The Scramble for Africa by Thomas Pakenham

I picked up this book upon arrival in Nairobi for my ADP assignment 3 months ago as I thought this is the best way to put thing into context during my travels in Africa. This is the story of 19th century colonial expansion which in the words of Dr. Livingstone was designed to bring the three C’s “Civilisation, Commerce and Christianity” to the African’s, whether they wanted them or not. One would imagine that reading 650 pages about this very wide subject covering the years from 1876 to 1912, 2 continents and myriads of names, dates and places would get really tedious, but Pakenham has managed to tell a proper story that serves both as a history lesson and as a tale of conquest and betrayal. Pakenham tends to focus more on the British scramble, but still it is a great book that together with “The State of Africa: A History of Fifty Years of Independence” will give you an excellent starter on the continent. The only thing left would be to actual visit it!

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The Wal-Mart Effect by Charles Fishman

500: Typical number of jobs created by a new Wal-Mart Supercenter.

 

450: Typical number of retail-related jobs eliminated in a community 5 years after the opening of a new Wal-Mart Supercenter

 

It is headlines like the above that drew my attention one Sunday afternoon while browsing the business section of my local bookstore. Being in Supply Chain Management I thought reading about the biggest store and employer (1.6 million employees) in the world would be ideal to let me  into some of the secrets of Wal-Mart and its highly efficient supply chain and procurement. Well, reading this book, I soon found out that Wal-Mart is one of the most secretive companies in the world and maybe this is one of the reasons it has remained so successful. Wal-Mart has imposed a wall of silence around its operations and its relationship with  suppliers with the constant threat of losing business with Wal-Mart.

 

In his book, Fishman shows how Wal-Mart started from a small thrift store in rural Arkansas by Sam Walton and turned into the world's biggest company  (now 2^nd after Exxon-Mobile, due to the soaring oil prices) by providing inside stories and anecdotes from retired Wal-Mart executives and suppliers. We learn how Wal-Mart in the early 1990s demanded that suppliers stop boxing deodorant cans, creating an industry standard and saving many trees at the same time.  But also how the $2.97 gallon of pickles, nearly put its manufacturer, pickle-maker Vlasic, out of business.

 

Fishman, with the depth and breadth of his research tries to answer the question on everybody’s mind; Is Wal-Mart bad for America? Do suppliers, pressured by Wal-Mart’s slogan of “always lower prices” lay off employees and close down factories to open up new ones in China in order to reduce their prices and stay competitive? Fishman points out how Wal-Mart’s requests of manufacturers for yearly 5% cost cutting are difficult to resist, especially when Wal-Mart is your largest customer.

 

The Wal-Mart Effect is a fascinating book, and even though we don’t live within 15miles from a Wal-Mart store like ninety percent of Americans, its impact probably reaches our lives without us even realising it.

The Long Tail by Chris Anderson

In his book The Long Tail Chris Anderson, a business journalist who formerly worked at The Economist and now edits Wired magazine promises to answer the question: “Why the Future of Business is Selling Less of More”.

 

This is a fascinating book that describes how we are now moving away from the hit, whether it is a blockbuster film, a bestselling novel or a chart-topping song and we start discovering the niche.

 

Anderson claims to have coined the term "Long Tail" to describe these niches for which we didn’t have room for on our shelves, screens and channels but we now do have room for thanks to the internet and the abundant distribution systems.

So from the perspective of a store like Wal-Mart, the music industry stops at less than 60,000 tracks, since an average record store needs to sell at least four copies of a CD a year to make it worth carrying. However, for online retailers like Rhapsody, with a library of over 1.5 million songs, the market is seemingly never-ending. Anderson, supporting his research with various graphs, proves that not only is every one of Rhapsody’s top 60,000 tracks streamed at least once each month but so are all the rest of the tracks in its library since every song will find an audience somewhere in the world. All of these sales of songs in the Long Tail, can be highly profitable which challenges the common business saying that twenty per cent of the products generate about eighty per cent of the revenue.

 

Another example the author give is of a Blockbuster store, where ninety per cent of the movies rented are new releases. His contrasts it with Netflix, a successful DVD-rental company that allows its customers to order films online and receive them in the mail, where about seventy per cent are from the back catalogue, and many of them are documentaries, art-house movies, and other little-known films that might never have had theatrical release.

 

But "Without filters, the Long Tail risks just being noise," Anderson writes. That is where filters like Google and Amazon come in. Where Blogs and recommendations can promote the niches to a wide audience with the power of the internet.

 

According to Anderson there are two keys here

• Make everything available.

• Help me find it.

 

Nevertheless he closes by acknowledging the fat that people like being with other peoples, shopping or going to the movies, “There's a comfort in numbers,"

Inventing Japan by Ian Buruma

Inventing Japan is a kind of biography of a century of Japan's history from Commander Perry's "black ships" which sailed to Japan to force trade with the U.S. to the 1964 Olympics in Tokyo. I enjoy reading history books, but until now I mainly focused on European history, so reading this book gave me a different perspective of things. It's a good introduction of how Japan became one of the biggest economic powers, and in 176 pages it was easy to read during my commute. The author's account is very personal and it goes through Japan's descent into militarism and its reaction to defeat in the Second World War. Inventing Japan gave me an overview of modern

Japan's many identities, it's transition towards democracy and the creation of a constitution drawn up under the Allied Occupation, but also of Japan's love of suicide and assassination and the fact that Japan's system of Emperor worship, far from being traditional, is a distinctly modern phenomenon.

A Random Walk Down Wall Street by Burton G. Malkiel

Seeing RBS's stock price at 12pence makes you think what if a year ago i had invested in RBS a large part of my savings, when it's price was around 400pence or 2 years ago when it was around 700. In this context "A Random Walk Down Wall Street" is very relative since it is a highly influential book about investing in the stock market. In a knutshell Burton Malkiel, a Princeton Economist, explains that the stock market is so efficient that it is a waste of time for the typical investor to try to exploit any inefficiencies. His best bet is to simply buy a diversified

portfolio heavy on index funds that includes a large number of different companies (eg S&P500) and hold on it. The efficient market theory states that all knowable information about a stock's value is already reflected in its share price and this is what Malkiel holds as true. Even if you manage to beat the market chances are that the transaction costs of your trading will eat up the extra returns.

Bottom line: you can't predict future stock prices!

Apart from th is, Malkiel provides a lot of investing information around the pricing of the stock market, which you don't have to be an expert to understand. He also cites some of the financial "crazes" in history including tulipomania, where even poor people sold their possessions in order to speculate in the tulip market, giving an insight into the irrational investor behavior that causes stock market bubbles. Although originally published in 1973 it has been updated many times with the last edition in 2007. I think a new edition that would include a chapter on the recent economic crisis would be quite useful !

PS You will find no get rich quick scheme here!