Book report: "How We Got Here"
Andy Kessler, one of my favorite financial authors, wrote "Wall Street Meat" and "Running Money". He must be cranking out a big backlog because he's published a book a year since 2003.
"How We Got Here" is one of those collections that makes me wonder where the #$%^ I was during my high-school history classes. I agree that we all need to learn a certain number of names & dates to form a framework of historical context, but this book adds the gossip that makes it all worth reading. There's a big difference between "Eli Whitney invented the cotton gin in 1794" and "The industrial revolution grew out of mankind's desperate need to manufacture cheap underwear that wasn't itchy, and by the way the word 'gin' is a quaint Southern contraction of the word 'engine'."
Kessler invests by these rules:
1. Lower prices drive wealth.
2. Intelligence moves out to the edge of the network.
3. Horizontal beats vertical.
4. Capital sloshes around seeking its highest return.
5. The military drives commerce and vice versa.
Of course people don't agree with that list, so he attempts to explain his rules by showing how they got us from the Middle Ages to the Internet. He starts with Blaise Pascal inventing the adding machine in 1642 to help his dad collect taxes. (Nords' rule #6: Taxes drive investor behavior.) Then Pascal went on to invent probability & statistics.
And Kessler meanders through the centuries, cherry-picking the interesting stories... how Wilkinson's cannon-boring lathe greatly improved Watt's steam engine, how Edison accidentally invented the diode, and how the British scared themselves out of both the stock markets and the computer industry for fear of getting burned. He covers the industrial revolution, the early stock markets, communications & electrical generation, digital computing, and modern capital markets. We all know some of these stories, and I learned a lot more about the computer revolution (the part that happened while I was patrolling the North Atlantic in the mid-80s).
It's a good fast beach read. But I've learned that if you enjoy reading it while you're near your spouse, don't keep saying "Hey, honey, listen to this..."
One of the marketing gimmicks that Andy tried for this book is an electronic format. I downloaded that PDF over 14 months ago and just couldn't bear to read it, but I raced through the analog version. In my opinion it's a miserable failure to expect even a voracious reader to stare at 250 pages of text on a monitor or even a laptop, and I'm still looking for the ultimate clipboard-sized Star Trek reader. And if it has a presbyopic font, so much the better!
The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
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