andreweverett360 Book Review, Management

The Flaw of Averages

The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty

by Sam L. Savage

This is a book about how to manage in a world of uncertainty. The beginning section presents a number of statistical concepts in simplified language; more sophisticated techniques follow. The author discusses how these concepts apply in a wide variety of contexts including oil exploration, pharmaceutical R&D, the stock market, the housing bubble, weather, climate change, health care, gene pools, the war of terror, and supply chains. He also describes some illogical accounting rules required by the FASB and the SEC. Continue reading “The Flaw of Averages” →

andreweverett360 Book Review, Management

Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency

Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency

by Tom DeMarco

Slack is an outstanding management book full of wisdom about corporate culture, change, failure, learning, quality, risk management, productivity, and managing people.

“You can’t grow if you can’t change at all.” Slack is “the lubricant of change… Slack represents operational capacity sacrificed in the interests of long-term health… Learning to think of it that way (instead of as waste) is what distinguishes organizations that are ‘in business’ from those that are merely busy.”

Continue reading “Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency” →

andreweverett360 Book Review, Finance

Rethinking Risk Management: Critically Examining Old Ideas and New Concepts

Rethinking Risk Management: Critically Examining Old Ideas and New Concepts

by Rick Nason

Rick Nason challenges the status quo of risk management which mindlessly follows third-party frameworks and does too little independent thinking. He argues that risk management acts as “The Department of No” while ignoring upside risk. He envisions risk management as a strategic player in value creation rather than a cost center.

“Defining risk management as increasing the probability and magnitude of good risk while decreasing the probability and severity of bad risk implies balance, and risk management is nothing if not an exercise in balance. It is a balance between art and science, process and judgment.” Continue reading “Rethinking Risk Management: Critically Examining Old Ideas and New Concepts” →

andreweverett360 Book Review, Finance

The Most Important Thing: Uncommon Sense for the Thoughtful Investor

The Most Important Thing: Uncommon Sense for the Thoughtful Investor

by Howard Marks

Howard Marks is the co-founder and co-chairman of Oaktree Capital Management and he ranks #374 on the 2017 Forbes 400 list of wealthiest Americans. In this book he covers 20 topics: second-level thinking; market efficiency and its limitations; intrinsic value; the relationship between price and value; understanding risk; recognizing risk; controlling risk; market cycles; the pendulum; combating negative influences; contrarianism; finding bargains; patient opportunism; knowing what you don’t know; having a sense for where we stand; appreciating the role of luck; investing defensively; avoiding pitfalls; adding value; and pulling it all together.

Can you guess which one is the most important thing?  Continue reading “The Most Important Thing: Uncommon Sense for the Thoughtful Investor” →