Books Read - Q4 2020

Read six books this quarter for a total of 47 this year. (See Q3, Q2, and Q1 2020 book notes.)

Surprisingly, the pandemic year of 2020 was not a particularly big year for reading. In 2019, we read 48 books and in 2018 we read 113 books.

• The Conquering Tide: War in the Pacific Islands, 1942-1944 (Pacific War Trilogy) (3.5/5) This is the sequel to Pacific Crucible, the first volume of the trilogy by Ian Toll, which we read last quarter. The first volume ended with the Battle of Midway in June 1942. William Randolph Hearst's newspapers did not like the "Europe first" strategy that Roosevelt and Churchill had agreed on, saying that "the war in the Pacific is the World War, the War of Oriental races against Occidental races for domination of the world." This volume picks up the story with the U.S. invasion of Guadalcanal, which is one of the Solomon Islands (northeast of Australia). Afterwards, a major general of the Japanese army said, "Guadalcanal is no longer merely a name of an island in Japanese military history. It is the name of the graveyard of the Japanese army." The Thin Red Line film is about a battle that took place in the fight for Guadalcanal. Birth year determinism: the four admirals (Ghormley, Halsey, Turner, and Fletcher) and the Marine Corps general (Vandegrift) with big roles were all born between 1882 and 1887. The Americans lost ~7k killed out of 60k, 29 ships, and 615 aircraft; versus 19k (out of 36k!), 38 ships, and 683 aircraft for the Japanese. Navy LCDR James A Michener won a Pulitzer for his book Tales of the South Pacific, about life on way station Vanuatu during the Pacific war. A battle worth noting - Battle of the Bismarck Sea - was described by MacArthur as "one of the most complete and annihilating combats of all time," a "signal moment in military history, when airpower had finally and forever asserted its preeminence over seapower." While winning back the Pacific, the Americans bypassed - leapfrogged - strategically unimportant islands that the Japanese were occupying and had heavily fortified. Submarines & airpower allowed the Americans to cut these bypassed islands off and they were left to "wither on the vine," like Rabaul: "By isolating Rabaul, the Allies effectively made its large garrison (which outnumbered the defenders on Okinawa) prisoners of war without having to fight them." One of the most stunning stories in the book that really captures the Japanese loss is the Mitsubishi Zero plant that lacked an airfield, so the planes were carted away by teams of oxen. Finally in late 1943, the oxen were exhausted and hungry, so they switched to using horses which could work more on less food. 
• The Zen of Thrift Conversions: How To Turn Hidden Bank Stocks Into Big Gains (3/5) A mutual company - whether a bank, insurance company, or other type of company - is one that is owned by its customers. A good example is outdoor retailer REI, which is owned by its members. If the company prospers, it grows and builds up its equity - retained earnings. REI, for example, has almost a billion dollars of "members equity". As one member out of five million, is my membership worth 10x the $20 that I paid for it? What ends up happening with mutual companies is that the people managing them eventually realize that they can help themselves to a lot of the retained earnings by demutualizing. What would be most intuitive would be for a mutual to simply distribute shares to its customers or members, perhaps per capita or else pro rata if it were possible to measure the amount that each customer had contributed to building up the surplus. But this is NOT how demutualizations work. Instead, the a demutualizing company will do an IPO and sell stock, raising capital that it typically does not actually need. The real purpose of this is not make sure that the successor company will be owned by the management (which probably were not customers) and whatever customers were sophisticated enough to understand the con, and liquid and rich enough to participate meaningfully. The other key ingredient in looting the customers' surplus is to underprice the IPO. This is all disguised from the small mom and pop customers' noticing thanks to an intimidating and discouraging sounding prospectus, as well as accounting treatment of unsold mutual shares that disguises their value. Key point: "GAAP accounting rules make [a mutual bank that has taken the first step in converting to investor-owned] look much more expensive than it actually is and completely misrepresent the stock's valuation because of how they count unsold shares." Mentions mutual bank investor websites BankInvestor.com and his own website. The FDIC has a list of mutual banks that haven't de-mutualized yet. The book has interviews with three bank investors, Joseph Stilwell, Lawrence Seidman, and Richard Lashley. Stilwell says, "the single biggest predictor I've seen about good and bad guys, meaning someone who puts himself in the position of an owner, is someone who's buying back their stock at a discount. [...] The worst predictor I can tell you is someone who announces a share buyback and then doesn't do it [which] almost always means they're bad actors, duplicitous, and bad, bad. But if they're just ignoring it when it's so obvious, it's a bad sign, too." Another observation by Stilwell: "Somebody wants every bank. There's not a bank I've ever run across, no matter what anybody said, that didn't have someone else who wants to play suitor to it. People say no one wants it. There's always somebody who it would make sense for. Somebody in-market can get some synergies. Maybe someone out of market wants to grow their empire."
  
• The Chip : How Two Americans Invented the Microchip and Launched a Revolution (3/5) Transistors were a great invention, but pretty quickly the circuit designs using them outpaces the ability to reliably and economically wire them together: the "problem of numbers". The solution was to integrate all of the circuit parts, in miniature, in a single, monolithic block of semiconductor material. "If all the parts were integrated on a single slice of silicon, you wouldn't have to wire anything together. Connections could be laid down internally within the semiconductor chip. No matter how complex the circuit was, nobody would have to solder anything together. No wires. No soldering. The numbers barrier would disappear." The idea was simultaneously invented, by Jack Kilby (of Texas Instruments) and Robert Noyce (of Fairchild). A semiconductor material is halfway between a conductor (like copper or gold) that has only one electron in its outer orbit and an insulator that has a full outer shell of electrons. Silicon and germanium have 4 valence electrons in their outermost shell which gives them the ability to gain or lose electrons equally at the same time. Funny comment by Walter Brattain 25 years after inventing the transistor: "The thing I deplore most is the use of solid state electronics by rock and roll musicians to raise the level of sound to where it is painful and injurious." The development of the integrated circuit is an example of disruptive innovation. "The idea of making resistors and capacitors out of silicon flew in the face of decades of research that had established conclusively that nichrome was the optimum material for making resistors, Mylar for capacitors. Monolithic circuits of silicon would be inherently inferior. [...T]he whole concept posed a threat to an important segment of the engineering community." Also:  "...the giants of the industry - Sylvania, Westinghouse, and their ilk - carefully kept themselves clear of the business for several years. This untimely burst of caution opened the way for upstarts like Texas Instruments, Fairchild, and a slew of new firms in Silicon Valley to work out the problems and cash in on the revolution."
  
• Medical Nihilism (3.5/5) This is by Jacob Stegenga, a philosopher of science at Cambridge, who "argues that medical nihilism is a compelling view of modern medicine. If we consider the frequency of failed medical interventions, the extent of misleading evidence in medical research, the thin theoretical basis of many interventions, and the malleability of empirical methods in medicine, and if we employ our best inductive framework, then our confidence in the effectiveness of medical interventions ought to be low." He is especially concerned about the malleability: "the design, execution, analysis, interpretation, publication, and marketing of medical studies involve numerous fine-grained choices, and such choices are open to being made in a variety of ways... [there are] fantastic financial incentives in place for selling medical interventions that seem effective. Such incentives entail that when evidence can be bent in one direction or another because of the malleability of methods, such bending is very often toward favoring medical interventions, and away from truth." Take meta-analyses: "subjectivity is infused at many levels of a meta-analysis," such as the choice of "primary evidence, outcome measure, quality assessment tool, and averaging technique." I didn't realize how scary Phase I trials are, and trials generally underestimate harms because they are carefully designed to try to show evidence of efficacy. "[W]e should expect to observe examples of drugs that appeared to be relatively safe after clinical trials but came later to appear to be more harmful once used in a clinical setting." Amazingly, "the FDA requires only two randomized trials that show that a new medical intervention has some beneficial effect, regardless of how many trials were performed on the intervention..." One other new idea was the McKeown Thesis, that the decline in mortality from infectious disease had more to do with an improving standard of living than vaccines or antibiotics: "mortality due to tuberculosis had fallen by 75 percent prior to the introduction of streptomycin."
  
• Into Thin Air: A Personal Account of the Mt. Everest Disaster (4/5) By Krakauer. He's 67 now. I think that this and Eiger Dreams are his two best books. As I mentioned in the Eiger review, climbing the highest mountains is a pointless goal that hijacks the "success center" in some people's minds. Look at how poor Beck Weathers, a doctor, came home from the Everest climb with Krakauer in 1996: with no nose or hands. Some notes: "People who don't climb mountains - the great majority of humankind, that is to say - tend to assume that the sport is a reckless, Dionysian pursuit of ever escalating thrills. But the notion that climbers are merely adrenaline junkies chasing a righteous fix is a fallacy, at least in the case of Everest. What I was doing up there had almost nothing in common with bungee jumping or skydiving or riding a motorcycle at 120 miles per hour. Above the comforts of Base Camp, the expedition in fact became an almost Calvinistic undertaking. The ratio of misery to pleasure was greater by an order of magnitude than any other mountain I'd been on; I quickly came to understand that climbing Everest was primarily about enduring pain." The reason for the disaster is that the climbers that day did not turn around at the cutoff time that they had planned, and got caught in a storm at the top. Krakauer explores the reasons for this: "Mountaineering tends to draw men and women not easily deflected from their goals. By this late stage in the expedition we had all been subjected to levels of misery and peril that would have sent more balanced individuals packing for home long ago. To get this far one had to have an uncommonly obdurate personality. Unfortunately, the sort of individual who is programmed to ignore personal distress and keep pushing for the top is frequently programmed to disregard signs of grave and imminent danger as well. This forms the nub of a dilemma that every Everest climber eventually comes up against: in order to succeed you must be exceedingly driven, but if you're too driven you're likely to die. Above 26,000 feet, moreover, the line between appropriate zeal and reckless summit fever becomes grievously thin. Thus the slopes of Everest are littered with corpses." Climbing Everest with a guide takes two months and costs $69k. Opportunity cost! Also, the effect of high altitude on the brain is much worse than I thought. Even Mont Blanc climbers (under 16k', or 5km) come back with abnormalities visible on an MRI.
• Ignition!: An Informal History of Liquid Rocket Propellants (3.5/5) Written in 1972 when author John D Clark was 65: "There appears to be little left to do in liquid propellant chemistry, and very few important developments to be anticipated. In short, we propellant chemists have worked ourselves out of a job. The heroic age is over. But it was great fun while it lasted." More examples of simultaneous invention: "[T]he nature of chemists and of chemistry being what it is, the paths [the Soviets] took were the same ones we [Americans] took. They investigated the vinyl ethers, as the Germans had done before them, and then, in 1948, four years before NYU did the same thing, they synthesized and tried every acetylenic that they could think of. In 1948 they tried the allyl amines; Mike Pino at California Research was doing the same thing at the same time." Sad news for exploring space: "the absolute limit to the performance of a chemical rocket, even in space, appears to be somewhere below 600 seconds." He predicted that first stage rockets would continue to use liquid oxygen and kerosene.