Empire of Pain: The Secret History of the Sackler Dynasty is a 2021 book by Patrick Radden Keefe. The book examines the history of the Sackler family, including the founding of Purdue Pharma, their role in the marketing of pharmaceuticals, and the family’s central role in the opioid epidemic. Available on Audible, etc.
In Invention: A Life, James Dyson reveals how he came to set up his own company and led it to become one of the most inventive technology companies in the world. It is a compelling and dramatic tale, with many obstacles overcome. Dyson has always looked to the future, even setting up his own university to help provide the next generation of engineers and designers. For, as he says, “everything changes all the time, so experience is of little use.”
Whether you are someone who has an idea for a better product, an aspiring entrepreneur, whether you appreciate great design or a pause-resisting story, Invention: A Life offers you inspiration, hope, and much more.
Available on Audible, etc.
Published in: 1993
When Charles Darwin wrote his memoirs, he was 67 years old and lived a secluded life in his home, where he observed the outraged debate that his theories gave rise to. During his lifetime he had written some of the most important books in history, where mainly On the Origin of Species and The Desccent of Man sent shock waves through churches and universities. His autobiography was published in 1887, five years after his death.
THE DOCTOR’S SON. Charles Darwin was born in Shrewsbury on 12 February 1809. His mother died when he was eight years old, and his father was a medical doctor and a careful businessman. The father was not very scientifically inclined but acted as moral support. Darwin’s grandfather, however, had written the Botanic Garden and other works. Charles Darwin’s interest in natural history, especially in collecting, started in his early school years.
SCHOOL – A TORMENT. Darwin regarded primary school as an institution, and he had difficulty learning languages (which was considered particularly important). However, from an early age he had felt a strong desire to understand or explain everything he had observed, and to bring all the facts together under a universal law. In 1825, Darwin, like his brother, began studying medicine at the University of Edinburgh. But the lecture-based teaching was unbearably boring. He was by then told that his father would leave behind a fortune large enough to live well on. It was enough to not make an effort in the medical studies. After two years of study in Edinburgh, Cambridge followed.
MENTOR HENSLOW. From a study point of view, the three years at Cambridge were as wasted as the years at Edinburgh. He tried to understand mathematics, but it went slowly. In Cambridge, however, he became friends with Professor Henslow – a man with extensive knowledge in botany, entomology, chemistry, mineralogy, and geology. It was Henslow who said that Captain Fitz-Roy was willing to take an unpaid natural scientist on the journey with “The Beagle”. Darwin’s father first opposed this idea but said: “if you can find a wise and sensible man who advises you to travel, I give my consent”.
THE LEGENDARY ”BEAGLE”. Beagle sailed from Plymouth in December 1831. While the expedition was originally planned to last for two years, it lasted almost five, and Beagle did not return until October 1836. Darwin spent most of this time exploring on land (39 months on land; 18 months at sea).
RETURNING HOME. In March 1837, Darwin rented an apartment in London where he completed his diary for two years, lectured at the Geological Society, began the manuscript of the Geological Observations on South America (published in 1846) and edited the book Zoology of the Voyage of the Beagle. In the summer of 1837 he began, without setting up a theory, to compile facts for On the Origin of Species, which he worked on for the next twenty years. When he looks back at the books and writings he read and summarized, he is amazed at his diligence.
“In October 1838 … I happened to read for amusement Malthus on Population … it at once struck me that under these circumstances favorable variations would tend to be preserved, and unfavorable ones to be destroyed. The result of this would be the formation of new species.”
A 20 YEAR PROJECT. After Darwin read Malthus, he finally had a theory to work on. Darwin began working on the subject in 1837. In 1842 he had drawn “some short notes” of five pages, and in 1844 expanded them to a sketch of 230 pages. In early 1856, Darwin wrote down the theory in detail, and this material became three to four times more comprehensive, albeit only a summary of the material collected, than what was published in 1859 in On the Origin of Species. Darwin says that he gained a lot from waiting with the publication from 1839, when the theory was clearly formulated, until 1859. The timing contributed to the theory being well received.
SELF-REFLECTION. Darwin did not consider himself to have the quick perception or wit of many other intelligent scientists (he was therefore a bad critic; “when I read an essay or book for the first time, it usually arouses my admiration, and it is only after a lot of thought that I detect the weak points.”). His ability was limited to, for example, follow a long and completely abstract reasoning used in metaphysics or higher mathematics. Some critics said, “of course he is a good observer, but he has no ability to reason.” However, Darwin did not agree with this. Origin of Species is a single long reasoning and has convinced many knowledgeable men.
PATIENCE AND PERSEVERANCE. Darwin describes himself as quite inventive and has a lot of common sense and good judgment (“as a reasonably successful lawyer or doctor but no more than that”). Darwin judged that he was better than people in general at noticing, and carefully observing, things that others easily overlooked. His diligence when it came to observing and gathering facts as well as love of science could not have been greater. This gave him such patience that he was able to reflect or ponder unresolved problems for many years. He always tried to keep his mind free so that he could abandon any hypothesis if it turned out to contradict the facts.
Published in: 2017
Edward Thorp is the MIT professor who solved blackjack, roulette and baccarat and won over Las Vegas. At the age of 32, he went on to Wall Street to outperform the stock market for the next 30 years. Through his company Princeton Newport Partners, Thorp did arbitrage with shares, warrants, options and convertibles and showed positive results every quarter for a period of 20 years. The annualized return was 19.1% (compared to the S&P 500 10.2%). He then started Ridgeline Partners, which had an annualized return of 21.0% for the next ten years.
IDENTIFY INEFFICIENCIES, EXPLOIT & REPEAT. Thorp’s career can be divided into phases; (1) he identified a game with a theory that it was “beatable”, (2) he learned how to beat it, (3) he practiced it and made a fortune and (4) moved on when the inefficiency disappeared. Thorp was driven by intellectual curiosity rather than money.
“We did not ask: ‘Is the market efficient, but rather, in what ways and to what extent is the market inefficient? And how can we exploit this?”
MENTAL MODELS AND RATIONALITY. Thorp learned early on to think not only in pictures, words or numbers but also in models – simplified versions of reality. He strives to be constantly rational in all aspects of his life. For example, he refrains from taking a position on any topic or issue before he can make a decision based on facts. Another example is that he considers it important to keep track of his hourly wage and to strive to outsource the services that have a lower cost level – it is like time repurchases below market value.
PERFORMANCE BEFORE PERFECTION. According to Thorp, gambling is an excellent entrance into asset management. You learn to control your emotions, calculate odds, solve logical problems and stick to your strategy. He believes that an imperfect solution that can be used in practice is better than a perfect solution that is difficult to implement in practice. The strategy he used to beat blackjack was not the most effective he developed, but it was easy to apply and had enough of an edge.
START SMALL AND SCALE UP. When Thorp took on a new “game”, he always started with small bets that he was emotionally comfortable with. He did not raise the stakes until he was comfortable with the system and the betting process. He adopted this approach in Las Vegas as well as on Wall Street.
“I was lucky in that I came at investments through blackjack tables. And the blackjack tables are an amazingly good training ground for learning how to invest, how to think about investments, how to manage them. And the reason is that they teach you, on the one hand, to use probability and statistics to evaluate things. And on the other, they teach you discipline.”
PURSUE YOUR EDGE. Thorp’s strategies for gambling and investing had many similarities. He was looking for a small edge to exploit over and over again. In this way, the “law of great numbers” guaranteed that he would win over time. He used Kelly’s formula (a formula for theoretically optimal bet size) to optimize betting levels. Thorp believes, however, that it is important to constantly question one’s edge. Competitors are adapting and markets are changing. It is important to continue to develop and ensure that one’s strategies remain relevant.
DO NOT SKIMP ON THE SPREAD. Thorp questioned his traders who boasted that they “scalped” the spread when they traded. He claimed that they earned $0.25 ten times and lost $10 once – a calculation he did not like. Traders only saw what they earned from the stingy bids and did not think about the opportunity cost the times the stock was not traded down.
THE GOAL IS PEACE OF MIND. After his time in the financial industry, Thorp realized the value of independence. It is much less stressful to only do your own business than to run a large fund with powerful clients who question your decisions. Thorp believes that one should construct their activities with the goal of having peace of mind. Then you are most clear-minded and the happiest. He believes that what is most important in life is how you spend your time and the answer to that question depends on where you are in life and where you want to be in life.
“When I was 35, I had lots of time and less money, so doing 10% or so better than the index, with little risk, was attractive and fun. At 85, the marginal value of time is higher, and the marginal value of money is lower. These are strong disincentives when I can make a long-run 10% or so by doing nothing.”
Paris, January 1957. Yves Saint Laurent has unexpectedly taken over responsibility for the large fashion house of the new deceased Christian Dior. All eyes are on the very young assistants as he presents his first collection to Dior.