Monthly Book Reviews
River Road’s investment team members share the books they’re reading.
March 14, 2019
Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors
by Allen C. Benello, Michael van Biema, Tobias E. Carlisle
The authors profile eight diverse investors with concentrated styles and amazing track records. These Hall-of-Fame investors range from professional money managers to math geniuses and industrial executives. The group shares one compelling attribute: an ability to think independently and focus on their 10 to 15 best ideas at any given time.
February 21, 2019
Famed short seller Jim Chanos remarked that China’s economy was on a “treadmill to hell” back in 2010. Celebrated hedge fund investor George Soros warned that “a hard landing is practically unavoidable” two years later. China has kicked the can down the road since then and added $12 trillion worth of debt to its economy since 2008 (roughly the same size as the U.S. banking system), but the day of reckoning has not yet come. The author explains how one-party rule has led to insolvent banks, zombie companies, and ghost cities. Foreign investors in China should proceed with caution as the Chinese economic miracle must eventually contend with its mountain of debt.
January 17, 2019
Astroball: The New Way to Win It All
by Ben Reiter
Human judgment and big data combine to transform the Houston Astros from the worst baseball team in a half century to World Series champs in just three years. There are lessons for the investment industry. The combination of statistical analysis AND human judgment can deliver superior performance versus relying solely on big data (quants) or human judgment alone. Commitment to an evidence-based process in the face of adversity is required to achieve the long-term objectives of an investment management firm or a Major League Baseball team.
December 20, 2018
One Buck at a Time: An Insider’s Account of How Dollar Tree Remade American Retail
by Macon Brock and Earl Swift
Ever wondered how Dollar Tree sells everything for just a dollar? So did the three founders when they opened their first dollar store in 1986. Like a great value investor, co-founder and author Macon Brock searched around the world for ‘off-the-beaten-path’ quality merchandise at incredible prices that would surprise and delight Dollar Tree shoppers. The company has maintained the same $1 price point and the best margins in all of retail more than three decades later.
My Father’s Business: The Small-Town Values That Built Dollar General into a Billion-Dollar Company
by Cal Turner Jr., Rob Simbeck
Written by Cal Turner Jr., the former CEO of Dollar General and the son of its founder, the book tells the amazing story of how the Turner family of Scottsville, KY grew Dollar General from its rural Kentucky roots into a national retailer with a $30 B market value. The experiences of Cal Turner Jr., his father, and grandfather provide many useful lessons in business management as they navigated the company through decades of change in the retail industry.
November 15, 2018
Mastering the Market Cycle: Getting the Odds on Your Side
by Howard Marks
Noted distressed debt investor and author Howard Marks’ investment track record suggests an ability to put the “odds in his favor.” While some on staff hoped for a deeper dive into cycle analysis, Marks chose to keep the material at a high level. Successful investors must recognize how the odds shift as cycles unfold and position portfolios appropriately. Marks urges investors to consider the role of the credit cycle and current valuation levels when determining the “aggressiveness” or “defensiveness” of a portfolio.
October 11, 2018
Bad Blood: Secrets and Lies in a Silicon Valley Startup
by John Carreyrou
The author is the WSJ journalist that exposed the Theranos fraud through unrelenting investigative journalism. Much like Einhorn’s Fooling Some of the People All of the Time regarding Allied Capital, Theranos relied on misleading statements, wildly optimistic projections, and outright fraud to deceive large companies and otherwise smart individuals (e.g. Safeway, Walgreens, Theranos board members and investors). Carreyrou’s investigative work is a testament to the value of thorough research.
June 29, 2018
An enjoyable book in which Wachenheim shares his take on how investors can improve their investment practices.
June 14, 2018
Shoe Dog: A Memoir by the Creator of Nike
by Phil Knight
A popular read among River Road’s investment team, Shoe Dog is a memoir by Nike founder Phil Knight about his earliest days at the company. The book highlights values we emphasize at River Road, including entrepreneurship, building passionate teams with complementary skill sets, and embracing innovation. The book also highlights the role luck plays in any fledgling venture.
Weekly Reading Recommendations
River Road’s investment team members share the articles they’re reading.
March 14, 2019
Value stocks are cheapest versus growth in 14 years (bloomberg.com; tiered subscription)
Entertaining conversation with the former Bond King (ft.com; subscription required)
The family that built an empire of pain (newyorker.com; tiered subscription)
Is it worth it to be a famous fund manager anymore? (awealthofcommonsense.com)
How concentrated should you make your value portfolio? (investorfieldguide.com)
March 7, 2019
The fading American beer industry (bloomberg.com; tiered subscription)
Not caring about having an imperfect portfolio (collaborativefund.com)
An inside look at the Reds’ scouting database (theringer.com)
The Gates annual letter (gatesnotes.com)
February 28, 2019
The final months at Theranos (vanityfair.com)
The compounding wonders of buy-and-hold (forbes.com)
The pros/cons of ESG investing (whitecoatinvestor.com)
February 21, 2019
Beware of recessionary bias among analysts (blogs.uoregon.edu)
The dreaded earnings recession (awealthofcommonsense.com)
Why people still don’t buy groceries online (theatlantic.com)
China’s demographic danger grows (wsj.com; subscription required)
February 14, 2019
Why time horizon works (collaborativefund.com)
Does more information lead to better investment decisions? (behaviouralinvestment.com)
ESG flows continue to set records (morningstar.com; tiered subscription)
Factor investing has failed to live up to its promises (researchaffiliates.com)
The price that makes hedge funds a steal (institutionalinvestor.com)
February 7, 2019
Everything you wanted to know about MMT (themacrotourist.com)
Are “low-volatility” stocks overvalued? (bloomberg.com; tiered subscription)
Legendary investor Rodriguez still thinks the equity market is delusional (thinkadvisor.com)
Was this a dead cat bounce? (theirrelevantinvestor.com)
The Permian is on track to be the world’s #1 oil field within three years (nytimes.com; tiered subscription)
January 31, 2019
Fed considering Trump’s “stop with the 50 B’s” (wsj.com; subscription required)
Munger likes this book (wsj.com; subscription required)
Bill Miller in the wilderness (institutionalinvestor.com; tiered subscription)
Does the U.S. just lick the glass like everyone else? (mebfaber.com)
The worst alternative investments (morningstar.com; tiered subscription)
January 24, 2019
GMO suggests the stock market bubble may be bursting (advisorperspectives.com)
Shiller on bubbles (blogs.cfainstitute.org)
Will these earnings last? (crestmontresearch.com)
Research Affiliates’ winning formula (researchaffiliates.com)
Romick on value investing (mebfaber.com)
January 17, 2019
Shutdowns get bad exponentially (bloomberg.com; tiered subscription)
Bill Miller thinks courage will be rewarded in the year of the pig (millervalue.com)
Hoisington explains how we’ll end up back at zero rates (hoisingtonmgt.com)
20% / year stock-picker wishes his edge would disappear (bloomberg.com; tiered subscription)
2018 marked the first year since 2006 with no bank failures (calculatedriskblog.com)
January 10, 2019
Europe’s largest economy may be slipping into recession (bloomberg.com; tiered subscription)
IRS refunds may take longer this year (wsj.com; subscription required)
How important is sequence of returns risk? (obliviousinvestor.com)
Big landlords are starting to build new entry-level houses (wsj.com; subscription required)
January 3, 2019
Does the yield curve really forecast recession? (research.stlouisfed.org)
A history of bear market bottoms (theirrelevantinvestor.com)
Canada’s Buffett drives his own pickup truck (bloomberg.com; tiered subscription)
How much of the internet is fake? (nymag.com; tiered subscription)
We can see things other people can’t see (barrons.com; subscription required)
River Road is not responsible for the content or availability of linked sites. This does not constitute investment advice offered by River Road. This is provided for information purposes only and does not constitute an offer to buy or sell a security. River Road does not warrant this information to be correct or accurate and expressly disclaims any such warranty. River Road is not responsible for any trading decisions, losses, or other damages that may result from or relate to the information, data, and opinions contained herein or the use thereof. This information may become inaccurate before it is updated.