I am Pilgrim

This is my review of I am Pilgrim by Terry Hayes. This is an excellent book and I highly recommended it. My wife also thinks it’s excellent and she’s the one who recommended it to me. We don’t have the same taste of books, so it’s a surprise, or a rare event I would say, that we both appreciate the same book. If you are looking for some summer reading, you won’t be disappointed with this book.

If you read the back of the dust jacket, you might think that the book is all over the place and it’s not for you. And in a sense, it is all over the place. But it was done on purpose. Usually that’s a recipe for disaster, except in this case. All the crazy events eventually ties up. The story takes you a on a wild ride. There’s two part to the story, which is the reason behind why this is a big book. The book combines both a murder mystery and a terrorist plot to unleash a cataclysm on America. The book takes into a series of strange events. The main character, “Pilgrim”, is a great character. He’s smart and insightful.

There’s a sequel to the book coming out next year, The Year of the Locust, which is coming out sometime next year. I also read some stuff about a movie studio picking the rights to the book/character. So this should be interesting but I don’t know how this story will hold up on the big screen. However Hollywood did make an excellent movie about a baseball stat book, Michael Lewis’ Moneyball. So I’m sure they can figure out something. Terry Hayes is a Hollywood guy and his background is in movie scripts, so maybe he can work his magic. And congrats to Mr. Hayes on his first novel. It must be very different from going to movie scripts to a very long novel.

A Negotiation Win

Here’s an interesting quote from Sam Zell’s book, Am I Being Too Subtle? Straight Talk From a Business Rebel:

My definition of a “win” is not binary. It is not a zero-sum game. Negotiation that leads to a winner and a loser rarely leads to a successful transaction or another one down the road. That’s how it’s been  throughout my business career. Sometimes my team argues with me-they can’t believe we’re leaving money on the table. But I want to create an environment where everyone wants to keep playing. (p. 220)

Zell knew that by making other side happy early on he could get more deals in the future. Everybody stays in the game and everybody keeps playing. Great mottos for anyone in business or investing.

The Forgotten Highlander

the-forgotten-highlander

I just read the The Forgotten Higlander: An Incredible WWII Story of Survival in the Pacific by Alistair Urquhart. Alistair who has died aged 97, was a prisoner of the Japanese from 1942 to 1945, surviving both the infamous ‘Death Railway‘ and the atom bomb dropped on Nagasaki. The fact that he lived until he was 97 is a miracle. Alistair, as a POW, was constantly beaten, tortured, starved, malnourished, dehydrated, forced labor, and was hit with every tropical diseases you can think of (Malaria, cholera etc…). You can say that Mr. Urquhart hit hell’s equivalent of winning the Powerball jackpot. When you though that life couldn’t get worse, hell decided to step it up a couple notch. But Alistair was “lucky”. He survived (or maybe the ones that died were the lucky ones). But Alistair refused to die. He worked on the infamous ‘Death Railway‘, where thousands of British, Australian, Dutch, American and Canadian prisoners would perish in the task. He was put on a Japanese ‘hellship’ that was torpedoed. His book, The Forgotten Highlander, is his memoir. There’s a documentary on Youtube: The luckiest man in World War ll

The sad thing is that the POWs that returned were treated like absolute shit. The British government had insisted all POWs take a vow of silence, but like most veterans of the WWII he initially did not wish to speak about what he had witnessed. Britain said that they needed Japan has an allied against Russia, so they didn’t want to “offend” Japan.

Recently Japan marked the 70th anniversary of the end of World War II. Prime Minister Shinzo Abe reiterated his country’s “profound grief” for the millions killed – but stopped short of offering any new apologies. He was remorseful for his country’s actions in the war, future Japanese generations should not have to keep apologizing.

PM Shinzo Abe said Japan “did inflict immeasurable damage and suffering” on “innocent people.” But he added, “We must not let our children, grandchildren, and even further generations to come, who have nothing to do with that war, be predestined to apologize.” Full transcript.

Almost every Japanese prime minister since 1945 has apologized in some fashion or another. But these apologies seem to have never been deemed sufficient. Why? To be fair, the Japanese people also suffered greatly during WWII. It’s the only nation that took the full massive devastation of atomic bombs — not one, but two. Unfortunately almost all of those who perished in Hiroshima and Nagasaki were civilians.

Japan has committed some of the most horrendous war crimes. It’s not widely discussed and it’s downplayed. In school you are taught that the Japanese bombed Pearl Harbor and the U.S. dropped the bomb. That’s it. The issue is politically sensitive. I mentioned that the allied needed Japan as an ally after the war. That’s part of it. We are constantly reminded of the atrocities Nazi Germany committed. We can’t forget the horror of the Holocaust. We know about concentration camps, we know about Schindler’s List and Anne Frank. But we never talked about the crimes committed by the Empire of Japan. Japan did attacked the U.S., not Germany. What the Japanese did to the Chinese is on par or worse than that the Nazi did, think Nanjing Massacre. (It’s not just Japan, we don’t talk about Stalin’s brutality the same way we talked about Hitler’s.) Maybe it’s a cultural thing. Much of Nazi victims are Europeans with western culture (including European Jews), and Americans identify better with them compared to Chinese and South-East Asians who became the victims of the Japanese. The Japanese war crimes just wasn’t a Western problem, it was far from our eyes. We see the same attitude today towards massacre in Africa. We treat it as  “just another African problem”.

Japan has turned it around since the end of the war. Today Japan is a pacifist country. It’s sophisticated, developed and rich. Their army only participates in humanitarian missions. I’ve been to Japan. It’s a great country with amazing people that has accomplished so much after WWII.

Edge of Eternity

ken-follett-edge-of-eternityI finally got around writing the review for the last book of this trilogy which I finished last month. Edge of Eternity by Ken Follett is the conclusion to a trilogy that covers the 20th century.  This 1,000 page brick covers the event that followed WWII. So it touches the Cold War, JFK, the Berlin Wall, the Vietnam War, the Civil Right movement, up to the fall of the Berlin Wall.

I’m not sure what there’s to say that hasn’t been covered in the first two posts about book #1: Fall of Giants, here, and Winter of the World, here. If you like history but having a hard time reading the stuff out there, these book provides entertainment and knowledge. You follow a bunch of characters/families throughout the major events that happened last century. The 20th century really shaped the way we live our life today, including two World Wars and a technology revolution (communications, TVs, media, airplanes, transportation/cars, Internet etc…)

My favorite was book #1, the one about WWI and the surrounding events. There was a lot I didn’t know about the first World War. The book did an excellent job explaining the complexity of the events leading up to the war. The second book covers WWII and the surround events. This last book covers a lot, from the 1960s to the fall of the Berlin Wall. That’s a lot of stuff and it doesn’t feel like you are reading a 1,000 page book. These books are excellent and might get even better over the years as the 20th century becomes a distant memory.

Winter of the World

winter-of-the-world
I recently finished Winter of the World: Book Two of the Century Trilogy. It took me longer than the first book of the series and I finally got through this 1,000 pages brick. This is book two of the century trilogy. You can read my review of the first book, Fall of Giants, here. The completed work runs more than a 3,000 pages. The Century Trilogy a set of historical novels spanning all the major events that shaped our modern lives today. The length of the book hasn’t doomed it from becoming a bestseller. This is a major accomplishment in the 140 character world.

The first book focus on the events leading to WWI and the Great War itself. The second book, the one I just finished, deals with the events that led up to WWII, the rise of Hitler, and the aftermath.  This is what it’s on the back cover:

Winter of the World follows its five interrelated families—American, German, Russian, English, and Welsh—through a time of enormous social, political, and economic turmoil, beginning with the rise of the Third Reich, through the great dramas of World War II, and into the beginning of the long Cold War.

This is a solid follow up.  Like the first book, it’s a mixture of fictional characters and real events. There are also real characters such as leaders of countries and historically significant people. Ken Follett is known for his deep research and it shows. But I think I liked the first book of the trilogy better so far. My wife, which has read all three books of the series, liked the second one her favorite. Maybe I liked the first better since I learned a lot more. Nevertheless, this is a great story. There’s a lot of drama and historical information. It’s amazing how Follett manage to connect everything together. If you start reading you will get suck it and will consume you for days or weeks.

One fact that people seem to not know is that the German people have voted to put Hitler in power. Why would they do that you might ask? This requires its own post and is a phenomenon that must be studied and remembered so that kind of event doesn’t repeat itself. The short answer is that Germany was going through some brutal times in the 1920s, and the social and economic conditions in place at the time planted the seeds for Adolf Hitler to rise.

If there’s one thing about the book that bugged me, is that there are too many romantic relationships. But I guess most people like that and the series wouldn’t be so popular without it. It’s just not my thing. But the romantic relationships are important since you need the next generation for the next book. Another thing: This is a book on World War II and there’s not much on Japan. Except for Pearl Harbor and the atomic bombing, Japan is pretty much left out. Japan is in the book since you can’t ignore it but it’s overlooked. I feel that’s the general feeling when people think of WWII, it’s very Eurocentric even though it’s a “world” war. We are remembered of the genocide in Europe but we never talk about what the Japanese did to the Chinese.

I’m looking forward to finishing this trilogy with the third volume of the series, Edge of Eternity. You can read an excerpt of the third book edge_of_eternity_chapter1. If you want to learn more about history but you find it boring, this series is a great way to learn more in an entertaining way.

Behind Every Great Man

failure-is-not-an-optionNASA Flight Director Gene Kranz wrote,

“Behind every great man is a woman – and behind her is the plumber, the electrician, the Maytag repairman, and one or more sick kids. And the car needs to go into the shop.”

From: Failure Is Not an Option: Mission Control From Mercury to Apollo 13 and Beyond by Gene Kranz.

 

Veil: The Secret Wars of the CIA

VeilI just finished Veil: The Secret Wars of the CIA, 1981-1987 by Bob Woodward. I respect Bob Woodward. I think he’s one of the best investigative journalist out there. His body of work is impressive and he has been working for the Washington Post since 1971. Woodward with Carl Bernstein did much of the  news reporting on the Watergate scandal that led to numerous government investigations and the eventual resignation of President Richard Nixon. You can read about the Watergate scandal in All the President’s Men by Woodward and Bernstein.

Why did I read this book? It wasn’t on my list of things to read and I felt like I needed something “light” for the summer. I also have this box of spy books that was given to me that I want to get through. Well this book is anything but light. It’s a very detailed well researched book. It’s a good book but I think you need to be a little crazy to put yourself through it. You must love history and lots of tiny details about everything. It’s insane the level of research Woodward puts himself through. Using hundreds of inside sources and secret documents, Woodward has pieced together an unparalleled account of the CIA, its Director, and the United States government.

As the title suggest, it’s a book about the CIA during President Reagan’s years.  The book covers the the directorship of William J. Casey from 1981-1987. The 70s was a tough time for the CIA. The agency was plagued with scandals and the massive intelligence failure of Iran. The CIA failed to foresaw the overthrow of the Shah who was supported by the U.S. This also resulted in the Iran hostage crisis. When Reagan/Casey took over, morale was low and the agency was a mess. Casey was an Office of Strategic Services (OSS) veteran— the predecessor to the CIA. He wanted to reform the CIA and he wanted the agency to get its respect back. Casey saw himself as an old OSS operator and had a sentimental about intelligence work.

The book is mostly about the covert wars that the U.S. conducted during the Reagan years. The U.S. was afraid of another Vietnam disaster so it was very careful on how it conducted its foreign policy. The book is 50% Nicaragua, 25% Libya, and the rest is Iran and other countries. Somehow, the Soviet-Union and Cuba is tied in all of this. One thing I didn’t realized is how insane Muammar Gaddafi was. I knew he was a bad guy but he definitely had some loose screws in his head. He supported terrorism activity and several violent organization. His personal behavior and personality fueled was not one of a reasonable man or leader. Nobody liked the guy and he was very unpredictable. The U.S. bombed Libya in 1986 but never got Gaddafi out of power. Nicaragua was the main topic of the book. The leftist Sandinista overthrew the Somoza dynasty in 1979. The U.S. didn’t want a model leftist state to exist so he backed the Contras. The CIA was afraid that the revolutionary fires could sweep north, especially to Mexico were the social conditions for breeding socialism was in place.

There’s a lot to debate on what is the role of the CIA? Is it just a intelligence gathering agency for the President or does it take a more hand-off approach with operations? The CIA did intelligence, but is it supposed to kill people also? During Casey’s tenure, the CIA to directly and covertly influence the internal and foreign affairs of countries relevant to American policy. It acted as a shadow secretary of state. With money, secrets, and direct access to the President you have a lot of power. Under Casey, the CIA had become a tool bent on forcing its view on the world.

It’s possible that the CIA’s influence was too great. The CIA apparatus had been used as a policy-planning service for Casey and finally  it had become an implementing agency through its own operations or through the White House. This is how you got the Iran-Contra affair scandal. The whole thing is huge complicated mess. The U.S. selling arms to their arch enemy Iran (a couple years after the hostage crisis) and funneling the profits to the Contras. The details of that scandal is beyond this post. Six people were charged but were later pardon by President Bush.  One of them, Olivier North, became a on-air personality for Fox News.

If you really wanted to know what’s was going on behind the scene during the Reagan administration, this book will fulfill that request. The Reagan administration displayed a certain image in public, an image that people are still attached too today. However the behind the scene stuff is the exact opposite of that image the administration cultivated. I understand why. There are so many factors and people involved in the decision making process that it’s an absolute mess. Good book but not your relaxing summer reading.

Common Stocks and Uncommon Profits

Common Stocks and Uncommon Profits by Phil FisherI reread the classic Common Stocks and Uncommon Profits by Philip A. Fisher. The original edition was published in 1958 and is still as relevant today. The book is ranked up there among the best investment book of all-time. It’s worth picking up once in a while to reread certain sections. I have the updated edition, which includes the perspectives of the author’s son Ken Fisher, a respected investment guru in his own right. You can find some of Ken’s writing at Forbes and books at Amazon.

It’s not a big book but you can’t slam it. There’s a lot of material to digest, although pretty straightforward. Phil Fisher well-known for having a major influence on Warren Buffett’s investment style. Buffett went from Graham’s “cigar butt” approach (dirt cheap companies with one more puff in them) to pay up for quality and hold it forever. Warren Buffett once said his investment philosophy was 85% Ben Graham, 15% Phil Fisher. Today if you look at Buffett’s past investments I think he’s more Phil Fisher than Graham. Fisher was all about companies that could grow, grow and grow. Phil Fisher’s strategy was to buy well-managed, high-quality growth companies, which he held for the long term.  This is not a message to go out and buy growth at any cost. His philosophy calls for making a relatively small number of investments but only in unusually promising companies. He’s looking for signs of growth potential in the companies he’s studying. The book provides a fifteen points guide on what to look for in buying a common stock. Fisher is also an advocate of the scuttlebutt method.  The scuttlebutt method is when researching for investments you need to go beyond the annual report and talk management, employees, former employees, customers, supplier, the competition and more. It’s a lot of work but that’s one way of finding outstanding investments opportunities. The book also provides a list of “what not to do” such as don’t invest in a promotional company instead of “what to do”. If you can avoid pitfalls and mistakes you are already ahead of the game. Remember that the key is no to lose any money.

I won’t go into details about the book since there’s plenty of resources available online. However I will provide this golden nugget of knowledge, which I think summarizes the book: “What are you doing that your competitions aren’t doing yet?” This question is a home-run to me. It’s a powerful question. The company or individual that’s always asking itself that question never becomes complacent.

 

Viking Raid

Viking RaidViking Raid: A Robert Fairchild Novel by Matthew McCleery is the 2nd book of his that I read. You can read the review of his excellent first book, The Shipping Man, here. I almost read the whole book while waiting for a connection flight. While the book builds off the first one, I found the 2nd one different. The first book was a home-run so I looked forward to reading this one. Unfortunately, like many sequels, Viking Raid didn’t meet my expectation. After setting the bar the high, Mr. McCleery found himself a victim of his success. The same thing happens with sequels of successful movies or albums. Very often it’s a tough act to follow. The first book was mainly about shipping. It was a crash course in shipping that combined finance and adventure. The best way to learn is when you are having fun and The Shipping Man did that. I expected Viking Raid to be somewhat similar but it wasn’t. I highlighted parts that I like in the first book. Parts that I could go back to later on as a reference. I didn’t highlight anything in the 2nd book. The idea of writing a book about a dry topic like finance and making it interesting is an achievement on its own. So credit to McCleery for taking on this difficult endeavour. There should be an award to each finance author that writes a finance book that doesn’t make you fall asleep. Viking Raid is categorized as a shipping book, but its mostly about the business of financing ships. Both books are about getting financing for the ships. Like I mentioned, the sequel is different. This latest book is more about Robert Fairchild, the main character, being sent around the world to accomplish a mission.

My favorite thing about the book are the epigraphs at the beginning of each chapter. It’s a short paragraph at the beginning of each chapter which either provides biographical information or about a selected shipowner or features relating to the shipping industry. That’s where I got most of my learning. The shipping industry is not an industry like the others and that’s what makes it unique.

At the beginning of the book there’s something there’s a table called the The Viking Law. I’m not sure when it was written or if its really from a viking era. It’s probably one of the earliest form of “management” if there was such a thing as the word management back in the viking era. I was able to find a reproduction online and there it is below:

The Viking Law
Source: Pinterest

I recommended you read Viking Raid while travelling, especially when you think you travel itinerary is a rough one because Robert Fairchild has a torturous travelling schedule. It will definitely relieve some of your pain.

The Kyeema Spirit. One of the largest oil tanker in the world. It looks like the ship on the cover of Viking Raid.
One of the largest oil tanker in the world. It looks like the ship on the cover of Viking Raid.

Dream Big

Dream BigDream Big by Cristiane Correa is a quick easy 200-something pages book to read. If you want to know more about the Brazilian trio behind 3G Capital that bought American icons Budweiser, Burger King, and Heinz, this is your book. The mostly focus on beginning and rise of Jorge Paulo Lemann, Marcel Telles and Beto Sicupira. Jim Collins, the author of Good to Great, provides the foreword.

Dream Big is the story of three Brazilians that’s taking over the world. This is not a how-to guide. You are not going to be a management guru after reading this book. You will learn some stuff but you will have to look else where for a practical program and advice. Sure, you will read a little bit about zero-based budgeting but it’s not going to tell you how implement it. There are other books for that.  Nevertheless, it’s a fascinating story.

In Brazil, Jorge Paulo Lemann, Marcel Telles and Beto Sicupira were well known for their success with Garantia, a Brazilian investment bank. Outside Brazil, notably in America, they were practically unheard of until they put their hands on Anheuser-Busch with its trademark brand Budweiser. Then they bought Burger King and Heinz not too long after. Three giant America icons now in the hands of some Brazilians investors. You can also add Kraft and Tim Hortons to the list. They took the corporate and financial world by storm. As you can imagine, a lot of questions were raised. How did this happened? Who are these guys? What’s going on? Who are they invading next? Why is Warren Buffett partnering up with these guys? The true is that these guys have been working at their craft for a really long time before they started swallowing American giants. The book walks you through the purchase of Anheuser-Busch.

What’s the secret to their success? There’s no secret or magic formula. Their method is  a simple, straightforward business approach. They didn’t reinvent the wheel. They took the best management concepts and applied them. They preach one thing: Meritocracy. It’s all about performance. Status, credentials, age is irrelevant. Look for good people, train them, keep them, and reward the best. They have this 20-70-10 rule they got from Jack Welch’s GE. Make it rain on the top 20% of your employees. These are your money makers. Considerable rewards, in cash, equity, promotion, are available to those who hit tough targets at company, unit and individual level. The other 70% are good employees, so you maintain them. The bottom 10% are fired. This is similar to the 80-20 rule, where 20% of your employees are responsible for 80% of your results.

“Costs are like fingernails. You have to cut them constantly” – Beto Sicupira

One way to look at the future of recently acquired Kraft, is to see how the previous deals played out. You can’t bring up 3G Capital and not talk about job cutting. The first thing that pops into people’s mind if you mention 3G, it’s job losses. 3G doesn’t have a great reputation and I think they don’t care.

The reality is these guys wants to create long-term value. Yes they cut cost, but they also invest where it’s going to be productive. It’s the 2nd part that the media ignore. But it’s also not sexy and not as dramatic as closing a plant. 3G is not the slash-and-burn type. They keep their businesses for really long time. The true harsh reality is that you are not making society better by wasting money and not being efficient. A company that has too many employees and is bloated is not contributing as much as it should to society. 3G streamlines away a company’s inefficiencies and improves it. For example, when they bought Anheuser-Busch, one of the first thing that got eliminated was the board’s fleet of private jets called “Air Bud”. Executive are now flying coach. 5-star hotels also got the scrap. Now its 3-star hotels, sometime having to share a room.  Once they are done they buy another company. We live in this wonderful high-tech world with never ending improving living standard because of focus on productivity and innovation. A small trip to the good old Soviet Union or Cuba will give you a glimpse at the opposite, and everyone has a job.

3G’s companies is popularizing zero-based budgeting, a system where, instead of basing budgets on the previous year’s, managers started at zero every 12 months and had to make a case for why they should get more. These guys are deadly efficient with their money. Managers are handed out this book: How to Double Your Profits in 6 Months or Less (brutal title). The books states that there’s 78 proven ways to cut costs dramatically. I haven’t read the book so I don’t know but it seems to work for 3G.

3G Capital’s method and culture is definitely not everyone’s cup of tea and they know it. There’s short-term social cost to their method but in the long-run I believe the benefits outweighs the cost. It remains to be seen what will be their next giant target.