4 Great Books to Read
by Joseph Dancy
LSGI Advisors, Inc.
July 21, 2006
the Markets of Tomorrow
by James P. O'Shaughnessy
272 pages, Portfolio Hardcover; (March 2, 2006)
List: $24.95; $16.27 at Amazon.com
Last month we read the following books that might be of interest:
Finance: Historically the stock market has provided returns of roughly seven percent per year according to James O�Shaughnessy in his new book �Predicting the Markets of Tomorrow� (Portfolio Hardcover (March 2, 2006), 272 pages). O�Shaughnessy studied 79 years of market data and found that the market tends to move in 20 year cycles. The returns an investor actually obtains will vary significantly depending on when they invest.
Over the next two decades investors in larger companies will be disappointed with the market's returns according to the author. He predicts the S&P 500 index will likely only return 3% to 5% per year. On the other hand �small cap stocks, which began a rally in 2000, will continue to do significantly better than large-cap stocks over the next ten to fifteen years.�
After analyzing the historical data O�Shaughnessy concludes that �our most conservative forecast for small stocks over the next twenty years is 7.6% to 9.6% per year � nearly double that of large-cap stocks.� Like previous books he has written, O�Shaughnessy does a masterful job reviewing historical market data, then explaining what the quantitative findings mean for current investors. Easy to read and organized well.
Coal: The Dirty Secret Behind America's Energy Future
by Jeff Goodell
352 pages, Houghton Mifflin (June 8, 2006)
List: $25.95; $16.35 at Amazon.com
Energy: As energy becomes more expensive, and supplies less secure, the U.S. has massive reserves of coal that can be used to meet increasing demand according to Jeff Goodell, author of �Big Coal� (Houghton Mifflin (June 8, 2006), 352 pages) � but not without serious social and environmental consequences.
Around 20 pounds of coal a day are burned on average per U.S. citizen. Total coal use in the U.S. has tripled since 1970 according to Goodell. While many have argued that the U.S. has a massive 250 years or more of mineable coal reserves left to be recovered, Goodell argues the reserve base has been wildly exaggerated and hints we might be nearing peak production � but offers no glimpse of the size of the �true� North American reserve base or sustainable production levels.
Goodell describes the life cycle of coal use from the Western mine to the power plant, with lots of interesting historical antidotes about the power sector included. The description of the mile-long coal trains and the related transportation issues were both quite interesting and quite informative.
Another fascinating part of the book deals with the historical global weather patterns and how they have been ascertained by scientists. Global temperatures have changed dramatically over very short geological periods � and the impact on agriculture and society would be massive if that should occur in modern times. Global warming trends and carbon emission levels were also a focus of his book.
Instead of a balanced view the author takes an advocate�s position against the coal companies and the political structure that supports mining, while painting a positive picture of the workers involved in the extraction and generation processes. Some of his conclusions on global warming and coal corporation objectives may or may not be accurate, but we don't get a balanced view from the author to make a decision for ourselves.
Moral Consequences of Economic Growth
by Benjamin M. Friedman
592 pages, Knopf (October 18, 2005)
List: $35.00; $12.95 at Amazon.com
Economics: What is the relationship between economic growth and democracy? Professor Benjamin Friedman in his book �The Moral Consequences of Economic Growth� (Knopf (October 18, 2005), 592 pages) argues that economic growth and increasing standards of living foster greater opportunity, tolerance, social mobility, diversity, fairness, and morality in a society. The lack of economic growth tends historically to be associated with intolerance and moral decline.
Friedman does an excellent job analyzing the historical patterns of economic growth and decline in the United States and other western countries, and how such growth or decline correlates with social and moral values. While rising incomes don't solve all problems, they help significantly in improving the development of a society.
The book is one of the most compelling arguments that can be made to support the notion that governments should be concerned about promoting economic growth. Friedman notes that growth in the U.S.= has stagnated over the last decade for the middle and lower income worker. A number of issues could slow growth in the U.S. and other developed countries for some time to come according to the author - social security, medical costs, aging populations and the like will put a strain on economic growth and reduce the vitality of many economies.
The book could be interpreted as an argument against �preserving� scarce resources for future generations at the expense of current economic growth, although he does not dwell on this issue at length. Well written, interesting, with plenty of historical examples and a unique view of the tangible and intangible benefits of economic growth.
Than Good: Creating a Life You Can't Wait to Live
by Zig Ziglar
350 pages, Integrity Publishers (April 1, 2006)
List: $21.99; $14.95 at Amazon.com
Motivational: A positive passing mention in a business magazine led us to buy Zig Ziglar�s latest motivational book entitled �Better Than Good� (Integrity Publishers (April 1, 2006), 250 pages). Ziglar is a popular motivational speaker. Third parties have mentioned that Ziglar makes a very effective, entertaining, and motivational presentation, with the crowds absorbing his delivery and message.
Better Than Good is easy to read, and the ideas are set out in an organized manner. Essentially Ziglar recommends a person find activities they have an interest in and are passionate about and pursue them. The interest will keep motivation high, and will inspire a person to persist through all the accompanying failures that will inevitably occur until their personal goals are met.
Some of the personal examples Ziglar uses in the book to illustrate certain behavioral traits could have been more relevant and powerful, although some make for interesting reading. The book might be best received by high school or college students who are developing their career plans and lifelong goals. The message to pursue an activity that is of interest no doubt is of most value at that stage of life, although might be helpful for anyone who has lost their �passion� for life and living.
© 2006 Joseph Dancy
Bio & Archive
Web Note: Also hear Jim Puplava's interview with the author, James O. O'Shaughnessy.