100 books like Red-Blooded Risk

This book comprises an edited compendium of investment reports from Marathon Investment Management, with three broad themes.

First, stock markets are about capitalism, not macroeconomics.

Second, successful investment requires an understanding of the relative size and composition of supply, demand, production, and consumption. You need to compare heterogeneity, fragmentation, and growth (positive or negative) on both sides of a company’s market.

Third, pay attention to the capital cycle. Seek out sectors from which investors’ capital and attention are being withdrawn, and be wary of sectors which are attracting increasing capital and attention.

A star business has market leadership of a niche, where the niche is itself growing fast. This is arguably close to a tautology, but it is also quite a rare thing to find.

This book is about how to spot these star businesses at an early stage, and the enormous returns which can flow from doing so. Much of my wealth has come from doing this a few times (probably largely by luck).

It also makes interesting suggestions about how to create and manage a star business, albeit this is not something that I’ve ever tried myself.

This is the best book I know on the nitty-gritty detail of investment research. Some of the techniques and resources mentioned may not be accessible to the typical private investor, but I would pick out three general points.

First, the importance of managing your own time (see the whole of chapter 3). Second, the need to pick out, for each company the handful of variables that have the biggest influence on the stock price, and concentrate on researching those. Third, the need for any investment view to be backed by non-consensus data or insights – because without these, you only have only a hunch, and a hunch is not worth very much.

This could be better written (too many page-length paragraphs), but it earns its place on this list because the topic is important and I don’t know of any better treatment.

Many investment pundits advocate rigid self-control: they say you should try to suppress all emotion in investment decision-making – which is probably infeasible, and in any case undesirable. This book suggests a higher aspiration: aim to have the right emotions, those which are accurately calibrated to the contours of truth.

As someone who hoarded toilet paper weeks before the 2020 shortage, I relate to the frustration of watching history repeat itself (or at least rhyme with itself) because people are often too distracted to focus on planning for looming crises.

Bina Venkataraman gets to the “why” of this often-fatal flaw as she explores the nature of human decision-making. This book provides tangible narratives as a springboard to answer these questions: How can we use wisdom from our ancestors to better inform our personal, professional, and policy decisions? How can we incentivize (or glitter bomb) long-term planning? And how can we see ourselves as future ancestors in order to be better stewards of the planet?

A perfect selection for corporate, government, and non-profit retreats and professional development conferences!  

This was a real eye-opener for me when it appeared, because instead of the usual strictly modern-day stories about risk, Bernstein’s story begins with ancient Greek traditions when “risk” was luck and restricted to gambling, and the rest of life was a matter of fate.

He weaves together the invention of Arabic numbering and the Hindu zero, the emergence of scientific experimental methods, and the invention of probability theory, in explaining the evolution of the notion of risk. 

As the story moves into the modern era, Bernstein tracks the major practical applications of risk in addition to its conceptual development. And this is no dry historical recitation. Bernstein brings to life the major players, their hopes, dreams, capabilities, and flaws. This book is an absolute page-turner. 

This book is totally hilarious! It’s really pacy, utterly wacky, and laugh-out-loud silly. The pages are packed with lots of funny illustrations so none of the text seems overwhelming or goes on too long. It’s a handbook on how to avoid danger, written by Dr. Noel Zone, the greatest (and only) "dangerologist" in the world, and covers sneaky snakes posing as toothbrushes, sharks hiding in toilets, to robots disguised as kindly grandmas. My son, a reluctant reader first listened to the audiobook- which is narrated fantastically (we were in fits of giggles listening to it in the car), and then he happily and quickly read the second two books in the series. I think audiobooks are a fantastic way to get kids hooked on new characters and discover new authors.

Engaging with this book, I recognized how fear of imperfection often held me back, not just in my art but in various aspects of life. I feel like the importance of showing up and being seen, even when there are no guarantees, is a reminder that I can continue to revisit time and time again.

This book has empowered me to approach my art practice with a heart open to risks and imperfections, which transforms not just the art I produce, but also how I lead, love, and connect with the world around me.

Another classic, which influenced my book. Ron is the founder of RiskThinking AI, which focuses on the financial effects of climate change.

His fascinating stories include one of the first fatalities from self-driving cars, when it struck a woman with a bicycle running to cross the road. Any human driver would have seen an uncertain image and slowed down, playing out a group of possible scenarios. But AI hasn’t learned that kind of humility.

Eventually, when it does, the machines and people will learn how to manage risk together, and that will lead to more courage. The best part of this book is his insight into how the use of new technology changes human behavior.  

US economist Frank Knight is credited with distinguishing uncertainty from risk back in 1921. Yet the two are often conflated.

Kay (an eminent economist) and King (a former Governor of the Bank of England) argue powerfully that the distinction does matter. They range widely across macroeconomics, politics, and consumer choices to show why reducing the future to a set of numbers (probabilities) creates a false – and often disastrous – illusion of power over future outcomes.

They argue that instead we should aim to make decisions that stand a reasonable chance of being robust against unknowable, as well as forecastable, paths that the future might take. That’s very much the ethos of my own books: building in resilience is a key part of successful personal financial planning.