5 Great Books You Should Read

Mark Twain says, "The man who doesn't read good books has no advantage over the man who can't read them." In that spirit, here are five great books I've read lately that you should read, too.

1. The Half-Life of Facts: Why Everything We Know Has an Expiration Date 
Samuel Arbesman
Anyone who reads a lot on the Internet knows that facts are second-class citizens to hyperbole, rumor, and flat-out wrongness. But what's more alarming is that so much of what we once thought were scientific facts end up being disproved. Textbooks used to teach that a human cell had 48 chromosomes. More than one-third of all animals once classified as extinct are later rediscovered. Depending on the field, huge numbers of studies once considered "groundbreaking" can't be reproduced in subsequent trials. "Medical knowledge about cirrhosis or hepatitis takes about forty-five years for half of it to be disproven or become out-of-date. This is about twice the half-life of the actual radioisotope samarium-151," Arbesman writes.

This book will change your perspective about nearly everything you read, regardless of the subject.

2. The Quest: Energy, Security, and the Remaking of the Modern World 
Daniel Yergin
Yergin won a Pulitzer Prize for his first book, The Prize. The Quest follows up with what I am convinced is the most detailed-yet-readable summary of how global economies find, secure, and maintain energy ever written. It is an utter tome at more than 800 pages, but you'll hardly notice; it's a thrill to read.

Here are a few things I learned from The Quest:

  • Even though America hasn't built a new nuclear power plant in three decades, nuclear energy output has nearly doubled, as average operating capacity has jumped from 55% in 1980 to 90% today. "That improvement in operating efficiency is so significant in its impact that it can almost be seen as a new source in electric power itself," Yergin writes.
  • "86 percent of oil reserves in the United States are the result not of what is estimated at time of discovery but of the revisions and additions that come with further development." In other words, we don't necessarily need to find more oil. We just need to find new ways to extract more from what we already know we have.
  • "In 2000 shale was just 1 percent of natural gas supply. By 2011 it was 25 percent, and within two decades it could reach 50 percent," Yergin writes.

Most important, I now realize that the appropriate answer to the question, "Why can't we just do [latest overly simplified energy idea]," is usually, "Because that costs a trillion dollars and would only supply a small fraction of what we actually need."

3. Here's the Deal
David Leonhardt
David Leonhardt is one of the most thoughtful and coherent economic writers of our time -- you just might not recognize his name because he doesn't write much anymore. 

Here's the Deal -- a short e-book that will set you back $1.99 -- lays the federal budget bare, exposing exactly what's causing our deficits, what poses the biggest risk to future deficits, and how we might address the nation's growing debt. He doesn't yell or spout ideology. He uses numbers.

"Eventually," Leonhardt writes, "the country will have to confront the deficit we have, rather than the deficit we imagine. The one we imagine is a deficit caused by waste, fraud, abuse, foreign aid, oil-industry subsidies and vague out-of-control spending. The one we have is caused by the world's highest health costs (by far), the world's largest military (by far), a Social Security program built when most people died by age 70 -- and, to pay for it all, the lowest tax rates in decades."

4. The AIG Story 
Hank Greenberg and Lawrence Cunningham
I'm interviewing former AIG (NYSE: AIG  ) chairman and CEO Hank Greenberg in a few weeks. In preparation, I read his new book, a memoir of sorts, co-written with Lawrence Cunningham.

For as much rightful anger and disrespect the letters "AIG" elicit, this book actually changed my view of the insurance giant. It's almost impossible to think about AIG today without mind-looping its failure. To many, the entire history of AIG starts and stops in September 2008, when it was bailed out. But in the decades before the housing bubble, it really was a remarkable company, growing from nothing into one of the world's largest and most efficient insurers, and becoming one of the first financial services firms to have a global footprint. Greenberg, who left the company before it doubled-down on housing, is still hopeful. "It may yet endure as one of the greatest American companies ever," he boldly (albeit biasedly) states.

The 2008 collapse isn't glossed over. Greenberg and Cunningham detail who they blame for the company's downfall. "Eliot Spitzer, an elected public prosecutor in New York, sparked the process that would drive AIG to near destruction," they write. Don't pretend you don't want to hear the rest of that story.

5. Family Fortunes: How to Build Family Wealth and Hold on to It for 100 Years
Bill Bonner
Bill Bonner is rich. He's also a good writer. The two combine for a book that is as entertaining as it is informative.

Thousands of books offer advice on how to become rich (most preposterously). Bonner begins from the point of view of a family that is already rich. He provides advice -- from experience -- on how to stay rich.

You yourself don't have to be rich to learn from the book. It's full of pithy wisdom applicable to mere mortals. For example:

  • "If there is one thing that marks families with money over the long term it is this: delayed gratification."
  • "As John D. Rockefeller put it, the way to success is 1) get to work early, 2) stay late, 3) strike oil."
  • "You can have money by accident. You can have a family by accident. But you can't have family money by accident."
  • "We don't want to beat the market. We just don't want to get beaten by it."

Have any of recommendations of your own? Share them below.

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Read/Post Comments (13) | Recommend This Article (72)

Comments from our Foolish Readers

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  • Report this Comment On February 26, 2013, at 6:33 PM, xetn wrote:

    Another list:

    "What Has Government Done To Our Money" Murray N. Rothbard

    "Man, Economy & State" Murrary N. Rothbard

    "Human Action" Ludwig von Mises

    "Democracy - The God That Failed" Hans-Hermann Hoppe

    All available at mises.org/literature for free!

  • Report this Comment On February 26, 2013, at 8:31 PM, Tomohawk52 wrote:

    "The 2008 collapse isn't glossed over. Greenberg and Cunningham detail who they blame for the company's downfall. "Eliot Spitzer, an elected public prosecutor in New York, sparked the process that would drive AIG to near destruction," they write. Don't pretend you don't want to hear the rest of that story."

    Isn't capitalism creative destruction? Seems to me that modern politics is big on the creation part but doesn't want to allow the destruction part.

  • Report this Comment On February 26, 2013, at 8:54 PM, mawmaw5 wrote:

    An additional suggestion

    "Economics in One Lesson"

    by Henry Hazlitt

  • Report this Comment On February 27, 2013, at 7:46 AM, alsantos03 wrote:

    I highly recommend- Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill) by David Cay Johnston.

    Learned quite a bit about tax breaks we mortals aren't privy to.

  • Report this Comment On February 27, 2013, at 9:14 AM, cholero wrote:

    Looking forward to the Greenberg Interview, Morgan. Will you ask him about the AIG employee pension fund that he controlled at CV Starr? I'm sure he has a good explanation, but there were quite a few former AIG employees that felt cheated when the Starr Companies were able to go from essentially a holding company with no real operations to an actual insurance company using capital that was supposed to be for AIG pensioners.

  • Report this Comment On February 27, 2013, at 11:55 AM, mdk0611 wrote:

    Actually, you named the book in your article; The Prize by Daniel Yergin. Among the things I learned was that both Eisenhower and LBJ considered establishing a strategic oil reserve (both after Middle East conflicts) but were talked out of by aides. Imagine how different 1973 would have been if there had been a 200 million barrel reserve to draw on that would have cost less than 5 billion 2013 dollars to establish.

  • Report this Comment On February 27, 2013, at 2:48 PM, lewellen180 wrote:

    Re the first title ...

    Admittedly without having read the book, anyone familiar with the scientific method already knows about this, and why it happens.

    In brief: humans are imperfect observers. We make mistakes, we're biased ... and even if we didn't and weren't, we still don't have perfect equipment and an infinite sample space to work from.

    So, as our experiments and observations are repeated, our measurement instruments and techniques are refined, and we learn more. That means we will need to update our assumptions, hypotheses and theories. That's life in the lab. That's also life in the real world, if you think about it ... at least for people who are bright enough to change their opinions as the facts change. (Thank you JMK.)

    And that's the point - we admit we can't know it all, and that our goal is really to increase our understanding over time. Although it's nice when it happens, we almost never get it (whatever "it" is) completely right the first time around.

    It's very hard for humans to say "I was wrong" and so there's a perception that because researchers keep updating and replacing the knowledge base, there's something amiss. There's not - this is how research is supposed to work. Some people find it unsettling, but this is the reason you can get better medical care now than you could half a century ago, and why we have iPods with Stitcher and Pandora instead of vacuum-tube radios.

  • Report this Comment On March 01, 2013, at 8:30 PM, Rexius77 wrote:

    'The Richest Man in Babylon' by George S. Clason.

    A classic written in 1926 - 144 pages of great, simple financial ideas such as 'pay yourself first', 'compound interest', etc. Wish I had read it when I was 18. Still today with 700+ reviews on Amazon, giving it 4.5 gold stars. Excellent investment in time to read this.

  • Report this Comment On March 01, 2013, at 11:58 PM, LaCarv6315 wrote:

    mdk0611 wrote: "...Imagine how different 1973 would have been if there had been a 200 million barrel reserve to draw on that would have cost less than 5 billion 2013 dollars to establish..."

    Such a reserve did exist and was not used until the mid to late 70s. See the following:

    http://en.wikipedia.org/wiki/Elk_Hills_Oil_Field

    and

    http://www.oxy.com/OurBusinesses/OilAndGas/UnitedStates/Page...

    The one oil-producing region of Central California is said to produce approximately 1% of the world's oil supply. See: http://www.sjvgeology.org/oil/bakersfield.html

    Think if we'd not had that reserve...

  • Report this Comment On March 06, 2013, at 5:06 PM, Sunny7039 wrote:

    Readers of this website may have already read 13 Bankers by Simon Johnson and James Kwak, but I wish everyone would.

    Johnson is probably the best, most knowledgeable, and most honest of the major economists to write about the crisis. This is also one of the few trustworthy accounts of why the risk is not behind us.

    I've found other books to be interesting, but either not as well informed, or too partisan, or both.

  • Report this Comment On March 09, 2013, at 7:04 PM, neocolonialist wrote:

    "Here's the Deal" by David Leonhardt -- REALLY??

    I love this quote:

    "He doesn't yell or spout ideology. He uses numbers."

    Bullsh#t. This guy is either a bureau chief or former bureau chief at the New York Times one of the most biased organizations on the planet.

    What really bothers me more than an objective investing site putting this kind of tripe up for review over and over is the fact that I am helping to pay for it.

    Please please stop the liberal nonsense Motely Fool. It is so unbecoming a fine organization such as yours, and quite offensive to those of us who are supporting it.

  • Report this Comment On March 11, 2013, at 9:33 AM, BusBeez wrote:

    I read the list...The The AIG Story really caught my interest..thanks.

  • Report this Comment On March 12, 2013, at 8:47 PM, fooljtv wrote:

    From a historical perspective, I would add "Who Stole the American Dream" by Pulitzer-prize winning journalist Hedrick Smith. How enlightening a presentation of the historical events, and those who vested interests that precipitated them, that have caused the erosion of the middle-class in America. This is a real eye-opener, well-researched and an easy read!

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