Books

 

 

Chairman and CEO Nicholas Mitsakos has written two books: “Investment Principles: Strategies for an Irrational World” and “Transformation and Investing: Disruption, Opportunity, and Absurdity.” 

Nicholas Mitsakos

Investment Principles: Strategies for an Irrational World

Transformation and Investing: Disruption, Opportunity, and Absurdity

These books present a broader, more methodical, and disciplined way to think about investing. Investment success requires understanding many dimensions ranging from global economics, industry, competitive and microlevel analysis, technological innovation, game theory, and human behavior and emotions. This integrated approach develops a more informed and distinctive way to think about the current investment environment, the future, and what choices to make.

Investment success combines predicting the future, the confidence to make bold choices, and the fortitude to stay with those choices. Nicholas asserts that wisdom, defined as combining a broad range of observations into a new set of knowledge to predict the future more effectively, is the essential component of successful investing. The foundation of knowledge, assembling relevant facts from many sources, produces better decisions and superior returns.

There is no simple formula. Thoughtful observation of complex factors, understanding their interrelation, and predicting the outcome of their interaction is challenging. In Daniel Kahneman’s words, it requires “slow thinking” and demanding work. Breathless and urgent recommendations from social media quips are usually misguided. Superficial ideas and quick thinking are even worse.

These books do not contain a series of numerical models and algorithms. Those kinds of tools are a simplified sideshow intended to turn numerous and dynamic factors into a simple and, typically, misleading analysis. One obvious example is the current investment principle that revenue growth is the only factor that matters in determining a company’s future value. Along with other simplistic approaches, this is often nonsense.

The books discuss topics ranging from disruptive innovation and technologies, globalization, leadership, fiscal and monetary policy, and other topics usually relegated to economics or behavioral textbooks. But inferior performance comes from not understanding all the elements, both macro and micro, that influence investment choice, the policies impacting those decisions, the competitive environment, and the leadership qualities essential to succeed within this context.

General statements are a waste of time, profoundly inefficient and misleading, and designed simply to make the reader feel good without giving him or her any useful way to think more deeply about analysis and more accurate and impactful conclusions.

These are not “how to pick stocks” books. Along with platitudes, there are no simple formulae, heuristics, or any other effortless way to outperform the market. Deep thinking about the factors that matter is complex, challenging, unique to each situation, and escapes simplicity.

The books are not organized as straightforward narratives, but each contains sections addressing different, sometimes unrelated but important topics. The foundation comes from Nicholas’s articles and lectures (posted elsewhere on this website under “Writing and Podcasts” and Arcadia’s “YouTube” channel) and may seem disjointed, but each topic and subtopic is meant to stand on its own. The books can be just as effectively read in discrete sections and not necessarily in any narrative series. These can be reference books, as well as a descriptive analysis.