Robert Shanahan Blog https://robert-shanahan.com Self Help Guidance Wed, 10 Feb 2021 23:08:42 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.10 I Will Teach You To Be Rich By Ramit Sethi Book Summary https://robert-shanahan.com/i-will-teach-you-to-be-rich-by-ramit-sethi-book-summary/ Wed, 10 Feb 2021 23:05:02 +0000 https://robert-shanahan.com/?p=304 If you are interested in personal finance at all, you have likely heard about Ramit Sethi. He has had his website about becoming rich for a while. He turned his blog posts into a book called I will teach you to be rich. I bought the latest version of the book after reading about [...]

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If you are interested in personal finance at all, you have likely heard about Ramit Sethi. He has had his website about becoming rich for a while. He turned his blog posts into a book called I will teach you to be rich. I bought the latest version of the book after reading about the re-release.

I think it is an essential read for anyone at the beginning of their saving path. I don’t think it is the only personal finance book that you should read because Ramit is very snarky and cynical. He is very good for learning about saving and account specifics. He is not optimistic about your chances of success using your own brain. He believes that if you don’t automate something, then you will likely screw it up.

This book has 9 Chapters

  1. Optimize your credit cards
  2. Beat the banks
  3. get ready to invest
  4. conscious spending
  5. save while sleeping
  6. the myth of financial expertise
  7. Investing isn’t only for rich people
  8. how to maintain and grow your system
  9. a rich life

Some key things covered in this book:

Use schwab as your bank if you can because they have the least amount of fees. Fees are the enemy.

Automate your savings if you can.

Max out your 401(k) contribution.

There are no excuses as to why you can’t save money and earn more.

Ramit offers many scripts to lower your banking fees, credit cards fees and other expenses.

Ramit teaches you how to make more money from your job.

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Fortune’s Formula Book Review & Summary https://robert-shanahan.com/fortunes-formula-book-review-summary/ Fri, 11 Dec 2020 18:28:35 +0000 https://robert-shanahan.com/?p=292 This book is about a bunch of different things. It’s mainly about Ed Thorp and Claude Shannon and that is how I found this book. I’ve read a lot of books that mention Ed Thorp and Claude Shannon. It builds Ed Thorp and Claude Shannon up as two of the best financial geniuses that [...]

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This book is about a bunch of different things. It’s mainly about Ed Thorp and Claude Shannon and that is how I found this book. I’ve read a lot of books that mention Ed Thorp and Claude Shannon. It builds Ed Thorp and Claude Shannon up as two of the best financial geniuses that people have never heard of.

The book title came from the name of a paper that Ed Thorp published.

Ed Thorp is well known for his book about card counting called Beat The Dealer. Many people that take blackjack seriously end up reading this book.

First part of the book is about Ed Thorp and Claude Shannon’s background. I wanted to learn more about Claude Shannon because he is discussed in past books I’ve reviewed such as The Man Who Solved The Market and Life After Google. I went into this book to read more about Claude Shannon, but I ended up learning way more than I thought I would.

Next the book goes into Ed Thorps background in gambling and how Claude Shannon and Ed Thorp got connected. The gambling section discusses methods used by Ed Thorp and then the transitions into the Kelly Criterion. The Kelly Criterion is introduced in the gambling portion of the book.

It’s also about how to maximize wealth primarily through the stock market. This book discusses gambling since this is how most of the people in the book got started in equity trading. Many people get involved in gambling but realize once they get an edge, casinos don’t let them play anymore. We saw this in the book The Man Who Solved The Market. Jim Simons loved gambling as well.

Information Theory

It covers other topics like information theory and the mob’s involvement in markets and gambling.

Information theory is introduced because it deals with the law of large numbers, and you can use the law of large numbers to your advantage. As long as you don’t go broke, then the law of large numbers should eventually start to work in your favor. Most people go 100% into bets at some point and that is the best way to lose all your money.

You have to think of it from this perspective. If you had to bet on something, you have a better chance of making money in the long term if you have a low chance of going to zero. The way you would do this in the stock market is by investing in something like a mutual fund that tracks the most successful companies like the S&P 500. It is highly unlikely that all 500 companies in the S&P500 would go to zero, therefore; it would be hard for your investment to go to zero. In that case, it would be ok for you to put all your money into that fund.

The Kelly Criterion

The most important part of the book is stated as follows:

When faced with a choice of wagers or investments, choose the one with the highest geometric mean of outcomes.

This is the Kelly Criterion.

The Kelly criterion doesn’t apply to certain wagers though. If you are able to replace your money, then you should maximize your arithmetic mean. Arithmetic mean is just the average of numbers. Geometric mean is the mean calculated by multiplying n values of numbers and then taking the nth root which is not a fun and easy calculation.

The primary way to gain wealth according to the book is the kelly criterion. The kelly criterion was developed as a way to measure information. It tells you how to allocate your portfolio. The math in this book gets confusing because there are so many scenarios. There are scenarios where you have insider info like many people in the book. There are also scenarios involving leverage. If you have a strong edge, then you should leverage your position. Ed Thorp actually ended up writing a book about the Kelly Criterion after the publishing of this book. If you want to learn more about the Kelly Criterion, you should most likely just get that book. He also recently wrote a book called A Man For All Markets that is about how he beat wall street and casinos. That’s probably another book to get if you are interested in Ed Thorp.

Essentially my understanding of the Kelly Criterion is you need to assess your past bets and successfulness of those bets. Then you use the formula to understand how much you should place on future bets. These are bets on things that have the potential to go to zero. If you don’t have the potential to go to zero, then you should invest more into that item. That is why index fund investing has become so popular recently.

The remainder of the book goes into other metrics that are important to investing, but the book always comes back to the Kelly Criterion. You can tell that the author believes very deeply in the Kelly Criterion.

The main thing I learned about this book is the math formulas behind the quant traders in today’s market. Though many quant traders no doubt use other formulas, this would be a good start for people to learn how to run a quant fund. You can use the kelly criterion to allocate capital and dig into the other math calculations in this book to learn about the best trades.

Other People & Concepts Mentioned In This Book

H.A. Latane – Choice Among Risky Ventures. Started work in the 1930’s and researched Bernouli. He worked on portfolio theory and came up with the concept that the geometric mean is the best for investors.

Harry Markowitz – worked on mean-variance analysis. Basically that if you spread your risk across a bunch of investments or stocks you will be safer.
D Bernouli – Measurement of Risk

The book also mentions geometric wealth versus logarithmic wealth.

Arithmetic mean – regular mean

Geometric mean – the usual scorecard for wall street. Higher volatility means a lower geometric mean.

Kelly Criterion can tell you which one is better.

This book also discusses Rudy Giuliani and how he started prosecuting RICO cases. Rudy Giuliani is best known for being the Mayor of New York City.

The reason it discusses this is because Thorp got caught up in a RICO case involving a popular bond trader. Ed Thorp had to shut down one of his funds because of this. If he didn’t have to shut down, then the author contends that he would have been one of the most successful traders in history and their would have been a lot more written about him.

How this book is structured. Build up into kelly criterion. Kelly criterion. Expansion of kelly criterion. Alternatives to kelly criterion.

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Captivate By Vanessa Van Edwards Book Summary https://robert-shanahan.com/captivate-by-vanessa-van-edwards-book-summary/ Wed, 14 Oct 2020 19:48:20 +0000 https://robert-shanahan.com/?p=265 Captivate is a book by Vanessa Van Edwards. This book shows you how to be more social. The subtitle is The Science Of Succeeding With People. She structures the book into three parts listed out below. Another cool thing about this book is that there are challenges at the end of each chapter. To [...]

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Captivate is a book by Vanessa Van Edwards. This book shows you how to be more social. The subtitle is The Science Of Succeeding With People.

She structures the book into three parts listed out below. Another cool thing about this book is that there are challenges at the end of each chapter. To get the full challenges make sure to buy the book. I’ve included my notes on the book below.

Part 1 – The First Five Minutes

Chapter 1 – Control (how to win the social game)

Don’t be fake. People hate fake people than any other type of person whether they are talkative, too quiet,etc.

Another way to win the social game is not to say yes to everything. Only say yes to things where you succeed. You need to figure out where you succeed though.

Vanessa also tells people where the most ideal location to interact with people is at a social event. The best location to interact with people is in the middle. It is not near the food or the restroom. It is also good to be close to the host of the event. She provides a picture of this location.

She encourages you to think of a person that you want to get close to so that you can use all the tools in the book to get closer to that person.

Chapter 2 – Capture (how to make a killer first impression)

We decide if we like someone in the first few seconds. This means we decide whether or not we trust someone or believe someone. There was a study that shows people feel the same way about someone in the first few seconds as after a full semester when they polled teachers.

There are 3 levels to this first impression according to Vanessa. They are

Level 1 – Are you friend or foe
Level 2 – Are you a winner or loser
Level 3 – Are you an ally or enemy

When someone meets all these categories, they become your friend, prospects or clients. You can speed this process up by using what Vanessa refers to as a hack. You have to use nonverbal hacks though.

This includes using your hands. You must also use your launch stance. A launch stance is where you

Keep your shoulders down and back
Aim your chest, chin and forehead straight in front of you and slightly up
Keep space between your arms and torso
Make sure you hands are visible

Another hack is to engage people with eye contact. Vanessa provides visuals in the book to help with all this stuff.

Chapter 3 – Spark (how to have dazzling conversations)

Vanessa encourages readers not to use small talk because it is inauthentic. You need to use unique talking points to create pleasurable and memorable conversations.

There are 3 steps to do this

Step 1 – Use Conversation sparkers
Step 2 – Push Hot Buttons
Step 3 – Wake People Up

Step 1

Step 1 is about using conversation sparkers. Conversation sparkers are interesting questions like.

  • Working on any exciting projects recently
  • What was the highlight of your day
  • Working on any personal passion projects
  • Have any vacations coming up?
  • What’s your story
  • What are you up to this weekend
  • What do you do to unwind

If we abandon social scripts and push ourselves to use conversational sparks, we are more likely to enjoy our interactions and remember what was actually said. Being different wakes people up.

Step 2 Push Hot Buttons

Notice something about a person and ask them about it.

Step 3 wake people up

Trial 1 – can you spare change
Trial 2 – Can you spare a quarter
Trial 3 – can you spare 37 cents

Which one of these questions do you think did the best? It was number 3. Again being different wakes people up.

Some more ways to wake people up:

  • Spice up your job title
  • Stop posting food pictures and sunsets on instagram
  • Put a unique quote in your email signature
  • Don’t serve coffee to clients
  • Instead of sending thank you cards – send stickers, lollipops or popcorn

Chapter 4 – Highlight (how to be the most memorable person in the room)

This chapter is about highlighting other people and not yourself. In this chapter she talks about how she took a vow of silence so that she wouldn’t talk about herself.

One skill to work on is being a raver. This means raving about someone else. People love being given positive labels so try it out.

Don’t try to impress people. Let them impress you.

You should try to be an amazing listener. Being an amazing listener isn’t about just listening. It’s also about how you respond to what you hear.

Chapter 5 – Intrigue (how to be ridiculously likable)

This is about the thread theory where you find and follow a thread of similarity with a person to be more socially attractive.

You should look for threads and see what you have in common with a person. This could be a person, context, or interests.

Follow the thread and do the five whys. The five whys is just asking why five times in order to get to the root of the issue.

Lastly, you should do whatever you can to help that person whose thread you are following.

Part 2 – The First Five Hours ( The Following Chapters Are Part of Part 2)

Chapter 6 – Decode (how to uncover hidden emotions)

The decoding chapter. What are we decoding? Microexpressions.

According to Vanessa there are 7 facial tells that everyone uses that can be decoded. This is another chapter with a lot of visuals.

The 7 emotions are

Anger
Contempt
Happiness
Fear
Surprise
Disgust
Sadness

I recommend getting the book to find out more about how each of these is expressed through the face.

Chapter 7 – Solve (how to crack someone’s personality)

There are 5 traits each person has that can tell you about someone’s personality. Everyone falls somewhere on the scale of these traits.

1. Openness – This reflects how you approach new ideas
2. Conscientiousness – How you approach getting things done. This measures self-discipline, organization, and reliability
3. Extroversion – This describes how you approach people.
4. Agreeableness – How you approach cooperation and working with others.
5. Neuroticism – This describes how you approach worry.

This chapter helps you figure out personality traits and teaches you how to see them in a person. There is also a quiz in this chapter to help you see where you land on these traits.

She recommends asking people directly, but I’m not sure this would work in a lot of instances. You should just practice being able to read people for these traits. She provides questions that you can ask so that you can get a fix on a person’s personality traits.

Vanessa states that your first impressions are right 76 percent.

You shouldn’t impose your personality traits on others. Learn other people’s traits and see where you are alike. Focus on those and not your differences.

Chapter 8 – Appreciate (how to get the best from people)

What is your appreciation language.

1. Words of affirmation – people express their care through spoken or written word
2. Gifts – People with this language appreciate small gifts or tokens of appreciation.
3. Physical Touch – People express their care through touch.
4. Acts of Service – People with this love language express their care by doing things for others.
5. Quality Time – People with this love language express their care with time.

Learn other people’s appreciation matrix as well as yours.

Chapter 9 – Value (how to get along with anyone)

Six resources that we all need

1. Love
2. Service
3. Status
4. Money
5. Goods
6. Information

Dr. Uriel G. Foa says that all interactions are transactions. Fill out your matrix with your primary value.

Do you give or take these resources. Learn people’s primary value in order to understand what drives them also learn your primary value.

Part 3 – The First Five Days

This part is how to turn people into partners or friends into best friends.

Chapter 10 – Connect (How to speak so people listen)

This chapter is about how important story telling is. Use the power of stories to connect with people.

How do you tell a great story.

1. Hook – a provocative question, stimulating statement or open-ended idea.
2. Champion a struggle – the best stories have some kind of struggle
3. Utilize provocative words
4. Boomerang – bring the conversation back to the person you are talking to.

Most viral ny times articles offered a story.

Vanessa encourages readers to come up with stories that they can use in different situations and memorize them.

Chapter 11 – Empower (How to lead people)

Before leaders can inspire action, they have to get emotional buy-in.

Share your misson and tie to mutual interests.

FIgure out how to use people’s skills on your team.

Let others take control. Don’t micromanage.

Chapter 12 – Reveal (How to build lasting relationships)

Story about a guy that gets secrets about people’s lives.

Don’t be afraid to be vulnerable and share a secret. You can also ask for favors. This is known as the franklin effect named after Benjamin Franklin.

Asking for advice also helps you figure out someone’s social matrix.

Most of us are the centers of our own world. We don’t know how much our behavior is really noticed by others. Most people don’t notice your weaknesses. Even if they do, vulnerabilities are connection points.

Chapter 13 – Protect (How to deal with difficult people)

This chapter is about how to deal with difficult people.

Prevent good people from becoming difficult. Stop difficult people from becoming impossible.

What makes us be fearful of people. It is called a gremlin. A gremlin is a fear that we portray on others. How does your fear dress up. What do you do when you are fearful. When you become fearful, what you imagine might come true comes true.

For example downers are impossible to please. They have a fear of rejections so they reject everything themselves at first.

Show-offs are fearful of being forgotten, so they constantly seek to prove themselves.

Don’t act from the low road viewpoint all the time. You need to act from the high road and expect better from situations. This will allow you to make better connections and relationships.

Name the emotion that you feel, understand the feeling and move on. Don’t let crazy people manipulate your emotions. Then there is a list of emotions that people feel, and Vanessa describes what those people are seeking. You can’t argue with a feeling, but you can acknowledge it.

When you say no to toxic relationships, you have time for the right ones.

Chapter 14 – Engage (How to turn people on)

Highly social people are more optimistic and upbeat. Try to be like this.

Likeable students in a study liked the most other people. The lesson here is to like more people. This is called the reciprocity effect. Every tool in this book is aimed at the reciprocity effect.

Make people feel like they belong. Oprah does this.

This chapter is mainly a summary of the other chapters and of all the “hacks” in the book.

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Die With Zero By Bill Perkins Book Summary https://robert-shanahan.com/die-with-zero-by-bill-perkins-book-summary/ Mon, 28 Sep 2020 20:50:28 +0000 https://robert-shanahan.com/?p=260 The book Die with Zero is written by the author Bill Perkins. Bill Perkins sounds like the name of a basketball or football coach, but he’s actually a successful commodity trader. He used to trade natural gas. Now I believe he focuses on dying with zero which is what this book is about. I [...]

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The book Die with Zero is written by the author Bill Perkins. Bill Perkins sounds like the name of a basketball or football coach, but he’s actually a successful commodity trader. He used to trade natural gas. Now I believe he focuses on dying with zero which is what this book is about. I first learned about this book on the James Altucher podcast of course. The James Altucher podcast introduces me to many of the books that I read. I didn’t think this book would be relevant to me because I enjoy saving. However, it sounded interesting, so I decided to give it a try. It is actually a really good book, but I’m not sure how many people will actually read it because it is only applicable to a narrow audience.

This book is about exactly what you think it would be about. It’s about dying with zero dollars in your bank account. Is that possible?

This book isn’t for people with little to no money. However, I do think it is a good book for young people to use to plan out there lives. He recommends that young people spend their money when their young and save their money when they get older.

He wasn’t selective about what he spent his money on at first. He just spent it on whatever he wanted. He doesn’t recommend you approach your life this way, but you do need to worry about how you are going to spend your money. Many people focus on standard American retirement. This means save as much money as possible until your retirement. Then when you are retired, you can finally enjoy your money. However, if you wait until retirement, you most likely won’t be able to enjoy all of your money because of physical constraints. Many people believe they are going to live forever or that their body will be young forever. This isn’t true. He makes a good point that people spend less as they get older. You won’t spend as much money in retirement as you do when your young. Many people also save money for end of life healthcare. Is it really worth working a few more years for a few weeks of healthcare costs at the end of your life?

Many people use the excuse that if you spend all of your money, then you are selfish. What about your children. Well he debunks this myth because he says that you should give your money to your children now if you care about them. This doesn’t mean that you have to actually hand the money to them, but instead you can set up a trust in their name so that they can use it during their lifetime versus at your death. The optimal time to give to your children is 26 to 35. However most people die when their children are older, so they don’t end up getting money to their children when it would matter most.

Why should you die with zero?

He also talks about the work of Bronnie Ware who writes about the 5 regrets of dying. The 2 most relevant regrets he says are people regret that they worked too much during their lifetime. People wish they could have that time back. The other is that people wished they had the courage to live a life that was true to themselves. They wished that they didn’t live a life that others expected of them. He uses those to encourage people not to spend their whole lives working. At some point you need to enjoy your life. If you enjoy your work, then you should still find ways to spend your money. Whether that is giving it to your family or charity. If you do enjoy vacation and travel, then you should travel before you die. You shouldn’t die with tons of money just because you are head down in your work. No one ever regrets not having spent more time in the office. Another example of this is when the author speaks about a study where students were told they only had 30 days left to live. This gave them a sense of impending loss. They were asked to journal everyday during the study. The students that were told that they only had 30 days left to live were happier than students that were not given that same guidance.

What can you do?

You need to save money at some point. When should you do this. The author never really gives a clear answer because it primarily depends on your earnings. You should be reaching peak earnings in your 30’s and 40’s. This is when you should fill up your savings. All that time you still need to balance enjoyment of your life.

Invest in your health earlier in your life. Bill recommends getting as many objective reports about your health as you can early on in your life. For me, I’m not sure if I trust all these companies with my health data, but a lot of people might choose to do this. You shouldn’t put off doctors visits early in your life. Make sure you track your health and stay healthy. Eat healthy, think healthy, etc.

Bill recommends bucketing your life out into 5 year segments and figure out what you want to do in those time periods. You have to realize that most of your most active years will be early in your life. Knowing that your most active years are when you are young, then you should do the majority of your travel during this time period. Bill says that you shouldn’t approach this as a bucket list because it is more precise than a bucket list. The main issue I have with this practice is that it is hard to know what you want to do in life, but you should begin planning now. If you never think about it, then you will just float through life. If you do think about it, then you will begin to think about and notice the things in life that you want to accomplish.

You will next need to figure out your peak net worth. This isn’t a number it is a time in your life. He recommends a calculation to get to that to number. It’s essentially where you have enough money to live off the rest of your life. You have to determine your cost of living and your years left to live. I had some problems with this calculation because you can’t really know inflation. You also can’t predict certain expenses that you might have that deviate from your expectations. I do agree with it in principle though. You have to realize that you will spend less as you get older. For most people the age they achieve this is at 62 because that is when they start getting social security. What many people don’t realize is that a lot of people retire involuntarily because of job loss. It is better to determine your peak net worth so that you don’t have to be surprised by a sudden job loss later in life.

If you have a big dream or goal and it depends on a risk, then you need to pursue that early in your life. This is when you can bounce back from failures. It would be harder to do this later in life because you might have a family or your earning power might be too high to give up. Many of use get comfortable. It’s going to be hard to fight against that comfort later on in life.

There is actually a billionaire that wanted to die with zero, and he recently accomplished his goal. His name is Chuck Feeney and he was the man that started those duty free shops in the airport. He recently spent all his money on various philanthropic ventures. He gave $3.7 billion to education, $870 million went to human rights and social change among other gifts. He finally shut down his philanthropic company because he ran out of money. Chuck did it the right way. He is 89 at the time of this writing, so he did a pretty good job of dying with zero. He should be an inspiration to everyone else.

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Can’t Hurt Me By David Goggins Book Summary & Review https://robert-shanahan.com/cant-hurt-me-by-david-goggins-book-summary-review/ Thu, 17 Sep 2020 19:46:54 +0000 https://robert-shanahan.com/?p=242 David Goggins is the author of Can’t hurt me and wow what a book. I can’t remember where I first heard about David Goggins, but he is one crazy guy. You might know him from Joe Rogan’s podcast and other motivational platforms. He is inspirational because he is an ex navy seal and an [...]

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David Goggins is the author of Can’t hurt me and wow what a book. I can’t remember where I first heard about David Goggins, but he is one crazy guy. You might know him from Joe Rogan’s podcast and other motivational platforms. He is inspirational because he is an ex navy seal and an ultramarathoner.

His main goal is to show human potential. Boy does he show it in this book. He puts excuses like racism and a bad background to the side. He says that no one has excuses. Keep pushing yourself forward and you will achieve your goal. The way to do this is master your mind. He doesn’t really provide a strong psychological basis on how to attack this. He does tell people to do the very tough things that they don’t want to do in order to get mentally tough.

A few other ways he motivates throughout this book:

  • Do you want to reach the end of your life not knowing who you are
  • Are you ok dying today with what you have accomplished
  • He was fat and depressed and lost over 100 lbs to get into the seals
  • He ran a 100 mile race with no training
  • You aren’t guaranteed an easy life, so stop thinking that way
  • The day you are born; you become eligible to die.
  • Stretching is the key to balancing your life and body.
  • There are motivating challenges throughout this book
  • Taking Souls concept
  • Cookie Jar concept
  • Accountability mirror
  • You can’t always count on motivation for you to accomplish your goals. You must work through difficult times.
  • Tells you to be your own hero

General format of the book

The book follows David Goggins throughout his life and focuses on certain areas.

1.It focuses on his bad childhood and teenage years.
2. It then transitions to his navy seal and military career.
3. Then it transitions into his ultramarathoning career.
4. Then is ultimately ends with his pull up record.

They wanted to show how David created the man he is today from his life experiences. I think they did a decent job of that, but they could have provided more insight behind his exact mental model.

My insights

Based on other books I’ve read from self help authors like Tony Robbins, it seems that David Goggins changed his life when he reached his lowest point. Tony Robbins says this is common, but you should work on motivating yourself before you reach that point of pain. Most people wait for the maximum point of pain before they change. If you don’t feel discomfort in your life though you might never change. This is what Goggins speaks about throughout this book.

The main thing that I got out of this book is the limits of human potential. If you pay attention to the mainstream media and other self help others, you think that life should be easy and sugar-coated. It shouldn’t though. Life sucks the most when you are taking it easy. You won’t accomplish all of your goals if you take it easy.

I think the main mechanism that David uses that most other people could use is not letting his mind get an inch on him. Anytime he feels his mind is starting to get comfortable or weak, he goes out and runs with a rucksack or does some pullups. This is a great exercise because our minds are constantly learning from our behavior. If we give in anytime we feel discomfort, our minds will eventually not be able to put up with tough situations. If you teach your mind that you will not reward weakness, then you will be able to endure in tough situations.

Another thing that he says that really stood out to me is when he spoke about being eligible to die the day you are born. This couldn’t be more true. You can die at any moment. It is best to remember this when assessing your life. This doesn’t mean that you should live lavishly. It just means that you shouldn’t take anything for granted. You should be working hard as many minutes of everyday as humanly possible.

Another thing I took away from this book is that staying busy keeps you out of your own head and out of trouble. David Goggins chooses physical activity to get out of his head which I enjoy as well. I think the message he is trying to convey is choose something productive and push yourself in that area. Most people just comfort themselves with things like social media, tv and consuming products. These are all things that we do when we have too much time. We consume more. Consuming more makes you have to earn more. Then we get in this rat race where we chase more money to buy more comfort. However the more “comfort” we buy or consume, the less marginal comfort we get from the next item. A way to avoid this is to work on the things that you want to accomplish. For David Goggins, this was primarily physical challenges. I think for most men this is a good way to calm the mind. However, I think the same thing can be accomplished in creative pursuits.

I also like the concept of working even when you don’t have motivation. According to David, if you work only when you are motivated, you will never accomplish anything. You must learn to push yourself during the tough times. You must also learn to push yourself when you get bored. Don’t be like everybody else. Work when they are sleeping.

I think people should also learn that David doesn’t binge on Netflix or social media. If you want to accomplish more in your life, you must set those things aside. Society has us believe that those things are normal. They aren’t normal if you want to be extraordinary.

How I would go about being like David Goggins. Find something that you enjoy doing and try to take it to the next level. We often think there is a limit on what we can do because we look at others around us. Instead take something you really enjoy that isn’t destructive and take it to the next level. Push through boredom and pain and reach the potential you’ve always thought you had in that field. Don’t meet expectations. Go beyond them. Don’t expect rewards. Just do the work. What David did is he took something he enjoyed and did it to an insane extreme. He took running to the extreme. He took pull ups to the extreme. He enjoyed doing both of these activities. He didn’t enjoy the pain that came with taking it to the extreme, but he used that to create a mind of steel.

The challenges

David provides challenges in each chapter. Some of them are really good and others are vague. Purchase the book to get detailed instructions for all the challenges.

1 – Go through the difficulties and excuses you have in your life. Become aware of what you do wrong.
2 – Use post it notes to achieve your goals
3 – Do something uncomfortable everyday to toughen your mind
4 – Take souls – basically outperform other people in various areas of your life
5 – Visualize your goals
6 – Cookie Jar: create a mental cookie jar of all your best accomplishments and situations that you have overcome
7 – Remove the governor: remove your mental and physical limits over time
8 – Scheduling: schedule out your days to see how much time you waste (this is my favorite challenge)
9 – Be uncommon: stand out among great people. Don’t just challenge yourself against people with low potential
10 – After Action Reports: assess your failures and progress towards your goals

What I didn’t like about the book

The guy who helped write this book and narrated the audiobook wasn’t the best. I think David has huge potential as an author. He can write motivational books and audiobooks. I would like a book solely of him just screaming at me.

First let’s discuss some things I didn’t like about the ghost writer. The writer would go down certain rabbit holes with no payoffs. The writer starts the book with Goggins childhood. He goes down all these gloomy rabbit holes with David’s childhood stories. Don’t get me wrong, a bunch of terrible things happened to David Goggins.

However, the writer would write this huge build ups of something terrible about to happen to David Goggins, and then he’d just move onto the next story. For example, at one point he makes it seem like David Goggin’s dad was going to kill his mother. This doesn’t happen though. David’s mother easily moves away but the author made it seem imminent in the book. This establishes a predictable pattern throughout the book. Any time a story gets very gloomy in David’s life, the end result will actually be positive. Any time a story builds up being really positive, it ends in a bad fashion. This made the book predictable by the end.

Another thing I didn’t like is that David was afraid of a lot of things in this book. He doesn’t talk about if he overcame any of these things. There are just certain things he’s afraid of. The author doesn’t dive deep into these. David speaks so much about making your mind tough, but he makes it seem logical that he’s scared of basic things. One was flying on planes. How can someone so hard be scared of flying on planes. He gives a reason why, but it seems like an oversight that he is afraid of simple things like that.

Too much focus on the machismo side of David Goggins. I would like to have learned more about David’s personal life and the battles he fought there. It seems easier to put on a tough exterior during military exercises or physical feats, but what about personal life. This is how most people will apply mental toughness. It would have been better to understand how David approached his divorces and relationships. Are those things he could work on. Does he give up on relationships because of his focus in other areas. It would have been good to understand this. I don’t think it is good to focus only on being physically tough. Your soul will be empty in other areas. It would be good to know how he approaches other areas of fulfillment in his life. It seems like a major oversight by the writer not to go into more detail in these areas of Goggins life. For the book, it makes sense why he doesn’t cover it. It doesn’t make sense in the audiobook though. They had tons of converstation in the audiobook. He could have easily asked him about how he overcome personal issues.

I wanted to know the exact routines of David Goggins as well. He makes running 100 miles seem easy. What exactly did David Goggins do to motivate himself. This book makes it seem so easy just to strap up your shoes and go for an ultra marathon. I would have liked him to flesh out more of David Goggins mental talk and have him speak about how he overcame individual mental limitations. I would have also liked to know more about his daily routine hour by hour. David goes into this a little bit when he talks about the scheduling, but it just seems insane to me the amount he was able to accomplish. I just don’t think there was much time in the day for him to spend with his family.

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Turning Pro By Steven Pressfield Book Summary https://robert-shanahan.com/turning-pro-by-steven-pressfield-book-summary/ Wed, 16 Sep 2020 01:38:27 +0000 https://robert-shanahan.com/?p=247 Turning Pro is another self help book by Steven Pressfield. If you don’t know steven pressfield, he is the author that wrote the war of art. He is an author who wrote the book The Legend Of Baggar Vance. turning pro He is pretty well known because of his book War of [...]

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Turning Pro is another self help book by Steven Pressfield. If you don’t know steven pressfield, he is the author that wrote the war of art. He is an author who wrote the book The Legend Of Baggar Vance.

turning pro

He is pretty well known because of his book War of Art. If you read that book, you might remember that he mentions turning pro. Why did he choose to name another book about that? He only mentioned turning pro a little in that book. The majority of the war of art was about fighting resistance.

Do you need to get this book if you already read War of Art? No I don’t think you do? It is a short book just like The War of Art is a short book.

Why would someone buy this book? This book is for people that need additional motivation. He doesn’t get super specific of about how to turn yourself pro. He just tells you the characteristics of turning pro. I think we all know the characteristics of a pro, but how do we become pro.

How do we kick all the bad habits. That’s what people really need guidance.

In this book, he provides a list of things that will prevent you from being pro just like he did in war of art. He really focuses on being an addict. When people think of addiction, they often think of alcohol and drugs. Steven mentions these, but these addictions aren’t the only things that you might be addicted to. You might also be addicted to sex or to your phone. He provides guidance on why he thinks this happens, and he tells the audience to cut it out. Quit focusing on sex and your phone. You need to get to work. Any focus on addiction is you experiencing resistance. Don’t give into resistance or you might never realize your true potential. I find this truly interesting since I think society is set up for us to fail. It is set up for us to give into addiction.

Turning pro is about showing up for yourself everyday. It is a book for creatives. If you want to be successful in the creative industry, you must show up to your work just like you had a job. You must clock in and stay at your work all day. This is because you don’t know when inspiration will hit.

He calls inspiration “the muse.” He provides ways for you to appease this muse such as saying a prayer to the muse or just showing up everyday. He gets a little weird with the muse stuff, but I understand what he means.

Always have something in the box

He also discusses an improvisation term called “the box.” In improvisation you should always think that there is something in “the box” such as an apple or a ball. In improv you can’t be on stage and go blank which is what most improv actors are afraid of. You have to trust that something is always in the box. Steven suggest that creative people believe the same thing. If you go pro, then trust that there will always be something there for you to pull from.

Why should you do any of what he says or try to achieve your dreams? You should do this for your audience. The audience out there that needs to see or read the art you put out into the world. Do us all a favor and turn pro so that we can be your audience.

Shadow Careers

Shadow Careers are basically anything that you pursue that is not related to your true calling. This is essentially your day job for many people. People pursue shadow careers when they are too terrified to pursue their true calling.

Life Before Turning Pro and After Turning Pro

Steven tells the audience that there is life before turning pro and after turning pro.

Turning pro will change who you hang out with and how you spend your time. No one is coming to save you. You have only you. This pursuit will be solitary. Quit looking to others. Many people don’t turn pro because of the solitude and introspection required.

In order to turn pro, you have to face your fears everyday. You must act in the face of fear.

Turning pro is a decision that we must recommit to everyday. Turning pro will change the way you spend your time. You won’t spend time drinking or at tons of sporting events or family events. You will focus more on your art and getting it into the world. You still have to make time for all those things, but you won’t default to those activities when you have spare time or when you should be working.

He also mentions not identifying with your instrument. Many people won’t work on their creative pursuit because they are perfectionists and identify with your work. Don’t do this. Get your work out into the world and move onto the next project.

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Get The Life You Want By Richard Bandler Book Summary https://robert-shanahan.com/get-the-life-you-want-by-richard-bandler-book-summary/ Sun, 13 Sep 2020 19:36:59 +0000 https://robert-shanahan.com/?p=245 This book isn’t a traditional self-help book. It provides guidance on what to do in certain situations. Since it is written in that format, I’m only going to be providing an overview of the book below. Each chapter has general guidance on what to do to achieve the desired outcome. Then he provides nice [...]

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This book isn’t a traditional self-help book. It provides guidance on what to do in certain situations. Since it is written in that format, I’m only going to be providing an overview of the book below.

Each chapter has general guidance on what to do to achieve the desired outcome. Then he provides nice numbered summaries at the end of each chapter.

Introduction – this book is designed to help you avoid therapy.

Part One – Getting To Know your own brain – taking your mental inventory

Chapter one – the power of your unconscious: the freeway to change

Chapter 2 – the qualities of your thoughts: understanding submobdalities- People will often say things like that they are frustrated. It’s important to understand where the person is housing that feeling in their body. Our feelings move through our body and we can change how they move The pictures in our heads are certain size and characteristic. We also hear internal sounds. How do your feelings spin inside of your body? There different types of submodalities – Visual, Kinesthetic, Auditory, Olfactory, Gustatory.

Kinesthetic include: location in the body, tactile sensations, temperature, pulse rate, breathing rate, pressure, weight, intensity, movement
Olfactory/gustatory: sweet, sour, bitter, aroma, fragrance
Visual: number of images, moving/still, size, shape, color/black and white, focused/unfocused, bright/dim, locaiton in space, bordered/borderless, flat/3d, associated/disasscociated, close/distant
Auditory: volume, pitch, timbre, tempo, tonality, duration, rhythm, direction of voice, harmony,

Chapter 3 – Running your own brain: changing your neurochemistry – most problems are created by our brains therefore they are imaginary. Our solutions only have to be imaginary. Think of a time you felt good and step inside of that.

Chapter 4 – Building the new beliefs: the structure of uncertainty

Chapter 5 – Timelines: How you mentally code time – In time vs through time – The past and future don’t exist except in our minds. My timeline is in time. Through time is to the sides. In time is forwards and backwards.

Part 2 – Getting over it

Now that you have mapped out your brain, you need to change it.

Chapter 6 – Getting over bad suggestions

Chapter 7 – Getting over fears and phobias — Anxiety is build up of bad stories and images in your mind.Paying attention to your fears just makes them bigger. Over the years he eliminated fears and phobias for many people. When our fears become to big and grandiose and too generalized, we become afraid of the wrong things. One thing you should never be a afraid of is your own thoughts.

Chapter 8 – Getting over bad memories

Chapter 9 – Getting over grief

Chapter 10 – Getting over bad relationships

Chapter 11 – Getting over bad decisions

Part 3 – Getting Through It

Chapter 12 – Getting Through Compulsions & Bad Habits

Chapter 13 – Getting Through Physical Recovery

Chapter 14 – Getting Through Resignation

Chapter 15 – Getting Through Big Events

Chapter 16 – Getting Through Tests – don’t only think of the bad things that could happen to you because then they are more likely to happen.

Chapter 17 – Getting Through Obligations – this includes things like christmas work parties, etc.

Part 4 – Getting To It

Chapter 18 – Getting To Fun

Chapter 19 – Getting To Love – Focus on when you are going to focus on your family. If you are going to worry about work, then schedule time of when you are allowed to worry about work. Plan your day out. You can practice falling more in love with your loved one too.

Chapter 20 – Getting To Meet People

Chapter 21 – Getting To Important Duties (Taxes and Study)— people don’t put off procrastinating so you could be doing something that you need to do right now instead of procrastinating. If you love doing certain activities, it is possible to make it so that you love doing any activity.

Chapter 22 – Getting To Exercise – a lot of people want to exercise, but they just don’t get around to it. Why is that? You need to build a propulsion system so that the less you do something the worse it feels and the more you do something, the better it feels. People often don’t do things until they feel bad. You should do them sooner. People do this by building good habits. The more you make them a struggle, the more they will be a struggle.

Chapter 23 – Getting To Be More Organized – everybody wants to be more organized. You have to set aside time to do your organizing. Controlling chaos means after first creating more chaos and going through your stuff.

Chapter 24 – Getting To Make More Money – Everyone wants to make more money. Even the richest people in the world. He says that he believes that everyone should have a business on the side especially with the internet these days.

Chapter 25 – Getting To Make Big Decisions – when making big plans that will have repercussions for years. Take it a step at a time.

Conclusion

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The War Of Art Book Summary https://robert-shanahan.com/the-war-of-art-book-summary/ Tue, 11 Aug 2020 23:16:10 +0000 https://robert-shanahan.com/?p=238 The war of art is an excellent book by Steven Pressfield. I wanted to read this book because I’ve heard many people talk about it. For example, I’ve heard Joe Rogan and James Altucher reference it in several podcasts. Steven Pressfield is best known for writing the book The Legend Of Bagger Vance. [...]

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The war of art is an excellent book by Steven Pressfield. I wanted to read this book because I’ve heard many people talk about it. For example, I’ve heard Joe Rogan and James Altucher reference it in several podcasts. Steven Pressfield is best known for writing the book The Legend Of Bagger Vance.

the war of art

The book is about what it takes to be a professional creative. It’s not about how to be more creative but instead about how to create the work environment so that creativity comes to you. Steven really stresses that this material is to help people become full time creatives.

He says many times in the book that the sitting down part of creating is the hardest part. It is not actually the creating part. He is specifically speaking about writing but this can be for many reasons.

There are 3 parts to this book.

Part one – The book of resistance

Part two – Combating resistance

Part three – beyond resistance

Part One – the book of resistance

The first part of the book is about outlining what resistance is about.

The main thing that I got out of this book was that we all have something that opposed our creativity called resistance. Resistance is what it sounds like. It is any force that resists you putting out your best creativity. It could be sex, video games, online shopping, etc. Anything that is for short term gain is resistance.

He also goes into the common characteristics of resistance. That part wasn’t as valuable to me. What you basically need to know is that resistance is pervasive in your life and does everything it can to make sure that you can’t do creative work.

Then he goes into some symptoms of resistance. The symptoms are essentially the common activities that you will be doing if you are encountering resistance in your life.

Sex – Many people use sex as a means to hold off from their creative work. This one is pretty obvious since people want to feel good. This is just another way to feel good along with other things like eating foods that are “bad” for you.

Procrastination – This is when you tell yourself that you will eventually do something. There is no time like the present.

Trouble – Many people get in trouble so that they don’t have to do their creative work.

Self-medication – do you use food, drugs or medication as a diversion from your feelings or creative work?

Fundamentalism – He goes on a mini rant about religion during this fundamentalism symptom discussion. He compares creativity to fundamentalist religion. I’m not sure I got his whole point there. I thought he was trying to say creativity is the opposite of religion, but then he references the importance of religion later in the book.

Fear – people often don’t do their creative work out of fear. However this could be positive because your fear could be a sign that you are on the right path. It’s often hard to do what you want to do. This could be the type of fear that you have.

Healing – This is another good one. People often feel like they can’t get started on their path until they are healed. If this were true, many of us would never start on the right path for ourselves.

Part two – Combating resistance

In order to combat resistance, you must go at your creativity like it’s a full time job. What do you do when you have a full time job. You show up early in the morning and you stay on the job until the end of the day. You do this no matter what day it is. You can’t just give up on your job any day because you will get fired. You should approach your creative work in the same manner.

You should also do you work out of love. The more you love your creative endeavor, the more you should pursue it for the evolution of your soul.

You should not purse your passion solely for money.

Pressfield goes into some characteristics of a professional:

Patient – The professional is patient. In order to be a professional, you must be patient. You can’t expect to be famous and get results today. One of the coolest things that Pressfield said is that we are only entitled to our labor and not the fruits of our labor. This means that you can’t look at every piece of work that you do and expect to have huge results.

Seeks order – you should have your work life and your house in order. He says that the creatives muses seek order in the world, so you should seek to have your house and life in order. In listening to other books, you should do this to discipline yourself and challenge your mental toughness.

Does not take success/failure personally – This goes along with distancing yourself from your work product. Whether or not you become a success should not dictate your creative pursuits. You should pursue what is important to you.

Self Validates – Pressfield says that a professional self validates which I agree with. In order to be successful at anything in life we need to validate ourselves. This means that we have to tell ourselves that we are worth it. We are worth putting in the creative work. Stop procrastinating and focusing on others.

Asks for help when needed – A professional shoudn’t think they can do everything themselves. This is consistent with other self help books. We all need mentors and peers to help us out, and we can’t be afraid to ask for help.

Book Three – Beyond Resistance

Another thing that is cool about this book is Pressfield going into Jungian psychology. I’m interested in Jungian psychology because of Carl Jung’s shadow work. However, Pressfield references Jung’s work on the ego and self. He says that the egoic self is when we are only looking out for ourselves. The self operates on a higher plane. It is where we can access creativity.

He also goes into focusing on assessing yourself hierarchically or territorially. If you look at yourself hierarchically, then you are basically comparing yourself to others. Many of us fall into this trap because we are competitive. You shouldn’t do this. You should focus on your territory. Your territory is something you are good at and can’t live without. I’m not sure if I agree with this because I think there are many creatives that could live without their vocation. He said a good way to assess this is ask yourself what would you do on your last day alive or would you do this activity if it was your last day on earth. I don’t think every artist would necessarily do their art on their last day on earth.

Conclusion

Avoid resistance and go to work on your creativity. Don’t focus on outcomes of your work and just focus on the work. Don’t identify yourself with your work. Your work is your work – it isn’t your life.

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Chaos Book Review & Summary https://robert-shanahan.com/chaos-book-review-summary/ Fri, 29 May 2020 18:42:18 +0000 https://robert-shanahan.com/?p=236 Chaos is a book written by Tom O’Neill. I first heard about this book on the Joe Rogan podcast. chaos book summary It’s not really self help, but we can definitely learn some things about self help and human condition form the book. The book starts out with providing the murder scene [...]

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Chaos is a book written by Tom O’Neill. I first heard about this book on the Joe Rogan podcast.

chaos book summary

It’s not really self help, but we can definitely learn some things about self help and human condition form the book.

The book starts out with providing the murder scene at the house where Sharon Tate and Roman Polanski lived.

It then goes on to provide accounts of all the players in the investigation of the crime. He focuses a lot of time on the book Helter Skelter which was written by the prosecutor Vincent Bugliosi. Vincent Bugliosi basically ran with this narrative that Manson was trying to start a race riot based on some lyrics from a Beatles’ song.

However the Bugliosi himself says that he didn’t believe that Manson believed this himself.

Tom tries to present different reasons that the murders might have occurred

Manson was mad at Terry Melcher. Therefore he killed the current tenants of the Melcher house to send a message.

Manson was part of a CIA mind control program that wanted to create mindless killing robots.

Manson was part of an FBI program to disrupt the hippie movement.

The murders were part of a drug deal gone bad. There was a lot of partying and drugs at the Tate house. A drug dealer was staying at the house at the time, so maybe the murders were part of that. A lot of the people in the house were tied to the mob as well. Maybe it was just an organized crime hit. The Manson family could have just been used to perform the hit. Maybe they were getting paid.

I love conspiracy theories and this book is filled with them. I am fascinated by these stories and so are many people. We want to get distracted by these things and wonder how people can do such things, but I think it just shows how people can do bad things if they let themselves do bad things. There are terrible people like Manson and other characters in this story throughout time.

I think the author tried to show how their was one single effort pushing all of the events in this book. What he ended up showing is that everyone’s lives are impacted by many things. We are impacted by our friends, families, society, our desires and our habits. There isn’t one single that pushes to become who we become but a large amalgamation of influences on our personalities. We are all connected and can have an impact on society. It’s important to have a positive influence on society even if it is a small positive influence. To think we can prevent all negative outcomes in society is not possible though and history shows us that.

Lessons to be learned from this book

You better have a plan for your life or someone else will. If you are just looking for someone or something to tell you what to do, then you might not like the outcome. Charles Manson was very convincing to a lot of people. There were a lot of liberal people back then that didn’t judge behavior apparently, and they ended up falling in with the wrong folks. Ultimately they were expected to commit crimes and kill people. Take control of your life and don’t leave it in other people’s hands.

People with bad parents have the odds stacked against them. Charles Manson came from a terrible background. His mom was a teenager when she had him, and she was an addict. This appears to have shaped his life. He was a criminal from early on. I’ve read a lot of books on the impact that parents have on their children. If you have a tough background, then you need to make sure to deal with that before it ruins your life.

Learn about psychology and hypnotherapy. It seems like hypnosis was used on a lot of characters in this story. The CIA mind control story was all about psychology and psychiatry. The CIA used LSD to help them reprogram people’s brains. It is believed that they destroyed a person’s sense of identity so that they were uninhibited when committing crimes. It is good to become familiar with these techniques so that you don’t have your mind controlled by someone else. Scott Adams has a lot of books about this.

Be careful who you hang around with. I’m sure the people that got caught up in these murders regret getting caught up in them. If you hang out with toxic people, it can have toxic results.

Government needs strict oversight. We see it in today’s news, and we think it is a novel problem. It isn’t though. Power corrupts many people. We need stricter oversight around officials that we don’t elect. We see it with the CIA and FBI. They were involved in many corrupt activities and destroyed documents that would have allowed us to understand the corrupt acts that they committed. This also proves my other point that you need values for yourself. If not, you might end up committing corrupt acts that you didn’t intend. The CIA and FBI used college kids to carry out many of their studies. You can have an impact on the world just by directing yourself in a positive direction.

Try to limit the amount of big decisions you make on short term gains and big promises. It seems like the people that did the worst stuff in this story made decisions based on short sightedness. They wanted to feel good in the moment so they went along with a cult leader that promised them the world, or they did the bidding of a nefarious government agent. They did it for the glory of the moment. In retrospect, some of the people in the story did terrible things and it ruined their lives. Try not to make decisions only for the moment. Consider how it might impact the rest of your life.

Key Questions From The Book

Did Charles Manson consciously control his followers or was he part of a government plan?

Did the Family commit the murders? They were so loaded up on drugs it is hard to believe any of them. Could somebody else have committed these murders and blamed the family.

What role did the mob have in the murders?

Was Abigail Folger targeted since she was an heiress to a large fortune?

Was the family part of a government training program to learn more about LSD?

What role did Roman Polanski play in the murders? Did he have his wife and friends murdered? Is Roman Polanski part of a cult?

Did Terry Melcher know the murders were going to happen?

Did the beach boys know about other murders?

How many people did the family murder?

Was Bugliosi a puppet for the government?

Did the CIA kill Kennedy?

Did Jolly West meet with Jack Ruby before he killed Oswald? Did Jolly West induce Jack Ruby’s insanity?

What is on the Tex Watson confession tapes?

Why won’t people in Hollywood talk about this time period?

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More Money Than God Book Summary & Review https://robert-shanahan.com/more-money-than-god-book-summary-review/ Wed, 27 May 2020 00:04:57 +0000 https://robert-shanahan.com/?p=230 The reason that I wanted to read More Money Than God is because I heard about it from Tim Ferriss. As you’ve probably realized by now, I’m also obsessed with finance and financial independence. I’m also interested in economics and how society works around economics. I feel like many people don’t know about this [...]

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The reason that I wanted to read More Money Than God is because I heard about it from Tim Ferriss. As you’ve probably realized by now, I’m also obsessed with finance and financial independence. I’m also interested in economics and how society works around economics.

I feel like many people don’t know about this book. I would recommend it to anyone in business school or going to school for finance. As you’ll read in this book, many of these hedge funds are shaping the way society works. They are also independent from the government, so they can act against or upon the government in certain situations. Institutions like banks can’t do this as easily. It’s also good to know how our banks are run and can be impacted by hedge funds.

It took me a while to get the gist of how this book was being written. It is a long book. The author writes about different hedge fund managers starting with A.W. Jones and then moves onto Michael Steinhardt and George Soros. Everyone after that is shown to be influenced by these hedge fund managers. Paul Tudor Jones and Julian Robertson are also a central figures throughout this book.

Some of the people and their funds in this book:

  • Julian Robertson – Tiger
  • George Soros – Quantum Fund
  • Stanley Druckenmiller – Quantum Fund and Duquesne Capital
  • Paul Tudor Jones – Tudor Investment Corporation
  • Jim Chanos – Kynikos Associates.
  • D.E. Shaw
  • Ken Griffin – Citadel
  • Mike Mendelson – AQR
  • Michael Litt – Frontpoint Partners
  • John Paulson – Paulson & Company
  • Kyle Bass – Hayman Capital
  • Nicholas M. Maounis – Amaranth Advisors

Should You Read This Book?

This books is great for anyone thinking about going into finance as a career. Maybe you just want to understand how are financial markets work. Either way this book is great to see how financial markets work and how interconnected our systems are.

It also opens up your eyes into how much power hedge funds have and are going to have on our lives in the future.

Should Hedge Funds Be Regulated

A central theme in this book is whether or not hedge funds should be regulated. Many hedge funds have failed over the years. However it is the author’s content that many have failed and didn’t shock the market. However, this can change in the future depending on how big hedge funds get and how much they leverage.

Hedge funds also change what they trade. The more exotic trades they get into the more impact they can have on the economy if their counterparties don’t understand the trade.

Psychology In Trading

By most measures, people that start hedge funds are seen as some of the most successful people. However, many of the people get to the top of the world and implode. Why is this? They don’t see their blindspots and think that markets are predictable. They don’t understand human nature and that humans can change very quickly and overreact. Humans also think similar so thinking that you are smarter than everyone doesn’t typically work in the markets. Eventually people get wind of what you are doing and copy your trades.

It is important to have some humility in the hedge fund world and reassess your philosophies frequently. You should also have confidence. You should assess your risk and leverage on a frequent basis. Leverage is what creates asset bubbles.

Big Trades

Druckenmiller and Soros shorting the Pound Sterling in 1992 making them over $1 billion.

Druckenmiller and Soros shorting the Thai Bhat.

Deleveraging of 1994 hurt a lot of hedge funds. Resulted from Greenspan raising interest rates.

John Paulson betting against subprime mortgages.

Dotcom bubble made Julian Robertson and Stanley Druckenmiller retire.

What I’m Reading Because Of This Book

I’m going to read a couple of books after this book.

I’m going to learn more about the Federal Reserve. It is apparent after reading this book that central banks around the world shape our economy. They are also easily influenced by outside forces. I want to understand more about this system. I also think it is the government institutions that we don’t elect that do the most harm to our system. There is no one to hold them accountable. They are the most liable to be impacted by industry.

I’m going to read the Greatest Trade Ever by Gregory Zuckerman. I’ve already read his book about Jim Simons, but I want to read his book about John Paulson as well.

Chapter Notes

The Top Cat

The top cat chapter is about Julian Robertson. He founded the Tiger fund. His strategy was to find companies that were about to be taken over and trade them. He ran his hedge fund like a special forces unit. The book doesn’t speak so much about Jones as it does his followers. By 2008 there were 6 disciples from the Tiger fund with their own funds.

Rock and Roll

This Chapter is about Paul Tudor Jones. He started Tudor Investment Corporation in 1983.

Tudor Jones was well known for mentally picturing what the market might do on any given day. This way he was prepared for whatever might happen. He predicted the 1987 crash and sold futures and bought bonds ahead of time.

He also predicted the fall in Japanese markets in 1990 because they required their fund managers to return 8% a year. When the market went down, they fled to bonds. Jones predicted this and traded it by shorting Japanese stocks.

Paul Tudor Jones is featured many other times in the rest of this book.

White Wednesday

This chapter is about Stanley Druckenmiller. Druckenmiller was George Soros’ protege. He grew the assets in Quantum fund. This chapter is about how him and George Soro shorted the Sterling and made over a billion dollars. This is where both of them got a ton of notoriety.

Hurricane Greenspan

This book is about Fed Chairman Greenspan and his imapct on hedge funds. Greenspans made short term interest rates cheap.

This allowed a lot of hedge funds to borrow short and trade long on bonds. This became a crowded trade. Then Greenspan raised interest rates and this created a ripple throughout the global economy. Druckenmiller lost almost a billion dollars shorting the yen because of Greenspan’s interest rate change. Insurance companies also lost a lot of monye on this trade. They called it Hurricane Greenspan because they lost more money than they did for a catastrophic hurricane.

Steinhardt lost a billion in this crowded trade as well. He lost the most during this time period.

Askin hedge fund failed during this time frame because they tried to find out which mortgages were going to be prepaid first. Well it turns out when interest rates go up, people don’t want to pay off their mortgage. Their fund became obsolete.

Soros V Soros

This chapter is about trades of Soros and Druckenmiller. They bet huge against the Thai currency and made a lot money. They lost a lot of money in Russia and Indonesia though.

Soros lent money to Russia because he wanted to be a global statesman. Russia defaulted on their debt and created a global crisis.

Soros also bet on Indonesia because he believe in them. They lost almost a billion dollars betting on Indonesia.

The Enemy Is Us

This chapter is about Long Term Capital Management. They were founded in 1994. LTCM was focused on bond trading.

They were one of the first hedge funds to calculate the amount of risk in their portfolio. They were highly leveraged. Their models showed that markets tended to have low volatility over the long term and that is what they bet on. Many people heard about how sophisticated they were and copied their trades. When the market turned against them in 1997 they lost 44% of their capital. It took 11 banks to raised $3.625 billion to save LTCM. Their assets were liquidated and distributed to creditors.

A lesson to learn from LTCM is that in order to avoid failure you shouldn’t be leveraged like crazy. You should also not be in all illiquid investments. This makes it hard for you to raise capital.

Hedge Fund Impact on Society

Hedge funds have a huge impact on society today. They are much large than they used to be and can influence the economy. This is evidenced by trades of George Soros and Stanley Druckenmiller. They caused multiple currencies to collapes. They can impact society with their trades and with their influence on political structure. They can also influence it because of their independence and lack of oversight. I didn’t think about how much influence hedge funds had on society before this book. They can multiply their influence with leverage.

If politicians want to change the amount of influence they have, they should not allow them to leverage up more than 2 times capital.

Hedge funds also have a lot of influence on politicians and policy makers. Soros was able to influence the international monetary fund and high level politicians. Hedge funds were also able to influence large banks and Federal Reserve Chairman. It is scary to think that so much power is held in the hands of a few. When you have more money than god, I guess anything is possible though.

The Dot Com Double

This chapter is about the dot come bubble. The tiger fund was about investing in value and not momentum. They lost a lot of investors because of this. They went from managing 21 billion to 9.5 billion in a year. Robertson closed the Tiger fund right before the bubble burst.

Druckenmiller also didn’t believe in the valuations of tech companies, but he bought in anyway. He eventually sold and bought back in again. Then the bubble burst in 2000. After the burst in 2000 Druckenmiller retired from the Quantum fund. He eventually started his own firm after the market went up again.

The Yale Men

This chapter discusses the growth of college endowments in the hedge fund industry. Hedge funds would not be as big as they are without college endowments. Yale was the first college to invest in hedge funds. By 2009, half the money in hedge funds was from institutions.

This chapter is mainly about Tom Steyer and his fund Farallon which was founded in 1985. Yale invested in his fund. Farallon was what is called an event driven fund. Other hedge funds were run on intuition. Event driven funds were run based on events like a merger or a bankruptcy. These events had powerpoints which endowments liked. Steyer was also a financially conservative guy which appealed to Yale. Between 1990 and 1997, Steyer did not have a down year.

The Code Breakers

This chapter is about quant funds. It mainly shows how Jim Simons grew Renaissance Technologies to be the best hedge fund in history.

He was better than other quant funds because he hired cryptographers and voice translation programmers. They were used to sifting through information to unearth coded information.

Other funds hired financial experts.

Premonitions of a Crisis

This chapter is mainly about Citadel and other multistrategy hedge funds. The author highlights what Citadel did by going through the story of another hedge fund, Amaranth. Amaranth put its faith into a young energy trader who got lucky. He made the firm 2 billion on a natural gas trade that went up after Hurrican Katrina and Hurricane Rita. However, the trade turned against them and they lost half their capital. Citadel offered to step in and eventually bought half the company. This highlights how Citadel operated. They would try to buy out other hedge funds once their portfolios were almost worthless.

Riding The Storm

This chapter is my favorite chapter. It highlights a few hedge funds that made money off the financial crisis. The most notable is John Paulson. He bought credit default swaps on subprime mortgages. He netted 1.25 billion in one single trade.

How Could They Do This

This chapter is about the financial crisis. This highlights a little bit about Jim Chanos and his short selling.

This chapter also discusses the collapses of Bear Stearns and Lehman Brothers. The SEC disallowed short selling of financial institutions which put hedge funds in a bind. Shows how random regulation can mess up the markets.

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