Book Review: Investing – The Last Liberal Art by Robert Hagstrom

The title of this book immediately attracted me. Even though I only had a vague idea what the american term Liberal Art really is. The two words on their own are more than enough. I think most introspective people who are into self development etc tend to be fairly liberal. It goes with the territory to some extent. And who doesn’t want to be an artist? I certainly do.

The author divulges that the title wasn’t actually choosen by him, but was the publishers idea after the original title ( Latticework ) failed to sell.

The author argues, heavily inspired by Charlie Munger at Berkshire Hathaway that we need to create a diverse set of mental models to understand how the world around us develops. Gaining such a broad understanding is little emphasized in education and in most lines of work. But to be a consistently good investor it is necessary.

[Short summary of the chapters, with an example model from each]

To give a taste of the book we’ll look at the authors mental model for reading books.

Four questions are proposed that you can ask yourselves as you read.

  1. What is the book about overall?
  2. What does it say in detail?
  3. Is it true?
  4. Why is it important?

You can apply these questions at any of four depth levels:

Overview – is it worth my time?

Look in order at the abstract, table of contents and the index at the back. Check if there’s a summary at the end of the book to read.


Read through the entire book, or chosen parts, quickly. If there’s something that’s hard to grasp, move on.

Analytical Reading

This level of reading is about moving the contents into knowledge you can actively use and talk about by understand the knowledge from the lowest level of abstraction the author presents.

Comparative Reading

At this level of reading you will pick a few different opinions from authorities in the field and see where they have commonalities and differ. And state what you yourself believe to be true.

Myself I will try to spend a bit more time in the analytical reading / comparative reading stages.  At least for a while.

Other models in the book relate to conditions for when groups reach good decisions and scratching the surface of behavioural finance / cognitive biases.

Validation is probably the best description of how I feel about the message of Investing – The Last Liberal Art. For some time I’ve felt slightly conflicted about reading and studying ‘all over the place’. But for investing this seems to be a pretty good plan.

I really enjoyed the diversity of discussions. The bibiliography of the book also had a lot of interesting topics. For me the least well-read area of the book was sociology so I’ve added some new books in that area to the Amazon wish list.

Main drawback of the book is the flipside of the diversity: some of the discussions are very high level. For the areas you’ve already studied the area in some depth you might not find much new.


What non-striving gives you and how to practice

When we strive really hard for something  the mind tends to lock itself into goal-oriented and simplistic thinking. Practicing non-striving (a.k.a non-judgement) gives increased ability to see things in a neutral way. The neutrality of the observer allows the mind to roam more freely and clear thinking to develop.

Judging and labeling people, events, situations (i.e. “good”, “bad”, “funny”) etc has value and helps us navigate in the world. However, this habitual thought pattern can shortcut the mind into not seeing things as they really are.

How to practice non-judgement? It’s super simple – noticy your judging mind. Just be aware that you are viewing a situation through a pair of opposite values (e.g. good/bad) and breathe away the emotional attachment created by this view. Then go ahead and act. The action is likely to be the same as when judging, but it will be much more relaxed and free.

6 attitudes that make you relaxed and flowing

Feelings start with a thought. Like other emotions, this is the case with anxiety. Practicing mindfullness of thought can prove an antidote to anxiety and tight thought patterns.

These six attitudes will help you a long way toward being more mindful. You can practice it in meditation, or any moment in everyday life.

  • Non-striving. Focus on the process of what you are doing. Thinking too much about the product (i.e. future vision) is what makes you become stuck.
  • Letting go. Relax in the flow of change. Plans change, people change, communities change, all is change.
  • Patience. When feeling frustration that you are not there – remember that this moment is all you ever have.
  • Beginner’s mind. Be curious about the moment, even when it’s similar to a previous one. This opens many opportunities for love.
  • Acceptance. Working from what is.  Seeing reality, rather than what you wish reality would look like, will free up a lot of stuck energy.
  • Trust. If you truly have faith you are not worrying about the future – you plan for the future, anticipate risks and rewards, and then go back to the now.

A great book on mindfullness is Jon Kabat-Zinn’s Mindfulness for Beginners: Reclaiming the Present Moment–and Your Life.

How to quiet your thoughts

Racing thoughts are a sign that your brain is working at maximum capacity. Your brain might not have gotten as much rest as it needs, and is stretching for a solution that will let it, and the rest of you, to a calmer, happier situation.  This is also called cognitive overload.

Signs that you would benefit from actively quieting your thoughts include:

  • Frequent tension headaches.
  • Difficulty falling asleep, insomnia.
  • Tremors and tics.
  • Irritability.
  • Sensitivity to light and sound.

The good news is that there are many proven methods to induce relaxation and a calm state of mind:

  • Reduce stimulant intake. Caffeine is the drug of our times. Especially for ambitious knowledge workers, who is a main risk group for racing thoughts. Caffeine gives you a short term boost, but is a stressor for the stomach as well as the mind.
  • Be in your body. Do something you love with conscious awareness. This can be as simple as taking a walk.
  • Practice entering a flow state. This is not really an activity as such, but the flow state is a useful concept to know about. Mihaly Csikszentmihalyi refers to the flow state as the source of happiness. A flow state occurs when you do something which is complex enough to absorb the attention of the senses, yet at the same time without high demands that make the brain try to escape into another situation.
  • Routines, routines, routines. The military in all civilizations has got this down, at least since roman times, forcing their recruits into strong discipline. Routines create safety and relaxation of the mind, which knows what task to accomplish at a high level. Knowing this frees up attention for executing the task with focus (sometimes in the face of strong emotions, even death!).
  • Meditation.  The opinion of this site is that the best book for starting a meditation practice is The Fine Arts of Relaxation, Concentration, and Meditation by Joel and Michelly Levey.
  • Laugh. Allow yourself to have a good laugh every day. And if you feel like a bore without humor (this author has been there), you might even be as silly as to read a book on how to be funny (or watch some Eddy Izzard on youtube).

What do you usually do to relax and calm down? Feel free to comment below.