Book review & analysis The Education of a Value Investor

Book review & analysis The Education of a Value Investor by Guy Spier,

The book start out with an interesting analysis of how top educated hardworking people end up working on the edge of legality, pushed by a culture of performance at all price.

It then goes on exploring the many fallacies one must face in school. How students adapt to perform in that closed environment, where everything is black or white. And it explore why that can translate to fatal mistake in the real world where everything tend to be grey.

He follows up with a quite humble tale of his "classic" transformation( from Graham -->Buffet, Munger) and disclose how his father got him started.

Where I think the book gets really interesting is when he starts talking about bias. He doesn't stop at just vomiting Daniel Kahneman or Dan Ariely research such as how we perceive loss, our limited "willpower", the herd mentality or how we usually stick with our first idea. He actually explain how he implemented contermeasure to those bias.

Acknowledging he's not rational he explain how he set up his work environment to minimize bias. Moving away from NYC, forgetting about daily stock price movement, using a standing desk, naping, information reading order, the use of a checklist, taking responsibility for mistakes and surrounding by the right people.

I will delve on the last point as I think it's the most important. First I think our gregarious instinct push us to seek constant reinforcement from our social environment. During period of intense stress such as the last financial crisis like minded people make it easier to stand against your investor and your own mind allowing the opportunity to buy when everyone is fearful. And second, we actually become who we spend time with, I firmly believe in a simple rule of thumb, we're the average of our five closest friend. As Guy explain, choose them wisely.

The last part but not the least is about balance. Don't take it too seriously, enjoy what you do stay in shape and spread love around you. Because the ultimate score for success is love.

It's a well edited and entertaining book with plenty of reference for someone that wants to dive deeper( I appreciate authors who take the time to disclose their library).

Vincent