Economic Indicators
With the arrival of autumn, lazy beach days have given way to studious afternoons. We don’t mean only for students — curiosity and a desire for self-improvement are important traits in investors. Consequently, Capital Group investment professionals are always searching for interesting new ideas.
We asked several Capital Group portfolio managers to suggest intriguing and useful books, from old favorites to new captivators. Here are some of their selections.
Deep Work: Rules for Focused Success in a Distracted World
Who doesn’t feel distracted in a world dominated by email, text messages, laptops and smartphones? When she needs to concentrate, Capital Group equity manager Jody Jonsson likes to reread Deep Work, a 2016 book by Georgetown University professor Cal Newport.
“It’s not a new book, but it’s something I enjoy revisiting when I really need to focus on my work, both creatively and thoughtfully,” she says. “So often, we are lost in emails and texts and other interruptions. We can’t get our minds to focus. This book includes a lot of excellent advice for changing your work habits, including how to efficiently interact with your phone. It has really helped me to perform at a higher level.”
Superforecasting: The Art and Science of Prediction
Wouldn’t it be nice to know the future? With that in mind, Capital Group equity manager Jeff Lager chose Superforecasting by Philip Tetlock, a professor at the University of Pennsylvania’s Wharton School. In this 2015 book, Tetlock and co-author Dan Gardner take a deep dive into the skills required to make accurate predictions, following a group of so-called superforecasters.
Telling the future, it turns out, has less to do with a crystal ball than with developing the critical skills of gathering evidence from diverse sources, thinking in terms of probabilities, admitting errors and changing course when necessary.
The Art of Execution: How the World’s Best Investors Get It Wrong and Still Make Millions
Even the best investors make mistakes, and this 2015 book is proof of that. The Art of Execution, written by fund-of-funds manager Lee Freeman-Shor, follows a group of very successful money managers. It turns out that nearly half of the group’s ideas didn’t do well, and the author reaches some interesting conclusions.
The key to overcoming mistakes is how you deal with losing positions in a high-conviction investment portfolio, says Martin Jacobs, a Capital Group equity manager.
“It’s not whether you’re right or wrong that’s important,” Jacobs summarizes from the book. “It’s about how much money you make when you’re right and how much money you lose when you’re wrong. Your decisions around weighting and conviction are paramount.”
Outlive: The Science and Art of Longevity
For his suggestion, Capital Group equity manager Chris Buchbinder went outside the investment box and selected Outlive by Canadian physician Peter Attia. The book, published in March, challenges conventional medical thinking on aging and outlines a new approach to preventing chronic diseases. His advice includes nutritional changes, techniques for better sleep and effective ways to address emotional and mental health.
“He provides a framework for thinking about your health with a risk management mindset,” Buchbinder explains. “I find it fascinating, and I’m probably going to change a few aspects of my own lifestyle in ways that are consistent with the book.”
Playing Big: Practical Wisdom for Women Who Want to Speak Up, Create, and Lead
Cheryl Frank, a Capital Group equity manager, is such a fan of Playing Big that she has given many copies as gifts, even to her male colleagues. The 2014 book, written by columnist and personal coach Tara Mohr, advises women on how to play bigger roles at work and in their personal lives by taking bold action and overcoming self-doubt.
“It’s a terrific book about understanding how to recognize the opportunities in this world and leaning into them in an authentic way,” says Frank. “It’s written for women, but even some of my male colleagues who have read it said it changed the way they think about their own families.”
The Brain That Changes Itself: Stories of Personal Triumph from the Frontiers of Brain Science
Martin Romo’s selection almost sounds like a science fiction novel, but The Brain That Changes Itself is actually a groundbreaking 2007 book about the science of neuroplasticity by psychiatrist Norman Doidge. The author disputes the conventional view that the human brain is immutable and instead argues that the brain can and does transform over time.
“The central premise is that your brain is a muscle and you can build in patterns, imbalances and biases,” says Romo, a Capital Group equity manager. “It’s much more plastic than you would think.”
The book includes amazing stories about people who have overcome paralysis and recovered from strokes; in one case, a woman was born with half a brain that rewired itself to work as a fully intact brain.
“The message I take away from this book is to stay flexible and remain open to new paradigms,” Romo adds. “I think it’s a really important book, and I have incorporated some of the lessons into my own life.”
Economic Indicators
Long-Term Investing