The Philosophical Investor

phil·o·soph·i·cal

/filəˈsäfək(ə)l/

adjective

1. relating or devoted to the study of the fundamental nature of knowledge, reality, and existence

2. having or showing a calm attitude toward disappointments or difficulties.

In twenty chapters, Gary Carmell provides an informative, sincere, and at times very touching account of his experiences working in the real estate investment market. Yes, I said touching. One of the first things I noticed when I began reading this book is that he loves and honors his family, appreciates his business partners, and sees his clients as people he needs to protect: not sources of capital. This, along with the unusual title, let me know that this book would be something different. It is not a step-by-step guide to get rich. Carmell never says, “this is how you can get rich…I would know, because I’m rich.” If that is what you are looking for–this is not it. This book is about how an individual can become wealthy in their finances and in their life as a whole, and maintain that wealth through good and bad conditions. The author seems to genuinely want to pass this wisdom on to the reader. Not unlike in his investment strategy, he uses every tool at his disposal to get his points across. He even recommended other books to read on some topics, which I will do.

 

The author uses his experiences and hard earned knowledge to present to the reader, in real time, why he made certain decisions and what influenced him; how he turned wisdom into wealth. In this way, it made me feel that I was getting a real understanding of what it takes to be a successful investor in various market conditions. It entails much more than buy this and short that. While you can try to use indicators to evaluate risk, you cannot predict what sort of chaos might plague your personal life or professional life at all times. Therefore, certain resilience is needed to mitigate bad circumstances. It also helps to have guiding principles to provide a sort of “continuity of operations” after the storm. Carmell has derived his guiding principles from many disciplines. His influences span the gamut from the likes of the following: Joni Mitchell, Shakespeare, Epictetus, George Soros, Warren Buffett, and more.

He illustrates his practical philosopher approach to investing in a unique and impactful way. At times it feels like he his beating me over the head with concepts like Munger Moments (something he got from a deep statement made by Charlie Munger) and the use of variable rate interest loans, but in a way it had to be done. These concepts will stick with me and I’ve already experienced a Munger Moment of my own. This book is filled with lots of actual illustrations: charts, tables, and snippets from newspapers; all data that backs up his claims. And it has a large amount of quotes. A good quote can bring a point home, and there are some very good quotes. I’ve heard, “think outside of the box”, enough for one lifetime, but now I know a new quote that actually makes me consider its principle every now and then:

“Talent hits a target no one can hit. Genius hits a target no one else can see.” -Schopenhauer

This is one of the few books I’ve read that I didn’t regret taking the time to read the introduction. The author really lays some groundwork in it so I suggest you read it. The first half of the book is focused on background of CWS and some financial and geopolitical history. Then, Carmell delves more into the philosophy of the philosophical investor. It is amazing to me that a book under the personal finance and investing category can offer so much in the way of how a person might live a more purposeful life. The first chapter is called Learning to Play the Game, which reminded me of a book by a metaphysician I read once called The Game of Life and How to Play It. That is the only other book I’ve read that has had such an immediate and positive impact on my thinking.

 

There are so many take-aways from this reading: interest rates are likely to stay lower than I ever thought; so fixed rate isn’t the way the truth and the light, there’s more to fiat money than I realized, and the real estate market, like the monetary system in general, can hardly be avoided so I might as well learn a bit more about it. My biggest take-away was that I really ought to prepare. Prepare for the bad and prepare for the good. I can’t learn from or mitigate the bad without preparation, and I can’t fully capitalize on the good without preparation. I would like to maintain my sense of wonder (see Chapter 20). Some of the best Chapters:

 

Chapter 3: “The Power of Partnership”

Chapter 8: “Jacob—One in a Million”

Chapter 13: “Let the Numbers Do the Talking”

Chapter 15: “Know Thyself”

Chapter 16: “Healthy Ecosystems”

Chapter 20: “Wealth and Wonder”

The author says that “shift” happens. Always remember that shift happens …and you will probably be part of the floating few instead of the sinking many.


From : http://beta.tutor2u.net/economics/blog/housing-the-global-economic-crisis
From : http://beta.tutor2u.net/economics/blog/housing-the-global-economic-crisis

I was born in 1987, the year the U.S. Stock Market crashed (Black Monday) and marked the largest Dow Jones one-day percentage decline. It was bad. In fact, this excerpt from a USA Today article written the day after may put it in perspective:

Among those hit hardest:

-Bill Gates, 31, the founder of Microsoft, was the USA’s youngest billionaire last week, with 21 million shares of Microsoft stock. Now, he may be just another multimillionaire. Microsoft fell 19.50 points to $45, dropping his net worth to $945 million.

–Anheuser-Busch Honorary Chairman August Anheuser Busch Jr. was wondering what hit him. The value of his stock in the beer company dropped by $190 million.

–David Packard lost $519 million of his paper fortune as Hewlett-Packard stock plunged 12.13 points to $47.63.

http://www.usatoday.com/story/money/markets/2012/10/19/black-monday-story-replica/1643951/

I came of age during years when America was experiencing some of the lowest poverty rates and unemployment for decades. Bill Clinton was President from the time I was six to the time I turned 14. Then, George W. Bush was President from 2001-2009, during which time the U.S. saw the vile face of terrorism on its own soil.  I could not fathom then, at the age of 14, what an impact the attack would have on my country and my life.

In 2008, I began working for the fledgling U.S. Department of Homeland Security. Fast forward to today: I’ve seen another Stock Market crash (2011), budget crisis shenanigans, debt ceiling crisis, housing market collapse (aka The Death of the American Dream), TARP, and the Great Recession. I can hardly begin to explain to you how head spinning some of these events have been for me in terms of molding and breaking my ideologies. What is success? How does one achieve it, even against all odds? What is the American Dream? Is a college education affordable and worth the investment for anyone or me? Is the American Dream to get married, buy a house in a nice neighborhood, and buy two cars? What is money, just 1s and 0s on a computer? How does money in a retirement fund just disappear?

These are questions that I’ve found can only be answered through some serious research. A great part of what I learned in the past about the U.S. monetary system and policies may as well be called the Miseducation of Michaela Guyton–if I can channel Lauryn Hill. The more I read, the more questions I have. Can democracy be a crisis? Or, is Fareed Zakaria on to something: Is there a New Crisis of Democracy festering? I don’t know, but I will keep reading and watching and asking questions…

I received this book from NetGalley and the publisher in exchange for a fair and honest review. This review is not for pay and is my opinion alone.

Advertisements

One Comment Add yours

  1. Dāsha says:

    What a comprehensive review;you’re such an over-achiever!
    http://windycitywardrobe.com

    Like

Sound off...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s