Prime Reading Notes

Latticework is unlike most other investment books I have ever read. It presents strong arguments to underscore the importance of a multidisciplinary approach to investing.

Drawing from multidisciplinary focus, Hagstrom takes us through some key principles from a number of disciplines such as psychology, physics, biology, social sciences, literature and philosophy. He then applies these theories to investing and the stock market.

Hagstrom makes a case that a successful stock picker must be ready to shift models and look at the markets from different vantage points with the passage of time. Instead of working like an analyst – plugging factual information into excel models – investors need to regard the insights or models from other disciplines too.

The task of the investor, Hagstrom argues in Latticework, is to be well-read and always be open to a new perspective of the world.

Success, they say, leaves clues. So does failure. Unfortunately, the world focuses too much on learning only from successes. Success alone leaves the learning equation incomplete.

Identifying patterns is the key to drawing useful lessons from the past. Success patterns are just one part. The patterns left by failure are the remaining part of the puzzle. To succeed, one has to study both. Learning ‘what to do’ from success patterns and learning ‘what to avoid’ from failure patterns.

A person trying to get ahead in the world, with no will to study the failures, is akin to the proverbial one-legged man who is trying to score points in an ass-kicking contest.

They say you should never judge a book by its cover. It’s a good rule of thumb about what not to do.

So how do you judge if a book is worth reading or not? I agree, it’s a difficult question to answer but if you find a book, which starts with a foreword from Warren Buffett, there is no question about whether to read it or not. Don Keough’s The 10 Commandments of Business Failure is one such book. This is what Buffett says about the author –

It has been an article of faith for me that I should always try to hang out with people who are better than I. When I am with Don Keough, I can feel myself on the up escalator…He’s an incredible business leader…Don talks such sense and offers such inspiration…he is one of the very few guys I feel I can hand the keys over to.