Sharp insights into human fallibility as a potential source of moneymaking opportunity.

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DEAD COMPANIES WALKING

HOW A HEDGE FUND MANAGER FINDS OPPORTUNITY IN UNEXPECTED PLACES

Hedge fund owner/manager Fearon contrasts the methods of Wall Street experts and gurus, and the self-deception and illusions of many business managers, with his own ability to profit from such vulnerabilities.

The author has ridden the roller coaster of finance and investment since the collapse of the Texas oil patch in the 1980s. Along the way, he became a successful investor by shorting the stock of companies destined to fail, and he founded his own hedge fund in 1991 and continues to run it. Fearon passed through a succession of investing styles as he worked to understand how self-delusions, obsessions and manias obstruct business success. Insights assimilated from his own failures—like the gumbo restaurant he located amid a non-Southern, spicy food–eating demographic, among others—were fuel for his subsequent successes. Number-crunching analysis, writes the author, doesn't function on its own, and he includes stories and incidents derived from thousands of interviews conducted with the leaders of companies to illustrate the methods that have worked for him. The author uses Ron Johnson, who was put in charge of J.C. Penney, as an example. He lost $1 billion eliminating popular coupon programs, replacing discount products with upscale goods and dropping the use of Spanish in states like Texas. Johnson wanted to build a company where he and his friends could shop, but J.C. Penney's customer base refused to go along. During his research, site visits and interviews helped Fearon probe beneath the rationalizations for failure. When managers blame external factors and refuse to consider the possibility of internal problems, it’s another sure sign of trouble. Thus, when earnings are falling or nonexistent and liabilities are increasing, bankruptcy is at hand. The author also discusses successful investments, like International Game Technology which can make more money more quickly than the best shorts.

Sharp insights into human fallibility as a potential source of moneymaking opportunity.

Pub Date: Jan. 6, 2015

ISBN: 978-1137279644

Page Count: 256

Publisher: Palgrave Macmillan

Review Posted Online: Oct. 23, 2014

Kirkus Reviews Issue: Nov. 1, 2014

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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A deftly argued case for a new kind of socialism that, while sure to inspire controversy, bears widespread discussion.

CAPITAL AND IDEOLOGY

A massive investigation of economic history in the service of proposing a political order to overcome inequality.

Readers who like their political manifestoes in manageable sizes, à la Common Sense or The Communist Manifesto, may be overwhelmed by the latest from famed French economist Piketty (Top Incomes in France in the Twentieth Century: Inequality and Redistribution, 1901-1998, 2014, etc.), but it’s a significant work. The author interrogates the principal forms of economic organization over time, from slavery to “non-European trifunctional societies,” Chinese-style communism, and “hypercapitalist” orders, in order to examine relative levels of inequality and its evolution. Each system is founded on an ideology, and “every ideology, no matter how extreme it may seem in its defense of inequality, expresses a certain idea of social justice.” In the present era, at least in the U.S., that idea of social justice would seem to be only that the big ones eat the little ones, the principal justification being that the wealthiest people became rich because they are “the most enterprising, deserving, and useful.” In fact, as Piketty demonstrates, there’s more to inequality than the mere “size of the income gap.” Contrary to hypercapitalist ideology and its defenders, the playing field is not level, the market is not self-regulating, and access is not evenly distributed. Against this, Piketty arrives at a proposed system that, among other things, would redistribute wealth across societies by heavy taxation, especially of inheritances, to create a “participatory socialism” in which power is widely shared and trade across nations is truly free. The word “socialism,” he allows, is a kind of Pandora’s box that can scare people off—and, he further acknowledges, “the Russian and Czech oligarchs who buy athletic teams and newspapers may not be the most savory characters, but the Soviet system was a nightmare and had to go.” Yet so, too, writes the author, is a capitalism that rewards so few at the expense of so many.

A deftly argued case for a new kind of socialism that, while sure to inspire controversy, bears widespread discussion.

Pub Date: March 10, 2020

ISBN: 978-0-674-98082-2

Page Count: 976

Publisher: Belknap/Harvard Univ.

Review Posted Online: Dec. 22, 2019

Kirkus Reviews Issue: Jan. 15, 2020

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