Issue #32: Top 3 Books I Read in 2022

NOTE: this was a past issue of my weekly newsletter, Timeless Gems. Join my free mailing list so you don’t miss out on future issues.

Today’s gem is my top 3 book picks for 2022. It’s always tough to narrow it down to just 3. But I think these books stand out well above the others I read in 2022.

Pick #1 – Lessons From The Titans by Scott Davis, Carter Copeland & Rob Wertheimer

This book profiles several different industrial giants. These are mature businesses that have been through many capital cycles. They’ve all experienced their fair share of trials and tribulations. The profiled companies include GE, Boeing, Danaher, Honeywell, United Technologies, Caterpillar, Roper, Transdigm, Black & Decker, and United Rentals.

Why did I like it?

The authors did a great job of picking out the key lessons that can be applied to any business, including software/technology businesses. Disciplined capital allocation, strict cost controls, continuous improvement, and resilient systems design are all lessons new-aged businesses can learn from old-school titans. To reference one of my favourite quotes of all time:

“If I have seen further than others, it is by standing upon the shoulders of giants” – Sir Isaac Newton

Pick #2 – Capital Allocation by Jacob McDonough

This book details the early days of Berkshire Hathaway. Warren Buffett acquired the business in 1965 and started making drastic changes. It’s an in-depth look at all the early critical business decisions Buffett made to lay the groundwork for Berkshire to transform it into the $704bn conglomerate it is today.

Why did I like It?

This book was very well researched and the author eloquently weaves words and numbers together. There were a lot of interesting tidbits about Berkshire & Buffett that I didn’t know. For example, Buffett used a ton of leverage in the early days to get deals done (but today, he often speaks against using leverage). Overall, this is a must-read for anyone responsible for allocating capital within a business. This book will show you how Buffett ruthlessly allocated capital to the best available options to build the empire he has today.

Pick #3 – Junk To Gold by Willis Johnson

The book is about the story of Copart, written by the founder of the company. Copart sources wrecked cars from insurance companies, stores them on their junkyards, and then sells them via their online auction.

Why did I like it?

It’s an inspiring story, Willis started the business by acquiring his first junkyard for $75k. Through shrewd acquisitions, creative financing, and operational innovations – Copart has grown into a $30bn behemoth. What’s fascinating about Copart is that it is one of the rare businesses that has both a digital moat and a physical moat. Not to mention, it is perhaps one of the best roll-ups of all time. I wrote about Copart in my blog post titled Copart and The Art of the Rollup.

I hope you enjoy reading these books as much as I did. My previous annual picks can be found here: 2021, 2020, 2019.