My “Drop What I’m Doing” List

The term “must-read” gets thrown around a lot these days, particularly on Twitter. I’m probably just as guilty as anyone of overusing it. But it’s true – there really are a handful of other investment writers/bloggers (Josh, Ben, Michael, Jake, Charlie, James and others) that rarely sneak anything past this goalie.

But there is a difference, in my opinion, between “must-read” and “literally-stop-whatever-it-is-you’re-doing.” The “must-read” stuff might sit flagged in my inbox for a few days, or linger in a browser tab, or get printed off and stacked on the reading pile. The “drop what I’m doing” stuff doesn’t have time to wait.

This is by no means meant to be a knock on some of the aforementioned folks. Quite the contrary. If anything, it’s a testament to both the quality and quantity of content that these juggernauts produce that if I dropped what I was doing every time one of them posted something awesome I’d never get anything done!

But this post is not about them.

What I wanted to highlight today were the pieces of content that come along less frequently and that spark an immediate reaction in me that leaves me no choice but to literally stop what I am doing so I can consume it.

Here is my “Drop What I’m Doing” list (in no particular order):

1) Howard Marks Memos

Marks is right up there with Buffett and Munger in my book when it comes to the most lucid thinkers and writers in the world of investing. Howard has been writing memos for Oaktree Capital Management for over 25 years and they are a treasure trove of financial wisdom. Below, I link to his latest that dropped yesterday as well as the very first memo from 1990. Read them both to get a sense of how timeless his messages are, regardless of when they were written.

Example(s):

There They Go Again…Again

The Route to Performance

My reaction when a new memo hits my inbox:

2) Cliff’s Perspectives

Nobody will ever accuse Cliff Asness of pulling punches or mincing words. Cliff is one of the brightest minds in investing and has pioneered of a number of quantitative strategies that have catapulted AQR into the powerhouse asset manager that they are today. As a firm, AQR is constantly cranking out high quality academic research, but what I look forward to the most is hearing directly from Cliff himself through his semi-regular blog, Cliff’s Perspectives. I’m hard pressed to think of any other writer who’s footnotes I enjoy just as much – if not more – than their actual articles. There’s really nothing quite like Cliff’s unique blend of persnickety wit and intellectual rigor.

Example(s):

A Fanatic is One Who Can’t Change his Mind and Won’t Change the Subject

Factor Timing is Hard

How Can a Strategy Still Work If Everyone Knows About It?

When Cliff throws the gauntlet down against his frenemy quant Rob Arnott:

3) Long-form Morgan Housel

I’ll go on record and say that Morgan Housel is pound-for-pound the best financial writer of my generation. Morgan posts at least weekly for Collaborative Fund and not a single article of his is anything less than excellent:

Where Morgan has truly shined as of late are the occasional long-form PDFs that take a deep dive into topics such as financial bubbles, the decline in public company listings, and the historical reactions to world changing innovations.

Morgan’s unique combination of deep insight, acute cleverness, and broad accessibility makes his work equally impressive to both novice investors and the financial glitterati.

Example(s):

The Reasonable Formation of Unreasonable Things

The Bad Side of a Good Idea

The warm and fuzzies I get from Morgan’s writing:

4) Jesse Livermore/Philosophical Economics

The pseudonymous blogger “Jesse Livermore” at Philosophical Economics has an uncanny ability to tackle complex, meaty topics and have even the most staunch advocates of a particular subject challenging their own priors. I have an immense amount of respect for the novel ways he approaches big questions like “Do current equity valuations deserve to be higher?” or “What is the optimal amount of active management to have in the financial system?”

One of these days I’m going to figure out who is actually writing these amazing posts!

Example(s):

Diversification, Adaptation, and Stock Market Valuation

The Value of Active Management: A Journey Into Indexville

Asset Markets as Banks

My internal applause each time “Jesse” blows my mind:

5) Patrick O’Shaughnessy’s “Invest Like the Best” podcast

Patrick is a consummate professional and an absolute natural when it comes to being a podcast host. I would say he has taken to it like a fish to water but I’m not even sure fish are as comfortable swimming as Patrick is with interviewing. He knows exactly the right questions to ask and more importantly, he knows when to shut up and let his guest do the talking!

The eclectic list of guests that Patrick has had on the podcast have included everyone from venture capitalists and hedge fund managers to Hollywood producers and the founder of a ketchup company. Regardless of the guest, each interview is jam packed with entertaining stories and thought-provoking insights.

Example(s):

Compound Your Face Off, with Wes Gray – [Invest Like the Best, EP.47]

Esoteric Assets with Rishi Ganti – [Invest Like the Best, EP.46]

Me waiting for the new episode to drop Tuesday morning:

Me after listening:

6) Epsilon Theory

I’m not quite sure how to describe Epsilon Theory, so i’ll let them do it for me:

Epsilon Theory is Dr. Ben Hunt’s ongoing examination of the narrative machine driving human behavior, political policy and, ultimately, capital markets—an unconventional worldview best understood through the lenses of history, game theory and philosophy.

Dr. Hunt is the Chief Investment Strategist at Salient Partners. He has been writing his Epsilon Theory newsletter there for the last few years and it’s following has grown by such leaps and bounds that it now has it’s own dedicated website, a podcast, and has expanded to now include missives from some of the other top minds at Salient, including Rusty Guinn and Jeremy Radcliffe. Rusty’s ongoing multi-part series of “The Five Things That Don’t Matter” and “The Five Things That Matter” has been out of this world good so far.

Example(s):

Gradually and Then Suddenly

Tell My Horse

Chili P is My Signature

When Epsilon Theory connects the dots between monetary policy and some obscure pop culture reference:

7) GMO Quarterly Letters

When Jeremy Grantham and Ben Inker of GMO speak, people listen. You may not always agree with them, but they always come to the table with cogent arguments and thoughtful analysis supporting whatever topic they are writing about that quarter. Bonus points when James Montier comes out of hiding and throws his two cents in.

Example(s):

Up At Night and This Time Seems Very, Very Different

The Financial Twitterverse when the latest GMO piece drops:

8) Abnormal Returns “Finance Blogger Wisdom” Series

Every year when Tadas Viskanta takes a well-deserved vacation from running the #1 site for curated financial content, he asks some of his fellow bloggers to submit answers to several provocative questions. He then posts the complied results to each question throughout the course of the week. The answers never disappoint.

Example(s):

Finance blogger wisdom: one piece of advice

Me wanting to high-five everyone that participated:

9) Anything involving Ed Thorp

I’m an admitted Ed Thorp junkie. He holds a permanent place on my Mount Rushmore of Investors. To me, he is the real-life version of The Most Interesting Man in the World, minus the Mexican beer.

Thorp’s accolades are far too numerous to get into here (we’ll save those for a separate post). His memoir was released earlier this year, and is chock-full of some incredible stories. He was also a recent guest on Barry Ritholz’s Masters in Business podcast. I can’t recommend reading/listening to both enough.

Example(s):

A Man for All Markets (Amazon)

Ed Thorp on Beating Vegas & Wall Street (Masers in Business podcast)

A Dozen Lessons on Investing from Ed Thorp (25iq)

Me leaving work when I got the notification Amazon delivered Thorp’s memoir to my home:

10) Michael Mauboussin White Papers

Michael is the author of several great investment books and in his role as Head of Global Financial Strategies at Credit Suisse over the last several years, he and his team have put together some amazing white papers on topics such as capital allocation, active management, company moats, the paradox of skill, and the attributes of great investors. The folks at Hurricane Capital have done the world a tremendous service by archiving all of these papers. Michael recently left Credit Suisse to join Blue Mountain Capital Management as Director of Research. Let’s all keep our fingers crossed that he continues to share his wealth of knowledge with all of us in his new role!

Example(s):

The Incredible Shrinking Universe of Stocks – The Causes and Consequences of Fewer U.S. Equities

Looking for Easy Games – How Passive Investing Shapes Active Management

Me after finishing one of Michael’s papers:

What I hope everyone can take away from this blog post is…err, sorry I gotta go, something just hit my inbox.