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.
- What is the book about overall?
- What does it say in detail?
- Is it true?
- 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.
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.
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.