The subtitle is Austrian Investing in a Distorted World and the author is Mark Spitznagel (2013).
I have had this one sitting around for a little while, having long heard that it is an interesting and unique take on both the Austrian School of Economics and its practical application. And, with that in mind, what I actually took away from the book is that perhaps what I find compelling about the Austrian theory is that there is an obvious transition to a very logical and sound way of investing. At its heart, the Austrian school is all about how market interventions by Central Banks or others that increase the availability of cheap credit lead to distortions that always come back to upend the economy. That is to say, where Keynesians have a view on fiscal and monetary policy to address the bust and hopefully to try and avoid it, invariably the bust comes and the solution usually resembles the initial problem that caused it – suggesting, on some level, a misdiagnosis. In contrast, the Austrians don’t try to paper over the problem, and also offer a compelling tale of why the bust happens. Still, the thing that I never appreciated about the theory, or at least didn’t understand about why I respond so well to it (certainly not until reading this book), is how it marries an economic theory with an investment approach that allows you to profit and still minimize risk. The essence is understanding that good things can take time, and so investing in roundabout production, rather than playing the casino for immediate gratification, is the course. It is about small losses on the way to big wins. A broader depth of field. Ultimately, the Austrians are value investors with an added insight. And who can argue with that.
