Disclaimer: there are some affiliate links here. In the unlikely event that you click a link and buy something, Jeff Bezos may throw me a few crumbs.
Approximately two years ago, I stopped buying individual stocks, and moved entirely to index funds. The immediate benefit from this transition is that I had a lot more free time. I stopped wasting hours a day listening to CNBC, researching stocks on Seeking Alpha, and clicking countless crappy Market Watch articles. OK, I still read crappy Market Watch articles.
So, of course, my obsessive mind moved on to the next hill to conquer: nonfiction media. Over the past couple years, I’ve read a lot of books spanning topics such as business, science, philosophy, and history. I’ve been especially interested in behavioral psychology, decision theory, and productivity.
Some books I forget as soon as I finish. Some yield a few small nuggets of knowledge. And some stay with me for months, effectively changing the way I see the world.
Here are the five most impactful books I read in 2020.
Optionality: How to Survive and Thrive in a Volatile World – Richard Meadows
Prior to 2020, I had not heard of Rich Meadows or his blog, The Deep Dish. Discovering his blog, and subsequently reading his book Optionality, was easily one of the more rewarding endeavors of my year.
Optionality spans the gamut from Financial Independence to probabilistic thinking, from professional development to personal flourishing. It is both philosophical and deeply practical.
Meadows defines optionality as “the right, but not the obligation, to take action.” Incorporating optionality into your life means to cap downside risk, while simultaneously creating upside opportunities. It’s like buying an insurance policy sprinkled with lottery tickets.
Meadows builds Optionality on the theories of one of his (and my) greatest influences, Nassim Taleb. Taleb’s core ideas surround risk mitigation and exploiting positive asymmetries. Essentially, you can win by not losing, and by taking many low-risk bets with potentially high payoffs.
Meadows deftly applies the concepts of optionality and positive asymmetries to the areas of health, wealth, knowledge and social interactions.
Optionality is the book that I will keep recommending to people until they tell me to shut up. It’s easy to understand, chock-full of New Zealander charm, and quite entertaining in its own right.
Check out this review by David at CityFrugal if you need more convincing.
Skin in the Game: Hidden Asymmetries in Daily Life – Nassim Taleb
Taleb was a risk analyst on Wall Street for 20 years. His primary focus is on the intersection of statistics and human behavior. 2001’s Fooled by Randomness demonstrated people’s inability to accurately assess risk. The Black Swan showed how this faulty thinking leaves us vulnerable to so-called “Black Swan” tail risk events, which can ruin us if we’re not prepared. Antifragile begins to build a framework for not only surviving, but profiting from tail risk events, taking advantage of positive asymmetries and convexity.
Skin in the Game furthers Taleb’s philosophy by putting primary emphasis on accountability. The greatest problem with society, he argues, is that too many people/institutions are able to take large risks without facing the consequences when things go wrong. Think Big Banks, circa 2008. By re-associating risk with both reward and ruin, we can reset the function of people, corporations, government, etc… If no one can operate outside the traditional bounds of risk/reward, we will behave more ethically (out of necessity), and society will work better for everyone.
The Righteous Mind: Why Good People are Divided by Politics and Religion – Jonathan Haidt
I spent a significant portion of 2020 following politics, and the buildup to November’s election. Yes, it was a massive waste of my time, but it was unavoidable. I don’t want to get in to politics, but I’ll make this point: isn’t it pretty interesting that almost exactly 50% of the country disagrees with you on most issues? In other words, for every thing that you are certain about, you can find someone else that is certain of the opposite point. Think about that.
Jonathan Haidt has dedicated much of his academic work to moral philosophy, and has summarized much of his work in The Righteous Mind. His mission is to understand the ethical underpinnings of what drives us, and what drives us apart.
In The Righteous Mind, Haidt outlines five foundations of morality: care, fairness, loyalty, authority, and sanctity. He demonstrates that when viewing someone’s words or actions through the lens of moral foundations theory, it becomes easier to understand what is motivating their response or behavior.
This book has greatly improved my ability to understand people whose views differ significantly from my own. And understanding others’ viewpoints is the first step toward narrowing the chasm that divides our country these days.
If you want to explore a similar topic from a more political angle, check out Ezra Klein’s Why We’re Polarized.
Doing Good Better: How Effective Altruism Can Help You Help Others, Do Work that Matters, and Make Smarter Choices about Giving Back – William MacAskill
Capital markets ruthlessly judge the ability of public corporations to effective turn investment into financial returns, and the result is maximal efficiency (for better or worse). But for some reason, we’ve never thought to judge charities and non-profit organizations with the same rigor. If we did, maybe we’d be doing a lot more to solve global problems such as poverty. Effective Altruism is a more recent movement dedicated to achieving this goal.
I first learned of effective altruism after hearing Sam Harris interview Will MacAskill and Toby Ord on his podcast. The core tenet of effective altruism is this: directing resources to the places where they can make the greatest impact. In other words, doing good, better.
Doing Good Better is an excellent primer on the mission and progress of effective altruism. It’s full of information and supporting research outlining the most effective ways to improve lives through the proper allocation of funds. Think of it as philanthropic arbitrage: we are able to use our financial stability and high earning potential to funnel resources toward areas that desperately need the aid.
If you don’t feel like reading this book, you don’t have to. Check out effective altruism, or go visit the GiveWell foundation, and make a donation.
This past December, I made my first donation to GiveWell, and I plan to continue these monthly donations indefinitely. It’s important that those of us in such fortunate positions do what we can to lift others.
Deep Work: Rules for Focused Success in a Distracted World – Cal Newport
2020 was the year that I realized the importance of focus. Between the Coronavirus pandemic, the presidential race, and the 24-hour news cycle, I found myself constantly refreshing browsers and checking twitter feeds, to the detriment of my productivity.
Cal Newport explores the importance of eliminating distractions and improving focus in Deep Work, which is a great companion to his earlier work, So Good They Can’t Ignore You. Whereas So Good answers, “what should I do to be successful?,” Deep Work answers how.
In Deep Work, Newport lays out the benefits of finding focus in a distracting world, gives plenty of tips for developing a routine around deep thinking, and turning your increased focus into significant progress, regardless of your craft.
Although it’s always been fascinating to me, there’s actually a new reason why I’m so interested in improving my productivity. When we sold our house and moved to Virginia in December, I officially became a remote employee for the first time in my life. Suddenly, I am no longer judged by the hours I’m in the office/lab; now I’m only evaluated based on the quality of my output. Hence, the more productive I am, the less hours I have to work. I’m running a pseudo-experiment now where I’m trying to reduce my hours to the least possible, while still excelling in my new role. I’ll report back later.
That wraps up the five most impactful books I read in 2020. Feel free to chime in with your favorites, and I’ll add them to my 2021 reading list.