McCullough: This Is One Of The Better Economics Books You'll Ever Read

by: Hedgeye

Summary

We highly recommend Nobel laureate Herbert Simon’s witty autobiography, Models of My Life.

"[The book] contextualizes where we were in economics back in the 1970s and outlines a better path forward,” says Hedgeye CEO Keith McCullough.

Simon's keen insights influenced myriad disciplines including economics, political science, sociology, psychology and computer science.

Hedgeye CEO Keith McCullough is back with another edition of “Hedgeye's Book Club” to discuss Nobel laureate Herbert Simon’s witty autobiography, Models of My Life. “I’d like to thank Mr. Simon for being not only a revolutionary in this space, but for challenging the status quo,” McCullough says. “That’s a really important component of this book. It contextualizes where we were in economics back in the 1970s and outlines a better path forward.”

Back then, intellectuals were steeped in theory sorely lacking in practical application. Simon, however, was one of those rare scholars. His keen insights influenced myriad disciplines including economics, political science, sociology, psychology and computer science. Investors can learn a lot from Simon’s work solving real-world problems.

As McCullough says:

We’re trying to find ways, as a practical matter, to evolve our process to capitalize on the real world and understand real business concepts and macroeconomic factors to apply them to our process. We don’t want to be wandering on and on in the world of theory, wondering about what should be happening based on someone else’s preconceptions.

“To be good at this, the people that I’ve found to be most useful, at the foundational level of what I do, are the people whose insights cross disciplines,” McCullough says. “They’re not ideological or people that only navigate one domain of the social or natural sciences.”

If all of this isn’t enough to convince you to read it, Models of My Life is also a favorite read of Warren Buffett’s investing partner Charlie Munger.

Want more? Click the links below to watch other installments of “Hedgeye’s Book Club”:

  • Watch McCullough’s review of Benoit Mandelbrot’s book The Misbehavior of Markets, which he calls “the Bible of financial markets.”
  • And our review of Daniel Kahneman’s seminal book, Thinking Fast and Slow, which McCullough calls “the most important book I’ve read on behavioral finance.”

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.