David Kass 2018 Summer Reading ListDr. David Kass
The 2018 Summer Reading List from the Robert H. Smith School of Business at the University of Maryland contains 16 recommendations including my own:
The Warren Buffett Shareholder: Stories from inside the Berkshire Hathaway Annual Meeting by Lawrence A. Cunningham and Stephanie Cuba
“This book, edited by Lawrence Cunningham and Stephanie Cuba, compiles stories from 43 shareholders who have each regularly attended Berkshire Hathaway’s annual meetings over decades. They write about the educational and often entertaining aspects of the meetings, which are hosted by Berkshire Chairman Warren Buffett, considered by many to be the world’s greatest investor. They write of the camaraderie that has spontaneously built among attendees and the social and professional relationships that result. I’m one of the 43 contributors to this volume, having accompanied a group of Smith School undergraduate students to 10 of the Berkshire annual meetings.” — Smith School professor David Kass
Article by Dr. David Kass
University Of Maryland 2018 Summer Reading List
Behave: The Biology of Humans at Our Best and Worst by Robert Sapolsky
From the celebrated neurobiologist and primatologist, a landmark, genre-defining examination of human behavior, both good and bad, and an answer to the question: Why do we do the things we do?
Sapolsky’s storytelling concept is delightful but it also has a powerful intrinsic logic: he starts by looking at the factors that bear on a person’s reaction in the precise moment a behavior occurs, and then hops back in time from there, in stages, ultimately ending up at the deep history of our species and its evolutionary legacy.
And so the first category of explanation is the neurobiological one. A behavior occurs–whether an example of humans at our best, worst, or somewhere in between. What went on in a person’s brain a second before the behavior happened? Then Sapolsky pulls out to a slightly larger field of vision, a little earlier in time: What sight, sound, or smell caused the nervous system to produce that behavior? And then, what hormones acted hours to days earlier to change how responsive that individual is to the stimuli that triggered the nervous system? By now he has increased our field of vision so that we are thinking about neurobiology and the sensory world of our environment and endocrinology in trying to explain what happened.
Sapolsky keeps going: How was that behavior influenced by structural changes in the nervous system over the preceding months, by that person’s adolescence, childhood, fetal life, and then back to his or her genetic makeup? Finally, he expands the view to encompass factors larger than one individual. How did culture shape that individual’s group, what ecological factors millennia old formed that culture? And on and on, back to evolutionary factors millions of years old.
The result is one of the most dazzling tours d’horizon of the science of human behavior ever attempted, a majestic synthesis that harvests cutting-edge research across a range of disciplines to provide a subtle and nuanced perspective on why we ultimately do the things we do…for good and for ill. Sapolsky builds on this understanding to wrestle with some of our deepest and thorniest questions relating to tribalism and xenophobia, hierarchy and competition, morality and free will, and war and peace. Wise, humane, often very funny, Behave is a towering achievement, powerfully humanizing, and downright heroic in its own right.
The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg
In The Power of Habit, award-winning business reporter Charles Duhigg takes us to the thrilling edge of scientific discoveries that explain why habits exist and how they can be changed. Distilling vast amounts of information into engrossing narratives that take us from the boardrooms of Procter & Gamble to the sidelines of the NFL to the front lines of the civil rights movement, Duhigg presents a whole new understanding of human nature and its potential. At its core, The Power of Habit contains an exhilarating argument: The key to exercising regularly, losing weight, being more productive, and achieving success is understanding how habits work. As Duhigg shows, by harnessing this new science, we can transform our businesses, our communities, and our lives.
Washington: A Life by Ron Chernow
A gripping portrait of the first president of the United States from the author of Alexander Hamilton, the New York Times bestselling biography that inspired the musical.
Celebrated biographer Ron Chernow provides a richly nuanced portrait of the father of our nation and the first president of the United States. With a breadth and depth matched by no other one volume biography of George Washington, this crisply paced narrative carries the reader through his adventurous early years, his heroic exploits with the Continental Army during the Revolutionary War, his presiding over the Constitutional Convention, and his magnificent performance as America’s first president. In this groundbreaking work, based on massive research, Chernow shatters forever the stereotype of George Washington as a stolid, unemotional figure and brings to vivid life a dashing, passionate man of fiery opinions and many moods.
In economic situations where action entails a fixed cost, inaction is the norm. Action is taken infrequently, and adjustments are large when they occur. Interest in economic models that exhibit ”lumpy” behavior of this kind has exploded in recent years, spurred by growing evidence that it is typical in many important economic decisions, including price setting, investment, hiring, durable goods purchases, and portfolio management.
In The Economics of Inaction, leading economist Nancy Stokey shows how the tools of stochastic control can be applied to dynamic problems of decision making under uncertainty when fixed costs are present. Stokey provides a self-contained, rigorous, and clear treatment of two types of models, impulse and instantaneous control. She presents the relevant results about Brownian motion and other diffusion processes, develops methods for analyzing each type of problem, and discusses applications to price setting, investment, and durable goods purchases.
The New Geography of Jobs by Enrico Moretti
We’re used to thinking of the United States in opposing terms: red versus blue, haves versus have-nots. But today there are three Americas. At one extreme are the brain hubs—cities like San Francisco, Boston, and Durham—with workers who are among the most productive, creative, and best paid on the planet. At the other extreme are former manufacturing capitals, which are rapidly losing jobs and residents. The rest of America could go either way. For the past thirty years, the three Americas have been growing apart at an accelerating rate. This divergence is one the most important developments in the history of the United States and is reshaping the very fabric of our society, affecting all aspects of our lives, from health and education to family stability and political engagement. But the winners and losers aren’t necessarily who you’d expect.
Enrico Moretti’s groundbreaking research shows that you don’t have to be a scientist or an engineer to thrive in one of the brain hubs. Carpenters, taxi-drivers, teachers, nurses, and other local service jobs are created at a ratio of five-to-one in the brain hubs, raising salaries and standard of living for all. Dealing with this split—supporting growth in the hubs while arresting the decline elsewhere—is the challenge of the century, and The New Geography of Jobs lights the way.
Advances in behavioral sciences are giving us an ever better understanding of how our brains work, why we make the choices we do, and what it takes for us to be at our best. But it has not always been easy to see how to apply these insights in the real world–until now.
In How to Have a Good Day, Webb explains exactly how to apply this science to our daily tasks and routines. She translates three big scientific ideas into step-by-step guidance that shows us how to set better priorities, make our time go further, ace every interaction, be our smartest selves, strengthen our personal impact, be resilient to setbacks, and boost our energy and enjoyment. Through it all, Webb teaches us how to navigate the typical challenges of modern workplaces—from conflict with colleagues to dull meetings and overflowing inboxes—with skill and ease.
Filled with stories of people who have used Webb’s insights to boost their job satisfaction and performance at work, How to Have a Good Day is the book so many people wanted when they finished Nudge, Blink and Thinking Fast and Slow and were looking for practical ways to apply this fascinating science to their own lives and careers.
A remarkable and much-needed book, How to Have a Good Day gives us the tools we need to have a lifetime of good days.
Competing Against Luck: The Story of Innovation of Customer Choice by Clayton Christensen
The foremost authority on innovation and growth presents a path-breaking book every company needs to transform innovation from a game of chance to one in which they develop products and services customers not only want to buy, but are willing to pay premium prices for.
How do companies know how to grow? How can they create products that they are sure customers want to buy? Can innovation be more than a game of hit and miss? Harvard Business School professor Clayton Christensen has the answer. A generation ago, Christensen revolutionized business with his groundbreaking theory of disruptive innovation. Now, he goes further, offering powerful new insights.
After years of research, Christensen and his co-authors have come to one critical conclusion: our long held maxim–that understanding the customer is the crux of innovation–is wrong. Customers don’t buy products or services; they “hire” them to do a job. Understanding customers does not drive innovation success, he argues. Understanding customer jobs does. The “Jobs to Be Done” approach can be seen in some of the world’s most respected companies and fast-growing startups, including Amazon, Intuit, Uber, Airbnb, and Chobani yogurt, to name just a few. But this book is not about celebrating these successes–it’s about predicting new ones.
Christensen, Hall, Dillon, and Duncan contend that by understanding what causes customers to “hire” a product or service, any business can improve its innovation track record, creating products that customers not only want to hire, but that they’ll pay premium prices to bring into their lives. Jobs theory offers new hope for growth to companies frustrated by their hit and miss efforts.
This book carefully lays down the authors’ provocative framework, providing a comprehensive explanation of the theory and why it is predictive, how to use it in the real world–and, most importantly, how not to squander the insights it provides.
In looking at the forces that brought our current administration to power one thing is clear: much of the population believes that our economic system is rigged to enrich the privileged elites at the expense of hard-working Americans. This is a belief held equally on both sides of political spectrum, and it seems only to be gaining momentum.
A key reason, says Financial Times columnist Rana Foroohar, is the fact that Wall Street is no longer supporting Main Street businesses that create the jobs for the middle and working class. She draws on in-depth reporting and interviews at the highest rungs of business and government to show how the “financialization of America”—the phenomenon by which finance and its way of thinking have come to dominate every corner of business—is threatening the American Dream.
Now updated with new material explaining how our corrupted financial system propelled Donald Trump to power, Makers and Takers explores the confluence of forces that has led American businesses to favor balance-sheet engineering over the actual kind, greed over growth, and short-term profits over putting people to work. From the cozy relationship between Wall Street and Washington, to a tax code designed to benefit wealthy individuals and corporations, to forty years of bad policy decisions, she shows why so many Americans have lost trust in the system, and why it matters urgently to us all.
Through colorful stories of both “Takers,” those stifling job creation while lining their own pockets, and “Makers,” businesses serving the real economy, Foroohar shows how we can reverse these trends for a better path forward.
Nate Silver built an innovative system for predicting baseball performance, predicted the 2008 election within a hair’s breadth, and became a national sensation as a blogger—all by the time he was thirty. He solidified his standing as the nation’s foremost political forecaster with his near perfect prediction of the 2012 election. Silver is the founder and editor in chief of the website FiveThirtyEight.
Drawing on his own groundbreaking work, Silver examines the world of prediction, investigating how we can distinguish a true signal from a universe of noisy data. Most predictions fail, often at great cost to society, because most of us have a poor understanding of probability and uncertainty. Both experts and laypeople mistake more confident predictions for more accurate ones. But overconfidence is often the reason for failure. If our appreciation of uncertainty improves, our predictions can get better too. This is the “prediction paradox”: The more humility we have about our ability to make predictions, the more successful we can be in planning for the future.
In keeping with his own aim to seek truth from data, Silver visits the most successful forecasters in a range of areas, from hurricanes to baseball, from the poker table to the stock market, from Capitol Hill to the NBA. He explains and evaluates how these forecasters think and what bonds they share. What lies behind their success? Are they good—or just lucky? What patterns have they unraveled? And are their forecasts really right? He explores unanticipated commonalities and exposes unexpected juxtapositions. And sometimes, it is not so much how good a prediction is in an absolute sense that matters but how good it is relative to the competition. In other cases, prediction is still a very rudimentary—and dangerous—science.
Silver observes that the most accurate forecasters tend to have a superior command of probability, and they tend to be both humble and hardworking. They distinguish the predictable from the unpredictable, and they notice a thousand little details that lead them closer to the truth. Because of their appreciation of probability, they can distinguish the signal from the noise.
With everything from the health of the global economy to our ability to fight terrorism dependent on the quality of our predictions, Nate Silver’s insights are an essential read.
Prediction Machines: The Simple Economics of Artificial Intelligence by Ajay Agarwal, Joshua Gans and Avi Goldfarb
Artificial intelligence does the seemingly impossible, magically bringing machines to life–driving cars, trading stocks, and teaching children. But facing the sea change that AI will bring can be paralyzing. How should companies set strategies, governments design policies, and people plan their lives for a world so different from what we know? In the face of such uncertainty, many analysts either cower in fear or predict an impossibly sunny future.
But in Prediction Machines, three eminent economists recast the rise of AI as a drop in the cost of prediction. With this single, masterful stroke, they lift the curtain on the AI-is-magic hype and show how basic tools from economics provide clarity about the AI revolution and a basis for action by CEOs, managers, policy makers, investors, and entrepreneurs.
When AI is framed as cheap prediction, its extraordinary potential becomes clear:
- Prediction is at the heart of making decisions under uncertainty. Our businesses and personal lives are riddled with such decisions.
- Prediction tools increase productivity–operating machines, handling documents, communicating with customers.
- Uncertainty constrains strategy. Better prediction creates opportunities for new business structures and strategies to compete.
Penetrating, fun, and always insightful and practical, Prediction Machines follows its inescapable logic to explain how to navigate the changes on the horizon. The impact of AI will be profound, but the economic framework for understanding it is surprisingly simple.
Nudge: Improving Decisions about Health, Wealth and Happiness by Richard Thaler and Cass Sunstein
Every day we make choices—about what to buy or eat, about financial investments or our children’s health and education, even about the causes we champion or the planet itself. Unfortunately, we often choose poorly. Nudge is about how we make these choices and how we can make better ones. Using dozens of eye-opening examples and drawing on decades of behavioral science research, Nobel Prize winner Richard H. Thaler and Harvard Law School professor Cass R. Sunstein show that no choice is ever presented to us in a neutral way, and that we are all susceptible to biases that can lead us to make bad decisions. But by knowing how people think, we can use sensible “choice architecture” to nudge people toward the best decisions for ourselves, our families, and our society, without restricting our freedom of choice.
Universal Principles of Design by William Lidwell, Kritina Holden and Jill Butler
Whether a marketing campaign or a museum exhibit, a video game or a complex control system, the design we see is the culmination of many concepts and practices brought together from a variety of disciplines. Because no one can be an expert on everything, designers have always had to scramble to find the information and know-how required to make a design work—until now.
Universal Principles of Design, Revised and Updated is a comprehensive, cross-disciplinary encyclopedia of design. Richly illustrated and easy to navigate, it pairs clear explanations of every design concept with visual examples of the concepts applied in practice. From the “80/20” rule to chunking, from baby-face bias to Occam’s razor, and from self-similarity to storytelling, every major design concept is defined and illustrated for readers to expand their knowledge.
This landmark reference will become the standard for designers, engineers, architects, and students who seek to broaden and improve their design expertise.
A hidden circulatory system flows beneath the surface of global finance, carrying trillions of dollars from drug trafficking, tax evasion, bribery, and other illegal enterprises. This network masks the identities of the individuals who benefit from these activities, aided by bankers, lawyers, and auditors who get paid to look the other way.
In Secrecy World, the Pulitzer Prize winning investigative reporter Jake Bernstein explores this shadow economy and how it evolved, drawing on millions of leaked documents from the files of the Panamanian law firm Mossack Fonseca―a trove now known as the Panama Papers―as well as other journalistic and government investigations. Bernstein shows how shell companies operate, how they allow the superwealthy and celebrities to escape taxes, and how they provide cover for illicit activities on a massive scale by crime bosses and corrupt politicians across the globe.
Bernstein traveled to the Caribbean, Latin America, Europe, and within the United States to uncover how these strands fit together―who is involved, how they operate, and the real-world impact. He recounts how Mossack Fonseca was exposed and what lies ahead for the corporations, banks, law firms, individuals, and governments that are implicated.
Secrecy World offers a disturbing and sobering view of how the world really works and raises critical questions about financial and legal institutions we may once have trusted.
In the 1920s, the richest people per capita in the world were members of the Osage Nation in Oklahoma. After oil was discovered beneath their land, the Osage rode in chauffeured automobiles, built mansions, and sent their children to study in Europe.
Then, one by one, the Osage began to be killed off. The family of an Osage woman, Mollie Burkhart, became a prime target. One of her relatives was shot. Another was poisoned. And it was just the beginning, as more and more Osage were dying under mysterious circumstances, and many of those who dared to investigate the killings were themselves murdered.
As the death toll rose, the newly created FBI took up the case, and the young director, J. Edgar Hoover, turned to a former Texas Ranger named Tom White to try to unravel the mystery. White put together an undercover team, including a Native American agent who infiltrated the region, and together with the Osage began to expose one of the most chilling conspiracies in American history.
The Man Who Knew by Sebastian Mallaby
Sebastian Mallaby’s magisterial biography of Alan Greenspan, the product of over five years of research based on untrammeled access to his subject and his closest professional and personal intimates, brings into vivid focus the mysterious point where the government and the economy meet. To understand Greenspan’s story is to see the economic and political landscape of the last 30 years–and the presidency from Reagan to George W. Bush–in a whole new light. As the most influential economic statesman of his age, Greenspan spent a lifetime grappling with a momentous shift: the transformation of finance from the fixed and regulated system of the post-war era to the free-for-all of the past quarter century. The story of Greenspan is also the story of the making of modern finance, for good and for ill.
Greenspan’s life is a quintessential American success story: raised by a single mother in the Jewish émigré community of Washington Heights, he was a math prodigy who found a niche as a stats-crunching consultant. A master at explaining the economic weather to captains of industry, he translated that skill into advising Richard Nixon in his 1968 campaign. This led to a perch on the White House Council of Economic Advisers, and then to a dazzling array of business and government roles, from which the path to the Fed was relatively clear. A fire-breathing libertarian and disciple of Ayn Rand in his youth who once called the Fed’s creation a historic mistake, Mallaby shows how Greenspan reinvented himself as a pragmatist once in power. In his analysis, and in his core mission of keeping inflation in check, he was a maestro indeed, and hailed as such. At his retirement in 2006, he was lauded as the age’s necessary man, the veritable God in the machine, the global economy’s avatar. His memoirs sold for record sums to publishers around the world.
But then came 2008. Mallaby’s story lands with both feet on the great crash which did so much to damage Alan Greenspan’s reputation. Mallaby argues that the conventional wisdom is off base: Greenspan wasn’t a naïve ideologue who believed greater regulation was unnecessary. He had pressed for greater regulation of some key areas of finance over the years, and had gotten nowhere. To argue that he didn’t know the risks in irrational markets is to miss the point. He knew more than almost anyone; the question is why he didn’t act, and whether anyone else could or would have. A close reading of Greenspan’s life provides fascinating answers to these questions, answers whose lessons we would do well to heed. Because perhaps Mallaby’s greatest lesson is that economic statesmanship, like political statesmanship, is the art of the possible. The Man Who Knew is a searching reckoning with what exactly comprised the art, and the possible, in the career of Alan Greenspan.