What it’s about

William J. O’Neil shares his stock selection technique,  the “CANSLIM” method, which combines fundamental and technical analysis to identify potential investment opportunities. Since 2003, this strategy has uncovered securities that have generated returns that have beaten the S&P 500. It can be used to increase the potential to identify stocks with strong growth potential.  

C: Current quarterly earnings per share 

A: Annual earnings growth 

N: New products, new management, or new highs 

S: Supply and demand 

L: Leader or laggard 

I: Institutional sponsorship 

M: Market direction 

Why I recommend it

This book provides investors with a lot of valuable information and is based on O’Neil’s own experience from his successful career as an investor. He shares his findings and provides further insight into new concepts.  Learning about the seven variables within the CANSLIM strategy can help to narrow down the search for quality companies. One of the key concepts that struck me was that companies that reach new price highs generally have positive price momentum and are an attractive investment opportunity.   

Who will benefit?

This book is beneficial for individuals who are seeking a structured approach to investing in the market. O’Neil passes along valuable knowledge on selecting stocks. The CANSLIM method has been proven to generate positive returns in different market environments. 

What it’s about 

Asness is a founder and CIO at AQR which is widely recognized as a leading quantitative equity hedge fund firm. AQR periodically publishes white papers and earlier this year produced a paper on what they call the “value spread” or the spread between cheap and expensive stocks within sectors. 

Based on their work, growth has outperformed value since about 2017 and even before the most recent run up in large cap technology shares, the valuation gap between growth and value was about as high as it was during the dot.com bubble.  

Why I recommend it 

AQR’s work provides a compelling case showing that investors are prone to over extrapolating above-trend growth which tends to dissipate after about five years. Based on the belief that markets revert to the mean over time, the coming years should be very interesting regarding how the relationship between growth and value progresses. 

I also recommend watching Asness’ appearance on Jim O’Shaugnessy’s Infinite Loops podcast where he spoke about a variety of topics including crypto currencies, value spreads and investor psychology.  

Who will benefit?

Investors, analysts, and advisors. Anyone interested in deepening their understanding of investing based on quantitative data. 

What it’s about 

The book is an account of the decades-long battle to control what has emerged as the world’s most critical resource, microchip technology. It delves into the history of the development of the technology, recounting the events that led to the US perfecting the chip design and its use in the arms race during the cold war.  

Why I recommend it 

Over the last few decades, America has let components of the chip-building process slip out of its grasp.  Seeing microchips as the new oil, governments around the world are now offering subsidies to incentivize domestic production to maintain some level of control over this critical input. The publication of the book late last year is timely given the surge in demand for semiconductors during the pandemic and its impact on global supply chains. The widespread use of chips in everything from smartphones and automobiles to military hardware came into sharp focus as chip supply was unable to ramp up quickly enough to meet demand, imperilling the production of a range of products around the world. Governments have woken up to the pitfalls of concentrating supply in a few regions including Korea and Taiwan.  

Who will benefit from it? 

Anyone interested in technology and business set against the backdrop of increasingly tense geopolitical events. 

What they’re about 

At Pender Ventures we invest in private technology companies and are active members and community builders of our tech startup ecosystem. The Logic and the Vancouver Tech Journal are great sources of news about the tech ecosystem. 

The Logic covers the innovation economy by providing in-depth reporting on the organizations, policies, and people driving transformational change including discussions with company leaders and employees.  

The Vancouver Tech Journal (VTJ) provides the most complete coverage of Vancouver’s innovation ecosystem. I signed up for the Sunday morning email distribution list a couple of years ago where its founder Will Johnson sends weekly commentary and insights on the local tech ecosystem. Today it’s called The Sunday Briefing and remains a free newsletter. Paid subscribers receive additional daily briefs, invitations to events, and informal meetups.  

Why I recommend them 

Both of these resources provide reporting on developments in the tech ecosystem, hustling to source information not otherwise reported in order to be able to provide a complimentary and unique perspective. 

Who will benefit? 

These two resources are of benefit to those engaged in the technology sector. The Logic is a paid subscription service and provides information that will benefit those engaged with the technology sector in Canada. The VTJ provides both paid and free subscription services. 

What it’s about 

The Acquired podcast, hosted by Ben Gilbert and David Rosenthal, provides an in-depth exploration of the strategies and decisions that have led to the success of some of the world’s greatest companies. 

Why I recommend it: 

Each episode, often several hours long, delves deep into the intricacies of successful companies, offering a level of understanding that surpasses what financial statements can provide. The podcast also features an impressive lineup of guests – industry experts who have played significant roles in these companies. Their first-hand experiences and insights offer a unique perspective that is rarely found in traditional research reports or news articles. 

Who will benefit? 

Acquired is more than a podcast; it’s a valuable resource for anyone seeking to understand the full picture of a company’s journey to success. It’s particularly beneficial for entrepreneurial-minded listeners, including senior executives, founders, or aspiring founders. The podcast not only provides valuable insights but also fosters a community of like-minded individuals. Immersion in such a community can inspire listeners and enhance their analytical thinking. I highly recommend it for anyone seeking to deepen their understanding of business or looking for inspiration in their entrepreneurial journey.

What it’s about 

The recent release of the Blackberry movie, based on the book by Jacquie McNish and Sean Silcoff, has resurfaced the incredible background story of the Canadian company that became Research-in-Motion (RIM). While the movie takes great liberties for entertainment purposes, the book provides deep insight into the rise and fall of the company. Blackberry became the dominant global smartphone in the late 1990s, early 2000s with its highly addictive keyboard and its secure enterprise solution that IT managers loved. Subsequent challenges, including fierce competition in a rapidly moving market, demanding telcos, technological issues, and, of course, management dynamics, resulted in the eventual strategic failure of the firm.   

Why I recommend it 

As a firm believer that it is important to understand and learn from history, this book seems particularly apropos in a world that is being transformed by AI.   

Who will benefit? 

The book, along with the film, offers key takeaways and lessons for entrepreneurs and investors alike. 

What it’s about 

The Song of the Cell is the third book in Siddharth Mukherjee’s unique trilogy of medical history-cum-scientific primer. Like the two previous books—one on cancer and the other on genetics—this one uses the history of scientific inquiry as a scaffold for an accessible introduction to cell biology. 

Why I recommend it 

A respected oncologist and researcher, Mukherjee is also an enthralling storyteller. In his able hands, the painstaking work of lab science is transformed into a thriller of hypotheses and insights, with a healthy dose of psychology and character development, especially in the case of recent research, wherein many of the leading scientists are the author’s mentors and collaborators. As the story speeds along, the modern consensus view of how cells work is revealed, animated by Mukherjee’s creative glosses on the inner workings of protein synthesis, gene expression, viral infection and so on. The question at the end of every story is around sickness and health. By the end of the book, the functioning of many of life’s ailments large and small are more clearly in view. Some other themes that stood out are the stunning complexity of the human body, the creativity and determination of scientists probing its inner workings, and the ingenuity of cutting-edge medical technologies such as gene editing and cell therapies. 

Who will benefit from it? 

The Song of the Cell is written for non-scientists. Professionally, I have found it adds to my understanding of discussions around drug development and other medical technologies that operate at a cellular level. Zooming out, given the fundamental role of the cell to our existence, I imagine the book would interest almost anyone. 

What it’s about 

Outlive is Dr. Peter Attia’s manifesto on living a long, high-quality life based on his experience and research on the applied science of longevity and optimal performance. The primary focus of the book is the science, practices and therapies that can be applied to improve human health span. While the average human lifespan has increased in the past century, health span refers to extending the quality of life: physically, mentally, and emotionally. He breaks down medicine into three different phases: Medicine 1.0 which spanned centuries of human existence until the 20th century based on observation as opposed to science; Medicine 2.0 which refers to the modern era of medicine with scientific advancements like vaccines, surgeries, and prescriptive treatments, and, finally the emergence of Medicine 3.0 which is based on evidence-informed personalized medicine to prevent chronic conditions. The book provides some interesting and unique perspectives on longevity with advice, interventions, and tools to expand lifespan.  

Why I recommend it 

I first heard Dr. Attia on a podcast in 2018 and was fascinated by his career, passion, and pursuits where he applied his early studies in mechanical engineering into the practice and application of medicine. Dr. Attia used concepts and examples of weaving science, with storytelling, to communicate complex research and information on human health and longevity. He makes an interesting observation on how health, in many ways, is like compound interest.  Your body will yield the benefits of a nourishing diet and exercise throughout your lifespan in the later stages of life.  

Who will benefit? 

The book is a compelling, interesting, and worthwhile read for anyone and everyone interested in improving their long-term quality of life. 

What it’s about 

Crucial Conversations equips readers with a core set of skills and tactics to navigate high-stakes conversations effectively. The book offers numerous examples, providing readers with practical guidance for handling crucial conversations confidently. 

Why I recommend it 

The mishandling of crucial conversations often leads to painful problems both at work and in personal life. These challenging discussions can quickly escalate, resulting in negative behaviors, communication breakdowns, and unresolved issues. Crucial Conversations provides insights into the anatomy of these conversations and offers strategies to navigate them effectively. The book emphasizes the importance of proactively engaging in these conversations, creating a safe environment for dialogue, and building a shared understanding among all parties involved. By managing emotions and fostering mutual respect, leaders can achieve win-win outcomes where all individuals feel heard, respected, and satisfied with the results.  

Who will benefit? 

The book is a must-read for company leaders and individuals seeking to improve their communication skills. By mastering the principles and techniques outlined in this book, challenging conversations can be transformed into opportunities for growth and collaboration. While this book is vital for anyone in a leadership position, its benefits extend beyond formal leaders. 

“At the heart of almost all chronic problems in our organizations, our teams, and our relationships lie crucial conversations – ones that we’re either not holding or not holding well”.

What it’s about 

The Disciplined Listening Method is an enlightening guide written by Michael Reddington, a certified forensic interviewer. He offers a comprehensive approach to understanding the art of listening and extracting hidden value from conversations. With real-world examples and expert advice, this book delves into the strategies and mindset necessary to become a skilled and perceptive listener. 

Why I recommend it 

This book provides invaluable insights and practical techniques that can transform the way we listen, understand, and connect with others. It sheds light on a crucial but often overlooked aspect of effective communication: listening. The author combines their expertise with relatable anecdotes and practical techniques, making it a compelling read for anyone seeking to enhance their communication skills. The book not only emphasizes the significance of listening but also provides valuable tools to implement and practice disciplined listening in various contexts. 

Who will benefit? 

Anyone interested in improving their communication skills and unraveling the deeper layers of human interaction. Professionals in fields such as sales, negotiation, leadership, counseling, law enforcement, and customer service will particularly benefit from the insights and techniques presented in this book. The book offers a step-by-step approach to cultivate active listening skills, enhancing one’s ability to uncover hidden motives, emotions, and important information in conversations. The techniques and strategies shared in the book empower readers to ask thoughtful questions, decipher nonverbal cues, and create a safe environment for open dialogue. 

What it’s about

Grant is an organizational psychologist and his book focuses on the concept of rethinking and unlearning. It’s about the fluidity of our convictions and the need to challenge our own thinking, especially in an age characterized by rapid changes and a firehose of new information. Its learnings are divided into three parts – individual rethinking, interpersonal rethinking and how to foster a learning culture within an organization.

Why I recommend it

Grant argues that one of our major stumbling blocks to progress and innovation is our reluctance to question our own beliefs and assumptions. He states that the most successful people and organizations are those that are willing to “think again,” to question and revise their beliefs regularly, effectively becoming “lifelong learners”.

The book is rich with unconventional insights. For example, one surprising idea is that being open-minded doesn’t mean just passively accepting others’ perspectives. Instead, it requires active engagement, including debating like you’re right and listening like you’re wrong, a dynamic Grant refers to as confident humility.

Think Again is a provocative call for intellectual humility and flexibility, a book that challenges us to remain open to rethinking our ideas and to be willing to let go of our ego in the pursuit of learning and growth. I’ve personally found the book so insightful and timely that I gave copies of it to every member of our investment team last holiday season.

Who’s it for

It’s a breezy read and highly recommended for anyone curious about clearer thinking. One of my favourite passages is:

 “Research reveals that the higher you score on an IQ test, the more likely you are to fall for stereotypes, because you’re faster at recognizing patterns. And recent experiments suggest that the smarter you are, the more you might struggle to update your beliefs.”

What it’ about

Malcolm Gladwell’s Blink explores the power of intuitive thinking and the unconscious mind in decision-making. Gladwell argues that sometimes our snap judgments, made in the blink of an eye, can be just as accurate—if not more so—than decisions made after careful and conscious analysis. He delves into the concept of ‘thin-slicing’, where small amounts of information can lead to rapid and accurate judgments, while also exploring the potential pitfalls of relying too heavily on our unconscious biases.

Why I recommended it

This thought-provoking book sheds light on the power of intuition and the importance of quick decision-making in various contexts. It dives into where you should/can trust your gut, rather than overanalyzing the immense amount of data we have access to today. With that in mind, Gladwell also emphasizes the significance of education, experience, and thorough analysis as essential elements in making intelligent and instinctive investment decisions.

Who will benefit from it?

Anyone who is looking for the confidence to trust their gut. From a business context, you will learn more about how the interplay between intuitive judgments and analytical thinking can help investors make more informed decisions and enable business professionals to navigate complex situations, negotiate effectively, and identify potential opportunities or risks. I highly recommend Blink to anyone interested in the intersection of psychology and decision making, with opportunities to connect the learnings in the arena of business and investment analysis.

What it’s about

Lessons from the Titans is written by Scott Davis, Carter Copeland, and Rob Wertheimer, sell side analysts who cover industrial companies that started out as ‘technology’ companies. The authors use historical case studies of ‘Industrial Titans’ and draw thoughtful comparisons with contemporary technology giants. The book brings together the history of industry, investment strategy, and corporate management from these industrials. They dive into several companies including Caterpillar, Deere & Company, and Boeing, among others. In the case studies they highlight these companies’ strategies, triumphs and struggles over the years and extrapolate lessons applicable to today’s cohort of tech-based companies. Three themes through the book are long-term strategic planning, strong corporate culture, and sustainable business practices. 

Why I recommend it

I picked up the book on a recommendation from Patrick O’Shaughnessy. As an investor with a long-term perspective and a keen interest in technology companies, I’m constantly looking for insight into which companies will be able to grow sustainably and which are ripe for disruption. Wonderful investment opportunities can be found in the companies that will survive and thrive as well as those companies that will disrupt today’s tech leaders. As tech companies adjust to a more traditional capital environment, where cheap capital make growth at any cost a plausible business model, the world has changed. Tech companies are just like any other company and the same business concepts apply. The book’s emphasis on core competencies and long-term strategic thinking over short-term profitability and market trends resonated with our search for compounders.

Who will benefit?

The analysis was not as deep and detailed as I was craving but Lessons from the Titans is an enlightening exploration of business sustainability and strategic planning that provides valuable historical lessons for investors. Some analogies are a bit stretched, however the fundamental business principles highlighted are universally applicable. For a curious long-term investor keen on understanding the complexities of enduring businesses and applying this knowledge to the rapidly evolving tech sector, this book is a great addition to helping understand the changing dynamics at play for technology companies. There are applicable lessons for both operators of tech companies and investors in these companies.

What it’s about

The book was written by Paul Volcker and Christine Harper and published in 2018, the year before he died at the age of 92. Volcker was most notably the Chairman of the Federal Reserve through the late 70s and early 80s which was a period characterized by high levels of persistent inflation, 10% unemployment and 20% interest rates. The book is full of insights that are relevant today. There are many references to interactions with notable figures such as Richard Nixon, who Volcker advised through the period that ultimately resulted in the end of dollar convertibility to gold and the Bretton Woods system, David Rockefeller and William Sharpe, Nobel prize winner known for the “Sharpe ratio”.

Why I recommend it

It’s a timely read not just for his insights on counteracting the inflation of the 70s but also for the comments on government and politics by a man who began his career in the 50s and had been “keeping at it” for over 60 years. The book is a memoir, so it includes personal details from before and after his time at the Fed, including a personal conversation he had that speaks to a key theme of the book. He recalls expressing his concern over the direction of the country and the difficulty of making progress in the current time period to his mother. Her advice to him, which he considered to be the only convincing answer he had to his question was: “The United States is the oldest and strongest democracy in the history of the world. In two hundred years it has survived a lot. Get back to work”.

Who’s it for

History, politics, and finance buffs. The book is full of great anecdotes like this:

At a presentation on derivatives prior to the rise of credit default swaps and the financial crisis of 2008, Volcker asked William Sharpe how much of “this new financial engineering contributed to economic growth?” “Nothing” was Sharpe’s response… “it just moves around economic rents in the financial system. Besides it’s a lot of fun.

What it’s about

It’s an insightful examination of mergers and acquisitions. Since it is widely accepted that most mergers fail, the authors investigate why certain types of value-destructive mergers continue to occur and what can be done to reduce the percentage of failed mergers in the future.  Having studied the four post-1980 business-merger waves, Clark and Mills share their learnings and give us tools that can help us increase our chances of creating value through mergers and acquisitions. Knowing the optimal timing in the merger cycle to participate, understanding the types of business combinations that make sense (i.e. bolt-on acquisitions vs transformational acquisitions) and evaluating the purchase premium in absolute terms as well as relative to the net present value of expected synergies will help increase the chances of success.

Why I recommend it

At Pender, we spend a lot of time looking for great management teams that are great capital allocators as capital allocation is the most fundamental responsibility of senior managers.  Mergers and acquisitions are the largest use of free cash flow after internal investing.   From CEO’s looking to make acquisitions to outsiders wanting to assess the likelihood of a merger success, this book will give you the tools to make those assessments.

Who will benefit?

Anyone looking to better understand and improve merger success.

What it’s about 

Topdown Charts is a series of chart-based market studies by Callum Thomas. 

Why I recommend it 

For those of you who have followed our story here at PenderFund, you will be aware that a favorite resource of mine is Callum Thomas’s Topdown Charts.  Callum rigorously follows a wide variety of markets, asset classes and economic indicators.  He looks for a combination of stretched pricing and contrarian positioning and sentiment indicators to find opportunities for profit seeking investors.  A hugely valuable resource in my view.   

Who will benefit? 

Callum has an offering to fit every budget, from his free online posting on Twitter and Linked In, to smaller subscriptions for individual investors and somewhat more expensive offerings for institutional investors. I personally enjoy speaking with Callum and he has been a recurring guest in our Profiles in Credit podcast series. His work is worth the time reviewing for analytically oriented investors. 

What it’s about  

This book by Bruce Dowbiggin follows the Vancouver Canucks’ journey to their 2011 Stanley Cup Final. It highlights the unconventional decisions made by then general manager, Mike Gillis. Gillis challenged industry norms within the hockey community through his innovative approach. 

Why I recommend it 

What makes this book intriguing is the exemplary defiance of convention. Often referred to as an ‘old boys club,’ the NHL managerial and executive level predominantly comprises of individuals who have had professional hockey careers and later transitioned into different roles within the game. They typically operate under a pre-established playbook replicating others’ strategies.  

Mike Gillis, one of the rare non-OBC Members to secure an NHL general manager job in 2008, sought to carve a unique path. He aimed to find overlooked opportunities within the Canucks organization, particularly in the areas of player health and safety, and organizational attractiveness. These efforts included hiring dietitians, psychologists, and sleep consultants, as well as enhancing the organization’s facilities. 

Who will benefit? 

Whether you’re a hockey enthusiast or a fan of stories about defying convention, this book offers both. Gillis’ challenge to conventions provides a structured thought process to help readers broaden their perspective in their respective fields. Personally, I am interested in broadening my scope beyond the confines of my own industry. I delve into entirely unrelated areas, posing questions like: What strategies are the experts in this field employing? Why are they doing it? What factors have contributed to their success? This stimulates my creative thinking, prompting me to consider how I could adapt their successful strategies into my own field. This book provides the inspiration to do just that.