Best books of 2011

As the year draws to a close I thought I'd jot down my favourite reads of 2011.

1. Competition Demystified – Bruce Greenwald and Judd Kahn

As an investor, I'm obsessed with competition. Why some businesses succeed while others fail is tremendously interesting. I'm also dumbstruck by how few managers have a good handle on what drives their businesses. If I could encourage corporate Australia to read one book next year, this would be it. This is the book Michael Porter would have written if he were a value investor. Greenwald and Judd craft a compellingly simple argument that helps investors shut out the noise and focus on what matters. Highly recommended.

2. Living Large: The World of Harold Mitchell – Harold Mitchell

This autobiography of Australian media personality Harold Mitchell is an interesting collection of tales about corporate Australia from a man who seems to know everyone. A easy read for a lazy afternoon after the cricket.

  3. Being Wrong: Adventures in the Margin of Error – Kathryn Schulz

Investing attracts a disproportionate number of confident 'A player' types, who typically don't like being wrong. This is unfortunate, because there's probably no other profession where the best are only right 60%-70% of the time. Being Wrong explores the seduction of certainty and the perverse way our desire to be right corrupts our thinking and decision making abilities.

4. Money of the Mind – James Grant

If there's one flaw in modern university educations it is their lack of focus on history. Finance and business strategy is often taught in a vacuum, causing a dangerous narrowness to creep into our thinking. Money of the Mind documents the history of the US banking system, from the US civil war through to the early 1990s (when it was published). For finance nerds, it is a fascinating read. Grant's prose is engaging and makes a somewhat dry topic thoroughly engaging.

5. Steve Jobs – Walter Isaacson

This book needs no introduction, it's already raced to the top of the New York Times Best Sellers List despite only being released in late October. Isaacson paints Jobs as every bit as passionate, creative and stubborn as I expected him to be. The lengthy tome is well worth wading through.

Plus, here's a few articles I found especially interesting:

I Think of Failures as a Gift – Interview with A.G. Lafley (from HBR April 2011)

Before You Make That Big Decision... – Daniel Kahneman, Dan Lovallo and Olivier Sibony (from HBR June 2011)

Merging Ideas Takes More Than Wishful Thinking: It Takes Intergrative Thinking – Roger Martin and Jennifer Riel (Rotman Winter edition 2011 - see here for more from Roger Martin)

What books did you find most interesting and thought provoking in 2011? Did you read anything that changed the way you think about investing?