What is the best book you read in 2010?

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We are a bookish bunch around here, and I always like to hear what other people are reading and liking.

So, as 2010 ticks away to its conclusion, I open the floor to answers to this question. I note that it does not have to be something published this year, just the best book you read this year, no matter how old it is. I would rather have you say a few words about the best one, hard as it may be to pick, than just list a bunch of good ones. Discipline, my dears: Choose. Just. One. Then, say why it was so good.

(I had an earlier post saying that Stefan Zweig’s The World of Yesterday may be the best book I have ever read, and I posted it on January 2, 2010. So, maybe that counts. But I started reading it Christmas day, 2009, so I am going to count that one as a 2009 book.)

This year, I have read many good ones. In fact, this year I read some of the best books of my life, focusing on Victorian war memoirs and travel memoirs, and I have mentioned a few here on ChicagoBoyz. But, I will pick just one:

The Story of a Soldier’s Life (1903), by Field Marshal The Rt. Hon. Sir Garnet Joseph Wolseley, 1st Viscount Wolseley, KP, GCB, OM, GCMG, VD, PC.

Volume I

Volume II

Wolseley was the most distinguished British soldier in the later decades of Victoria’s reign. He is a clear, vigorous, honest writer. He is an acute observer, and he makes strong and blunt judgments. He describes the effect of wounds with clinical accuracy. His career beggars belief. In the book he describes fighting against bandits in Burmah, the long hard fight in the Crimea, a shipwreck on the way to China, turned around to fight in India during the Sepoy Rebellion, on to China during the Second Opium War and the destruction of the Summer Palace, observing the Tai Ping army, over to North America to observe the Confederate Army and meet General Lee, up into Canada, through pristine wilderness, to put down Riel’s rebellion, some time at the War Office, then organizing and leading the campaign against one of the many “races of virile savages” on the edges of British power, the Ashantee. Wolseley never got to a volume three, which would have included helping to finish off the Zulus and conquering the Sudan. There are books it is hard to put down. This one was so exciting that I could barely remain seated while I read it. To read it is to live for a while in a very different world, with a hard-edged moral code, with a man who speaks English very clearly, but who thinks and says things that we would not think or say today.

For example, I discussed Wolseley’s views on race to a friend this way:

The idea that “racism” is a unitary phenomenon is seriously wrong. To select a paired set of example. Hitler was a racist. So, in a way, was Garnet Wolseley, a Victorian officer whose memoirs I recently read. But they were “racist” in totally different ways. Hitler was an ideological fanatic, impervious to evidence, hating a “Jew” that mostly existed in his imagination. Wolseley was an extremely practical man who had limited resources with which to conquer and hold vast territories and populations under the potitical control of his government. Hitler made up a fantasy world based on racial myths. Wolseley observed that certain groups had certain characteristics, as a general matter, and he took those facts into account just like terrain, weather, and weaponry and other practical considerations. He did not have the luxury of living in a make-believe world where everyone was exactly the same, or where one group was generically superior. Hitler told himself a self-congratulatory and flattering story about his own group, which led him to make incredibly impractical decisions. Wolseley looked just as hard at his own group, the English, and saw its strengths and weaknesses. He admired and extolled the former, but admitted and tried to work around the latter. He treated these facts about his own people with the same cold practicality that he treated all practical questions. To celebrate “culture” when it suits us or pleases us or flatters us, but to deny its reality and force when it does not, is ultimately dishonest. We need to understand people in the past as they understood themselves, not merely as chess pieces in our current struggles.

Another example is his belief in the moral value of war, as a strengthener and purifier of the nation. Yet another is his unabashed belief that force can and should be used for national greatness and prestige, without any further moral considerations. These are ideas that virtually no one in America or Britain would expound today, certainly not someone who is one of the most influential figures in the government and in the public eye.

Wolseley did not live to see World War I, and the catastrophic losses it caused, and the great disillusionment that followed it. He did expect some great national struggle, perhaps against the Germans, perhaps the Americans, and he expected it to be very hard fought.

To spend several hours in the company of this forthright, unsentimenatal Victorian officer is to understand those times in a way that no amount of third-person history can possibly convey. That is the great value of going back to these memoirs.

Highest possible recommendation.

It Is All Market Timing

When I first started in investing one of the cardinal rules (for the general public) was “don’t try to time the market”. From a practical perspective this meant that you were supposed to continue putting money in the market whether it went up or down and then hold for the long term.

Everyone knew that the market does move in cycles, such as the giant bust at the time of the great depression in the 20’s and the 30’s when stocks crashed, wiping out many investors. Another classic example is the Japanese stock market which peaked in 1989 at around 39,000 before falling to a low of 7000 in 2009, over 80% below its high (today it is around 10,000). Even the most cursory review of the chart shows that if you sold at the peak and / or bought at the trough (this hasn’t worked yet in Japan because the market hasn’t moved back up yet) you’d make a tremendous amount of money; but the popular wisdom is that it was “too hard” for an individual investor to determine when to enter and exit the market so don’t try at all.

To some extent “re-balancing” is a form of market timing, because as stocks rise in value if you practice the model you are supposed to sell off some stocks and buy bonds (or whatever else is in your portfolio, could be commodities or real estate) which accomplishes much of what market timing is supposed to do. Re-balancing is more complex because it involves multiple asset classes which each have their own valuations but you could say that re-balancing is at least a “cousin” of market timing.

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