I’m a big reader. Huge. My library consists of thousands of titles, mostly all of which are non-fiction (biographies, finance, business, economics, psychology, history, ethics, etc.) If I were to reproduce it, the cost would be somewhere between $12,000 and $30,000 depending on how difficult it was to get your hands on many of the books that are now out of print (I actually added it up a year ago but don’t remember if I mentioned it on the blog or wrote it on a scrap piece of paper somewhere in a file cabinet). But these aren’t an asset on my balance sheet because I’ve destroyed all of the value they have to anyone else.
Why? I buy to acquire knowledge. When I purchase a book, my job is not to collect something to display but to purchase a prepackaged bundle of ideas that I can then study, absorb, judge, and, if it is useful, implement in my own life. This means that I normally tear into books with a package of highlighters and pens on hand, read, re-read, and thoroughly abuse the manuscript. I flip them over to keep the page open and break the spine. I destroy all resell value. Gone. No one wants to read someone else’s scribbles, highlights, and underlines. (Don’t panic; there are always the books that I buy for display that aren’t written in but I consider these different – the 1934 edition of Security Analysis, the leather-bound copies of The Wealth of Nations, the signed first editions kept for my office.)
The book sitting on the desk of my home study as I read through various valuation models ...
Right now, I’m working my way through a 1,000 page treatise on asset valuation techniques meant for the financial industry. It touches on stocks but discusses everything from appropriate valuation techniques for office buildings to the option to acquire timber rights. (The book is fantastic but some of the techniques people use are just asinine. They think that by giving themselves a false sense of precision they can reduce risk. I prefer the Benjamin Graham test: A man need not know a person’s exact weight to conclude they are fat. Likewise, an investor need not carry an intrinsic value calculation to a few decimal places to conclude an investment is a bargain. If you require that level of detail, it’s too close a call and you should look for greener pastures.)
The book retails for $95.00 at bookstores, so you’re talking around $110.00 after tax. But you can get it on Amazon.com for $55.58. Now that ink has stained the pages, it is effectively worthless to anyone but me. I don’t care. My goal when purchasing books isn’t to invest money. It’s not my agenda or objective.
What does that mean? In another 50 years, I very well could have built a library with first editions bought in stores at the time of their release with a seven-figure value attached to it given how many volumes I add each year. But when I died, they would be auctioned, sold, and liquidated to give a check to my heirs. In any case, I wouldn’t get any utility of it. So I maximize my own personal utility.
Part of this comes down to how my mind is wired. I can recall almost the page range of certain passages in books I read 10 or 15 years ago. It is not unusual for me to be working and think, “I know that [insert name of historical person] once faced this same situation and they structured a solution like this … let me go find that …” The note system I’ve developed over my lifetime helps me quickly flip through and find passages in very short order.
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Reader Comments (17)
Comments are presented chronologically, with replies indented beneath the comments to which they respond.
Suhaib alam
July 14, 2011
like someone once said, the poor invest there money in big tvs while the rich invest in big libraries.
and even when they were poor and middle class, while every other poor or middle class guy would be putting there saved cash into buying gadets, these people would be buying books and it shows who is more successful.
Suhaib alam
July 15, 2011
josh, can you give a blog post on must read books to read to become successful
DeenaFrankel
July 14, 2011
Josh,
I have always thought of you as one of the most intelligent people I have ever been fortunate to have in my life and generally agree with pretty much everything you write - but wow, you are just completely and totally WRONG on this one. In fact, I'm so shocked I had to abadon my "lurker" status and actually comment here.
All your scribbles, thoughts and the like are what will make these tomes truly unique and worth a great deal MORE than their book value (haha) long after you have left this earth - both from a sentimental sense for your friends and family, AND in valuation for the rest of your minions (inevitable side effects of creating an running an empire, you know).
Seriously, I would find it hard to believe that you would pay more for a mint condition copy then the same work with dog-eared corners and handwritten notes from the likes of your buddies Warren Buffett or Charlie Munger? Hmmm??
Deena
Joshua Kennon
July 14, 2011
Replying to DeenaFrankel
Ha! I was so surprised to see you emerge from the shadows I laughed out loud with delight just a few seconds ago! Nice to know you read the site. I hope everything is going well with you.
When writing this, I did have the thought, "You know, I could say these will be worth substantially more money if I pull off everything I desire to pull off by the end of my life because they'd be valuable to collectors."
I didn't want to sound conceited so I struck it. But I thought it. And the fact you realized that and said it out loud is one of the reasons I always liked you.
And, you're right. Someone like Warren & Charlie? I'd pay magnitudes more for a handwritten, notated copy of Security Analysis that had sat on their desk than I would a mint edition copy.
DeenaFrankel
July 14, 2011
Replying to Joshua Kennon
Warm fuzzies all around. I'll be sending you a long overdue update in a private message very soon.
Joshua Kennon
July 14, 2011
Replying to DeenaFrankel
P.S. The double play on the word book value = +100 points.
DeenaFrankel
July 14, 2011
Replying to Joshua Kennon
Glad you caught that - actually I was most surprised that I was the first one to call your bluff, or maybe I'm just the only one with that sort of chutzpah...
Suhaib alam
July 15, 2011
josh, can you give a blog post on must read books to read to become successful
Joshua Kennon
July 27, 2011
Replying to Suhaib alam
I'm working on a post of my favorite books after getting this request a lot.
Crabhooves
July 15, 2011
I was wondering if you could tell us about this note system you've developed? I'm a bit of a pack rat when it comes to information and I'm always trying to find better ways to organize it, so I'm curious how you've tackled the problem.
Joshua Kennon
July 27, 2011
Replying to Crabhooves
I essentially re-edit a book. A highlight is information I'd want to read if I were creating an abridged cliff note version. A highlight + underline is extremely important and useful. Numerical notes are comments, but a * plus the phrase "big key" is important enough I could use in a blog post or to manage my businesses somehow. That, combined with my memory, makes it very easy to flip through a tell what I was looking for. The only thing important enough to repick up a book are the highlight+underline+big key sections, many of which I short hand in the front of the book so I can quick access later.
Eli
August 2, 2011
Hi Joshua,
Great article. I wonder if you would consider writing a bit about the note system you mention? Long term storage and accessibility of information and ideas (return on information =o) is something I'm sure many of us are very interested in.
Eli
August 2, 2011
Replying to Eli
Never mind. I just noticed someone else beat me out on that idea below.
Joshua Kennon
August 2, 2011
Replying to Eli
#1: Check the two attached images. One way I'm able to retain and retrieve information is by drawing out the most important things in a non-fiction book with a notation that includes a star and the phrase "huge key". These are then indexed in the blank pages in the front and back of a book, many times with a quick note about the content. This can include a topic to study further or an anecdote that may be useful. These pictures are from the John Bogle books I'm working my way through now. The highlights, underlines, and index notes combined with the chapter in which they are located have become second nature so it doesn't take me very long, even if I haven't picked up a book for years. The rise of ebooks might make a lot of this unnecessary with the built-in highlight and note-taking capabilities.
#2: The third attached image shows a section that has been underlined and highlighted (always highlight first or the underline will streak when the highlighter ink goes over it). There is a roman numeral to the side. Whenever I want to record my thoughts, comments, or notes to myself in the future, I number the passage (e.g., if there are three important things on the page requiring notes, there would be a I, II, and III note in the margins). That way, I can record what I was thinking at the time. It's particularly useful.The hierarchy pretty much goes:* + Highlight + Underline = Big Key with Index Note: Most ImportantHighlight + Underline + Numerical Note:Very ImportantHighlight Only: If Developing Cheat Sheet from Book, Would IncludeIt works for me. I'm not sure why but it's slowly evolved over my lifetime.
Dheeraj
August 2, 2012
Replying to Joshua Kennon
Josh ... images not working ... not found
Elías Julián Elías Gutiérrez
August 13, 2017
This is awesome Joshua...
I'm creating my own library as well... And I do the same thing, write notes and highlight things that matter to me...
It's an incredible journey to go and do research and find very interesting books and then when you read them it feels like your having a conversation with the author... So much knowledge out there...
Donna Bayley Lovett
December 1, 2017
So - what I REALLY want to know is......is that a REAL $5000 bill? They are very rare, but knowing your penchant for collecting things, I'm positive it is! Cool!