How do you shortlist books to read?
I scan reviews and content on subjects of interest like science, business and Investing to generate my shortlist. Many book summary apps are now available which provide concise background and set context of the books which helps reduce the reading list.
The last book you read (which left a deep impact on you)
The Only Three Questions that Count – Investing by Knowing What Others Don't – Ken Fisher
Tell us something about the book.
The book is a simple guide to evaluate and analyse errors in investing. Most errors emanate from factual gaps or behavioural approaches to Investing. The simple 3 point framework is a valuable starting point to look at any decision process and allows for identify recurring errors. Eliminating or reducing these errors is critical to step up investment results, which is every investor’s primary goal.
Three key takeaways from the book
The emphasis of the book is on repeated questioning/evaluation of one’s assumptions, beliefs and perceptions, which might creep into investment decision-making process. Information & perspectives are never completely available or conclusive at the time of decision-making and hence need to be looked at in an unbiased manner with rigour.
The simple framework facilitates the identification of the right questions around investment decisions, enhances the research robustness, and plugs gaps in the framework.
Most of the common errors that arise from behavioural biases can be captured early in the process using the three-question checklist.
Why would you recommend the book to other finance professionals?
Simplicity of the concept and its easy applicability across investing is a big positive of the book. Given that most errors in investing are easy to explain post-facto and difficult to eliminate at the time of implementation, the simple approach mentioned in the book is appealing. This concept has wide applicability outside finance as well which makes it worthwhile.
