Brainstorms: The silent professional

What type of person are you?

All warfare is based on deception. If you know the enemy and know yourself, you need not fear the result of a hundred battles. 

The Art of War

The quote above is pinned to the top of my strategy dashboard. Why? Because at the end of the day, there is a significant portion of markets that are zero-sum. In today’s world of corporate HR trying to make everyone feel included and valued, people forget that creative destruction is part of any system.

Three things have helped me think about these ideas:

• Titan by Ron Chernow

• Books on the German General Staff (see this article on it: Link)

• The Art of War and the Book of the Five Rings

Each of these books has refined my thinking in its own way.

• Titan is one of the few books I have read more time than I can count. One of the ideas Peter Thiel touches on in his book is that to create large portions of wealth, you need to create a monopoly. John D. Rockefeller was functionally the first monopoly in the United States. In Rockefeller’s day, the monopoly was on oil. Today it is companies like Google, Amazon, Apple, and other Mag7 names. Mag 7 is a nice play from a flow perspective but you always need to think about what the NEXT monopoly will be. In order to think in this frame of reference, you need to read about a lot of things that aren’t incredibly exciting right now.

• Books from the German General staff like On War by Carl Von Clausewitz institutionalized and systematized strategy. The quantitative metrics we use for portfolio management find their fundamental principles in books like this. While we have built a lot of quantitative expressions of fundamental principles, few people understood the fundamentals of uncertainty like the German General staff. (Disclaimer: German General actually began to fall apart when the Nazis took control. All of the books I referenced in the article are PRE-Hitler. It was Hitler that really destroyed the German General Staff. I just have to throw the disclaimer out there because some people aren’t as familiar with this part of history and conflate the two).

• The Art of War and the Book of the Five Rings focus on the timing and mindset side of strategy and execution from a less systematic perspective and more of an intuitive and naturalistic perspective. I think reading On War and The Art of War is like learning from two different masters of their craft who have different personalities.

It was kind of funny, last night I was asked by a friend what trader I look up to most and what finance book is my favorite. The problem I always come up against is that I try not to read “finance books” unless I can help it. There are many traders or figures I respect but I don’t really have someone I look up to and think, “Man I just want to be like that person.”

I have read more “finance books” than I care to admit but these days I spend a lot of time on source research, data, and building strategies. I read a lot of reports and academic papers but the majority of books published today don’t interest me very much. Generally, I would rather read 5 exceptional books over than 100 new books a year. I end up reading new books but I think this whole trend of corporate guys reading 50 new books a year to “stay sharp” is kind of misguided.

At the end of the day, it is incredibly difficult to provide prescriptions for success because its very nature is elusive. The “5 Rules of Success” might of carried validity for one circumstance but not for yours. Generating alpha in the 1980s was significantly different from today.

The fact that there are no rules is what makes success at anything an actual accomplishment:

At the end of the day, greatness is rarely accomplished in the spotlight. Greatness might be acknowledged in retrospect with a spotlight but the work for it is always done in isolation.