Which books have kept our global equities team turning pages in recent months? From AI to geopolitics in space, Charles De Gaulle, and music loving detectives. It’s an eclectic mix.
The Outsiders – Eight unconventional CEOs and their radically rational blueprint for success – William N Thorndike Jr
CEOs need to do two things well – run their operations efficiently and deploy the cash generated by those operations. The first part is generally very well understood with leaders generally rising to the top through strong performance within areas such as marketing, engineering and manufacturing. This gives them an excellent understanding of how a business works and how to manage it appropriately. The second part is quite different and this book illustrates it very well. Deciding where to invest the cash generated by a company is a skill most CEOs do not have on day one anywhere near to the same degree as operational knowhow. Mastery of capital allocation sets apart these managers and drives truly impressive shareholder returns from a diverse set of companies – ranging from Warren Buffett and ‘cable cowboy’ John Malone to less well known characters such as Henry Singleton and Teledyne. A little bit of a busman’s holiday given our income strategy’s focus on free cash flow and capital allocation but a very enjoyable book on the topic with some fascinating case studies.
The Bee Sting – Paul Murray
Four Irish writers were among the twelve nominees on the Booker Prize longlist for 2023, a cultural boom fit to match a country with GDP growth of 15.1% in 2021 and over 9% in 2022* Sadly, The Bee Sting by Paul Murray didn’t win, although admittedly it divided the critics, being the subject of a wonderfully negative review in The London Review of Books – Leo Robson · Trapped in a Veil: ‘The Bee Sting’ (lrb.co.uk). A family saga, narrated by a (barely) married couple and their adolescent children, all dealing with the fallout of the global economic crisis of 2008 and its impact on the family car dealership, it is both extremely funny and poignant, touching on issues such as grief, sexuality, and the environment. It is also a great take on modern day Ireland, its rise, fall and subsequent ascent again, and what has been lost along the way alongside rampant, or not so rampant, economic growth. It is, however, extremely long and lugging the hardback off to Spain on holiday last year wasn’t one of my wisest decisions, although the insight into the mind of a teenage girl will hopefully prove invaluable, if not downright frightening, in the years to come.
A Certain Idea of France – Julian Jackson
A strong showing by the Rassemblement National in the European elections prompted President Macron into calling early parliamentary elections. Post the election, France’s 577-seat assembly is now split between three large opposing blocs, none of which have a majority. But if we think that these are perilous times, then they pale into comparison with the France of the 1950s and 1960s, which lost a war in Vietnam, went through a civil war in Algeria – which was part of France, not part of the Empire – numerous governments and the fall of the Fourth Republic. Yet simultaneously, the economy was going gangbusters and just twenty years on from end of World War Two, France had reassumed her role as one of the world’s leading powers, at times trying to forge a path between the US and the Soviet Empire. There is no better prism on these years than A Certain Idea of France, a biography of Charles De Gaulle by Julian Jackson. De Gaulle, was a truly epic figure, a prisoner of the Germans in World War One, who came from virtually nowhere to lead the country in its darkest hour, oversaw the establishment of the Fifth Republic and extricated the country from the Algerian morass at great risk to himself. The book is exceptionally well written, and the cast of characters is extraordinary. There are potted biographies at the back of some of the leading figures of the period, which make the book worth reading for these alone as they are pithy and delightfully catty at times (see the entry on Mitterrand). Worth reading with a pastis to hand, listening to the cicadas in the South of France for sure.
Spice: The 16th Century Contest that Shaped the Modern World – Roger Crowley
Finally, a book I intend to read is Spice: The 16th-Century Contest that Shaped the Modern World by Roger Crowley, which hopefully does more or less what it says on the tin, showing how the lust for cloves and nutmeg lay behind both the development of global trade and European empires. Investors can probably never be reminded enough that the 1677 trade between the Dutch and the English of Run, the Banda island that was the centre of the nutmeg trade, for New York, shows the perils of fixating on an individual commodity, however, seemingly valuable at the time, and the importance of trade as a driver of competition and innovation.
*Admittedly, most economists don’t pay much heed to the Irish GDP figures, because the tax regime encourages multinationals to set up shop there, so whilst their profits are generated in Ireland, they then get shipped elsewhere. The Economist / Central Statistics office suggested that measured by GNI* (a version of gross national income), the Irish economy actually shrank in 2015.
The Case for Nature by Siddarth Shrikanth
A great insight into the significance of natural capita and how it supports the life we live on this planet. That sounds depressing but all is not lost – the book also makes the case for the role the living world can play in dealing with climate change and finding a way to recognise nature as an asset and providing a financial return to incentivise investment. For example, insurance coverage for reef systems (which can reduce the impact of hurricanes on coastal areas) which kicks in as soon as a hurricane is above a certain level, ecotourism and the large role tech can play in measuring this impact with the likes of sensors, drones and digital twins. The book really brings home how we are dependent on nature for living. Human societies, economies, and the companies we invest in can only survive in the long term, thanks to the natural world.
The Coming Wave - Mustafa Suleyman (CEO of Microsoft AI)
AI is one of the biggest themes in our portfolios. This book breaks down the applications of the AI and the consequences it will have on our society and not just on your portfolio returns! The author is a maverick of industry and recently hired back into the space by Microsoft after having co-founded DeepMind. It is key reading for anyone trying to navigate the labyrinth behind the AI buzz.
The Future of Geography - Tim Marshall
Hot on the heels of the excellent Prisoners of Geography (blue book) and the Power of Geography (red book), this third volume explores the reality that geopolitics has moved beyond earth’s confines to now include Space. If you have read the first two books, then dive in, as this a logical extension of the pacy, digestible narrative that the author sets; however, be a prepared for a harder read, part of that is because the content is more technical, less relatable (hands up if you’ve been to Space!) and partly because the content is frankly more scary (in terms of the scope for China/Russia and US squabbling to spill over on a grander scale). If you haven’t read any of them, start with the Prisoners volume. Space is the next natural frontier to be explored, exploited, and controlled by humankind. And no single person is more curious than Elon Musk, who is pretty much single handedly keeping the US Space Programme in the race vs China and other countries that are seeking to expand operations into Space. The whole ISS programme is being threatened by the diplomatic break down between Russia and the US, and relations are not going so well with China either. It feels like the multitude of risks that spring from this level of tension are likely the swamp the opportunities ahead of us. This book is also a reminder that our lives are way more dependent on satellite technology than we care to think about, and the celestial network of twinkling communications craft can be disrupted more easily than I imagined. Here again Elon Musk is showing his ability to dream big having built out his high speed Starlink satellite system, but whilst that is a reality today, he has also set himself a deadline of building a city for 1 million people on Mars by 2050. And you wonder why he is called an optimist? If Science and Politics is your thing then definitely give this a crack, but if you’d rather not confront the scarier realities of life in the 21st Century, then stick to the latest Wilbur Smith.
Standing in the Shadows - Peter Robinson
As you seek a new book to read sometimes you want to find something different, to take a risk or follow a tip. Sometimes it works, but sometimes you just want to read something comfortable, where you know the quality will be good and you will enjoy it before you turn the first page. It’s why we have movie franchises: Indiana Jones; Terminator; Mad Max; Star Wars: Star Trek – my daughter would add Hunger Games and Marvel – mainly because of Chris Pratt in Guardians of the Galaxy, or in video games with Halo and Grand Theft Auto. These are not the best films/games you will ever see/play but you can trust that they will deliver. We like the quality businesses we invest in for the same reasons – in any one year they may not be the best returning stock but over time their quality characteristics will see them deliver outperformance. Quality matters.
And so, it is with authors – they need to be inventive but if they develop a strong character why not use them again and over the series the reader will grow to know and love the character as they watch their development. Well, the book I am recommending is the 28th in the series, which suggests that the author and his characters have some qualities worthy of consideration.
The book develops the links between a murder in 1980 of the student Alice Poole at Leeds University, where Robinson did his degree, with a body found at an archaeological dig in 2019. All this as Banks works his way through the vinyl collection left to him by his friend Ray Cabot. Music is clearly important to Robinson, though it tends to be old/better with the likes of Captain Beefheart’s Trout Mask Replica, as is a good glass of whisky or wine. Music, wine, and a good book – a perfect evening.
Sadly, we know that this 28th outing for DI Banks, the central character, will be his last as Peter Robinson passed away at the age of 72 in October 2022. So read this book in the knowledge that if you like it there are another 27 to keep you busy. The good news is that some of the other great detective series continue. I am looking forward to the latest John Rebus thriller from Ian Rankin which is to be released in October 2024 with the title “Midnight & Blue”. Another detective that likes music and whisky.
Power Failure – William D Cohan
I’m going to go with Power Failure by William D Cohan which charts the rise and fall of General Electric, the multi-industrial American behemoth. The book charts the company from its beginnings in 1892 founded by storied American inventor Thomas Edison but focusing a lot of time on lightning rod “CEO of the Century” Jack Welch and how he transformed the company to a business that at one stage had a market capitalisation of $600bn. Jack was a controversial figure both in his public and private life and his management methods have been repeatedly pored over. William D Cohan then charts how the company unravelled under CEO Jeffrey Immelt who took over the reigns in 2001 to the company’s breakup over the last few years. A fascinating corporate history of an American icon.
