If I ever meet you in person, don’t be surprised if I ask you, “So what are you reading these days?” Some of my favorite books are the result of these responses. I recently got to ask that question to someone I admire and respect.
As a Quora writer, I’m a huge fan of Peter Lynch. Peter is a gifted Quora writer with a strong financial background. He’s a principal at Hilltop Opportunity Partners, a Texas-based diversified financial services holding company.
There’s another cool thing about Peter and his work. He’s a great financial modeler. He’s the creator of A Simple Model, a website dedicated to financial modeling. He also has a course over at Udemy on financial modeling where nearly 60 thousand students have taken the course. I’m one of those too.
Peter Lynch is a Reader
I’ve connected with Peter a couple times through Quora mail, and he’s always helpful in spite of a heavy workload. I was thankful when he agreed to answer a few questions about books.
How has reading over the years shaped your career?
Peter: I read every day, and I consider it an important part of my job. Investing is all about your capacity to measure risk, and the more information you have, the easier the exercise becomes. I’m not saying it’s ever easy. As Charlie Munger famously quipped: “It’s not supposed to be easy. Anyone who finds it easy is stupid.”
A quote from one of my favorite books describes it well: “The more we remember, the better we are at processing the world. And the better we are at processing the world, the more we can remember about it.” – Moonwalking with Einstein
What are some of the books that have influenced your career the most and how so?
Peter: Irrational Exuberance: It’s one of my favorite books on markets. From the introduction, “this book is really about the behavior of all speculative markets, about human vulnerability to error, and about the instabilities of the capitalist system.” The author, Robert Shiller, debunks myths that you grow up hearing constantly. For example, the idea that purchasing a home is a great investment.
You Can be a Stock Market Genius: Ignore the cheesy title and book cover; I like to think it is part of author Joel Greenblatt’s sense of humor. This book does an incredible job explaining the advantage of the individual over Wall Street professionals, and it does so with simple language.
Financial Shenanigans: When you start your career, you transition from a world in which all of the information provided is assumed accurate, to one where this could not be further from the truth. Financial Shenanigans illustrates how frequently this is true with terrific and simple examples. Consider the explanation for Enron: “Curious investors might have questioned how frequently companies tend to grow their revenue from under $10 billion to over $100 billion in five years. The answer: never.”
Moonwalking with Einstein: Several years ago I started reading about the learning process. Moonwalking with Einstein was the most entertaining narrative I came across that simultaneously illuminates how the mind retains information. I cannot tell you how much I wish I had known the contents of this book prior to college. You can read more comments on this post.
Thinking Fast and Slow: An illuminating text describing how humans are constantly fooled. I think about it constantly when I am evaluating decisions, and I cannot recommend it enough.
When you work with new clients, what books do you recommend?
Peter: Most of the people I speak with are founder-entrepreneurs that have grown ideas into large businesses. They will frequently start meetings with a phrase akin to “I don’t have an MBA or anything, but … [insert brilliant insight].”
I always point out that they know more than I ever will about their industry. They understand how businesses operate better than most MBAs but communicate it using different vocabulary.
So I generally do not recommend a business book. If they are avid readers, I like to suggest highly entertaining non-fiction. The Devil in the White City by Erik Larson is one of my favorites. There is a better chance it will give us something to talk about in the future.
You have created a very cool financial modeling website called ASimpleModel.com. Why aren’t there any books on small business financial modeling?
Peter: It’s difficult to sell expensive books when you tell people the content is simple. 😉
Once again, who is the real Peter Lynch? Not that other dude who ran Fidelity’s Magellan fund years ago.
Peter: I’m a principal at Hilltop Opportunity Partners. Before joining Hilltop, I was a vice president at Argenta Partners, a private equity firm focused on control-only equity investments.
Prior to that, I worked with the M&A team at Rabobank International in New York City, and with JPMorgan in Buenos Aires, Argentina and in Santiago, Chile.
I currently serve as chairman of Fleetwood Transportation Services and as a director of NovaLink, Inc., OTTR Chronic Care Solutions and Stephen Gould Corporation.
As mentioned earlier, I founded ASimpleModel.com in 2013, a website dedicated to making financial modeling instruction simple and affordable.
I earned a B.A. in economics from the University of Pennsylvania.
Title Photo by Nakashi