first drink, it was horrible. But we kept at it because it was the socially acceptable thing to do and gradually built up a tolerance to the horrible taste. But at the end of the day it is still a poison that our body does not like.

It goes on. Does it make you more sociable? Probably not when you think about it. People slur their words, withdraw themselves from conversation and become violent. 75% of stabbings involve intoxication. It’s expensive. It’s had for our health. It makes us feel horrible the next day. Why then do we do it?

I don’t agree with all his points. For example, it could offer a pleasurable effect. Being “numb to the world” as it he puts it, could be thought of as pleasurable if you are not happy with your live.

It also does grease the wheels of social interaction. While I do not think being intoxicated actually does make it any easier for me to talk to new people at parties, or make me a more interesting or lively person, it does help many of us get together with long-term partners.

As for his tenet that there is no such thing as alcoholism, that is less clear. Mainly because nobody can really agree on what alcoholism is.

Overall, I think it makes a good case against alcohol. It is more a large collection of anecdotes than a well cited review of the evidence. However, we all know that this evidence is out there. The book is designed to convince people to stop drinking, and people often respond better to anecdotes than hard evidence.

Although, that does appear to be a quote from the Daily Mail on there.

The last full Sherlock Holmes novel that Arthur Conan Doyle wrote is The Valley of Fear. It is a great example of how Doyle’s writing progressed as his career went on. It has a similar structure to that of his first novel A Study in Scarlet but is delivered in a far more coherent and logical way as to make the pleasure of reading it greatly increased.

It does, however, like quite a number of the stories in the Sherlock Holmes canon, lack an entirely-satisfying ending. However, there have been worse conclusions of stories in the series.

I recently read Run Less, Run Faster after it was recommended by a friend. It sets out a training programme that emphasises getting rid of “junk milage” and making the runs you do do more effective.

In general it seems to have a lot of good stuff in it, and if I wanted to take my running more seriously, it seems like a great programme to follow. As it is, I will take some ideas from it without taking the whole package.

It seems mostly written for people who run marathons. There is plenty of adjustments for 5km and 10km races and all the tables discuss these values, as well as values for quite slow runners (a lot slower than me even) but even so I feel like it is really for people who dedicate their entire lives to running. I guess that should be obviously from a scheme that advocates five workouts a week. It certainly is not a book targeted as casual runners, or anyone who’s primary purpose is fitness rather than competitive running.

It is filled with jargon. Maybe if you are a serious runner you will understand it all, but a lot of it is lost on me and I have had to look quite a few terms up.

Some of it seems cautious. It talks about speaking to a doctor before beginning a training programme. Perhaps this is good advice if you have health issues, but I am pretty sure that the overwhelming majority of doctors will tell overwhelming majority of people “yes, of course you should exercise!” And as Chris H has pointed out previously, if you are a healthy 20-something year old, you don’t really need to train for a 10km. If you already do regular exercise, you will just be able to do it. Even by accident. Again though, that goes back to whether you just want to run it, or whether you want to run it competitively.

I like the way they mix up the format of the book. Some of it is standard flowing text, other parts are delivered as a question and answer. They also intersperse of all this with letters from people telling them how amazing they are. This I find odd and uncomfortable. I am always suspicious about texts that spend so much time openly stating how good they are rather than offering real content.

Overall, I think if you want to run competitively, this is a great book to read. Otherwise, it probably is not that useful.

Terry Pratchett’s 26th Discworld novel is Thief of Time. It has a mixed cast of characters including The Auditors, Death, Susan Sto Helit and best of all, Lu-Tze.

It definitely is not one of my favourite Discworld novels. While I do like the History Monks, I am not a big fan of the Auditors. I found it dragged a bit which lead to be losing focus and struggling to follow some of it.

Two of the books I have read recently, Everything Is Obvious and The Signal and the Noise, made references to Burton Malkiel’s book “A Random Walk Down Wall Street”. They pointed out that the stock market is entirely unpredictable and therefore investment bankers are just guessing. I was curious to read more, so I picked up the book itself.

An index tracks stock market movements. For example the FTSE 100 tracks 100 companies on the London Stock Exchange, while the Standard & Poors (S&P) 500 or Russell 3000 track a far more broad range of stock prices. These therefore provide a good indication of whether the stock market moves up or down.

Now take a mutual fund – these are professionally managed funds that the general public put their money in for someone to manage on their behalf. The benchmark here is not whether they can grow their investment, but whether they can grow their investment at a better rate than the index (because the stock market generally moves up anyway). If they were just guessing, you would expect 50% of mutual funds to beat the index, and the other 50% to fail, in both cases just due to chance.

However, the research, as discussed at length in A Random Walk Down Wall Street, shows that only 40% of mutual funds can beat the index! This is not just guessing – this is worse than guessing. Professional investment managers not only do not add any value to the funds they are managing, they actually subtract value.

You could make the case that there are just a lot of bad fund managers. However, the research refutes this too. As Malkiel describes, if you take the top performing funds over a five year period they almost invariably fail to beat the index over the next five year period.

This should not actually be that surprising. The Wall Street Journal has long shown that throwing darts at the stock listings produces a better return than the experts; a noticeably better return once you adjust for risk. To see it in practice (I include this as an anecdote to make the facts more believable) just watch the BBC documentary Million Dollar Traders in which eight complete notices only lose 2.5% in a period where their multi-millionaire master-of-trading coach loses 5%.

Of course it is hard to believe. Why are all these people employed if they add no value? That is a fact I find hard to reconcile. Surely if we are talking about efficient markets, at least one bank would have realised they could fire all these traders and replace them with monkeys? Counter arguments to this suggest that the average trader actually earns a pittance, and that because it is in the interest of traders (justifying their own job) and brokers (getting rich of the transaction fees from all this needless trainers) to maintain the illusion that they actually do something, the industry keeps selling these products to the general public who simply don’t realise.

The evidence, at least if Malkiel is to be believed, is clear. You should invest all your money in an index tracker with the lowest fee you can find. That produces the most consistent returns compared with a mutual fund that charges you higher fees to produce a lower return. Nate Silver says the same thing.

In the final part of the book, Malkiel goes on offer some investment advice for those who do not want to use an index fund. He also hints that he picks individual stocks too. This is odd as it goes against a lot of what the evidence he has presented says, but is consistent with what the psychology says – that we have a really hard time accepting what the scientific evidence says when it contradicts our own pet theories, achievements and so called “common sense”.