1. The Big Short by Michael Lewis This was a New York Times' Bestseller in non-fiction in 2010. This book traces the key players and events that created the credit default swaps (CDS) that were bets against the collateralized debt obligation (CDO) bubble. The creation of the CDS allowed a few smart people to profit tremendously while the rest of the world was subsequently mired a deep recession. Highlight: Michael Burry of Scion Capital, who was a trained as a medical doctor turned value investor, and was one of the few to profit from the CDO bubble. Scion Capital under Burry posted returns of 489% compared to the S&P 500 return over the same period (Nov 2000 to June 2008) of just over two percent.
2. Player Piano by Kurt Vonnegut Inspired from his work at General Electric in which he observed a computer operated milling machine cut blades for gas turbines. This book outlines a dystopian future of automation and the relegation of most of the human workforce to low value added manual labor. This book explores the bifurcation of society between the haves (engineers and managers) and the have-nots (unskilled or lowly skilled workers). Written in 1952 this book is very prescient of modern times: predicting the erosion of the middle class due to automation and the large gap between those who can design and engineer the automatons and those who can not. Favourite quote: "At this point in history, 1952 A.D., our lives and freedom depend largely upon the skill and imagination and courage of our managers and engineers, and I hope that God will help them to help us all stay alive and free." Tip of the hat to Dr. Richard Parker for recommending this book.
3. Cryptonomicon by Neal Stephenson Another Dr. Richard Parker recommendation. This book is a long and nerdy book, so naturally I enjoyed it. The book has two story-lines: the first story-line takes place around the events of WWII; and the second story-line is during the 1990's internet boom. The WWII-era story-line traces the development of code-breaking and its mathematical foundation that is codified in the cryptographer's bible called the "Cryptonomicon". The WWII-era story-line also follows the tactical-deception work of a marine raider. During this story-line, fictional characters of the book often meet and converse with historical figures such as Alan Turing and Douglas MacArthur. (Of the two story-lines, the WWII-era one was my favourite). The second story-line, traces the grandson of the WWII-era protagonist as he and his company build a data haven for electronic banking and digital currency storage in the fictional Sultanate of Kinakuta. The book has a pretty good description of Van Eck phreaking, and has two tips-of-the-hat to Linux (called Finux in the book) and IBM (called ETC). The non-technical reader might have some difficulty getting through some of the cryptography algorithms described.
4. Civilization by Niall Ferguson This was my first Niall Ferguson book. I saw his TED talk before reading the book, so I had an idea of the "killer apps" he was going to present. In the 14th century western civilization, as characterized by the Kingdom's of Europe, looked like they would forever remain petty and provincial, while Ming China and the Ottoman Empire would forge ahead into the civilizations of the future. However, starting in the fifteenth century the west developed six killer apps that allowed it to leap ahead of the rest. Now western civilization is losing its predominance due to other civilizations adopting the six killer apps: competition, science, the rule of law, consumerism, modern medicine and the protestant work ethic. Favourite quote: "Capitalist competition has been disgraced by the recent financial crisis and the rampant greed of the bankers. Science is studied by too few of our children at school and university. Private property rights are repeatedly violated by governments that seem to have an insatiable appetite for taxing our incomes and our wealth and wasting a large portion of the proceeds... All we risk being left with are a vacuous consumer society and culture of relativism - a culture that says any theory or opinion, no matter how outlandish, is just as good as whatever it was we used to believe in."
5. The Lean Startup by Eric Ries This book is pretty much mandatory reading these days at GE's Global Research Center due to the adoption of "Fastworks" - that is the codification and wholesale process adoption presented in this book. The Lean Startup tries to apply the scientific method to business creation. The goal of a lean startup is to test hypotheses in an effort to achieve "validated learning": that is demonstrating empirically valuable truths about a startup's present and future business prospects. The book presents tools like the minimum viable product and cohort analysis to tests assumptions and hypotheses quickly and empirically. This book and the creation of the "Fastworks" methodology is another step in realizing Jack Welch's dream of a small company feel with big company resources. See here for a good overview and summary of the methodology.
Honourable mention: Foundation Series by Isaac Asimov I read the first two books in the series: Foundation and Foundation and Empire. I could hardly put them down. Friends have urged me to read these for years and all I can say is that I should have read them sooner. Reading these was a Seldon event in my reading life.
