The Investor's Consigliere

Michael Lewis Reviews The Snowball (and Warren Buffett)

In the New Republic.

I don't want to write a long review of a very long review of a very, very long review of Buffett's life-that's too much reviewing.  I will say two things though:

1)  Lewis and Buffett have a weird history.

2)  Lewis is a genius at narrative storytelling.  This genius works best in fiction because in fiction you get to make up the facts, and you get to make it "life with the dull bits cut out" as Hitchcock said.  In business non-fiction, however, you don't have those two luxuries.  You have to get your facts straight, and you can't completely discard the dull bits--the counterarguments, the caveats, the things that are sort of true but not 100% true--just to burnish the luster of the story, the way a diamond cutter discards much of a rough diamond to create the perfect polished stone.

For instance, in his attempt to draw a distinction between Ben Graham and Buffett, and to make a larger point about the Great Depression, which produced Graham's worldview, and the post-WWII era, which produced Buffett's, Lewis writes the following:

Benjamin Graham was in many ways very different from what Warren Buffett was destined to become. Graham's experience of the Great Depression had instilled him with pessimism. He eschewed judgments about the future prospects of a company or an industry, and instead looked for bargains in the here and now--companies that were trading below the value at which they might be liquidated. Graham was "looking at businesses based on what they were worth dead, not alive," as Schroeder puts it. Cigar butts, he called these.

Cigar butts obviously appealed to Buffett, but Buffett's investment career was destined to coincide with a very different period in American financial history. There never was a better time and place to make money from optimism than in the American stock market since World War II. Had Buffett confined himself to the gloomy business of plucking wet smelly cigar butts off the ground, he would never have become Warren Buffett. And Buffett was built differently than Graham. He had emerged from his childhood both a pleaser and an optimist. Dale Carnegie's How To Win Friends And Influence People apparently made a deep impression on him. When he looked at a company, he saw not just its asset value but also its possibilities.

Buffett's first big bet was on a then obscure insurance company called GEICO. GEICO was not, by Graham standards, a bargain: it traded at a price above the value of its assets. But Buffett dug down into the business, saw how fast the company was growing, and, as Schroeder writes, "felt confident of being able to predict what it would be worth in a few years. ... A less Graham-like analysis could hardly be imagined. Graham's 1920s bubble and Depression experiences had made him suspicious of earnings projections. But Warren was betting three-quarters of his patiently acquired money on the numbers he had calculated."

None of the above excerpt is false, but there is one hole in it:  When Buffett bought GEICO, which to Lewis represents the mythical break of the student from the master, its chairman and largest shareholder was . . . Ben Graham.

One more example:  Trying to cast the present financial crisis as a kind of final commeuppance for Buffett in his old age, Lewis writes:

Which brings us, oddly, to our present financial crisis. There has never really been a bad time in the last fifty years to be Warren Buffett, but just now would seem to be less favorable than most. If Buffett still measures his life by the book value per share of Berkshire Hathaway, then for the first time in forty years he must feel like a wasting asset. His share price is still off more than 40 percent from its highs, underperforming even the S&P 500. He railed against derivatives as weapons of mass destruction, and now turns out to have been sitting on a $68 billion pile of credit default swaps and exotic put options on various stock market indexes. And having vowed never again to become entangled in a big Wall Street investment bank, he has gone and sunk $10 billion into Goldman Sachs, a virtual re-enactment of his investment in Salomon Brothers--cash for reputation. The difference this time is that he has gotten himself a sweeter deal than not merely ordinary shareholders, but also the U.S. Treasury . . .

Thus she leaves open the possibility that Buffett might have gone a bit soft in old age. "Basically, when you get to my age," she quotes him telling a group of business school students, "you'll really measure your success in life by how many of the people you want to have love you actually do love you. I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them. But the truth is that nobody in the world loves them." Where there was once only the time value of money, there is now also the time value of love. My God, he's even given his fortune away!

In short, there has never been a better time to bet against Warren Buffett.

First of all, the excerpt is misleading and wrong on the facts: 

1. When you write that Buffett measures his life by the book value of Berkshire's shares, and in the next sentence state that the stock is off 40% from its highs, you create the impression in the jury/reader's mind that the metric by which Buffett measures his life is down a whopping 40%.  Not true: Berkshire's book value declined by only 9.6% in 2008 vs. a decline of 37% in the S&P.  This 27.4% outperformance, you can read on the first page of Berskhire's annual report, has been bettered only six times in Berkshire's history with Buffett in charge.
2. How is Berkshire "sitting on a $68 billion pile of credit default swaps and exotic put options on   various stock market indexes"?  I don't know where that number comes from.  And if it's the      notional value, Lewis should know that overstates the liability to Berkshire.
3. Buffett has not "sunk $10 billion" into Goldman Sachs.  He has sunk $5 billion into Goldman        Sachs and received warrants to purchase an additional $5 billion.

Secondly, I don't know how anyone can agree with the impression Lewis wants to create, that the financial crisis plus Buffett's age means "there has never been a better time to bet against Warren Buffett."  If you're the world's greatest value investor, and asset prices are way down all over the world, and you have bilions in cash and borrowing capacity to deploy, and Berkshire's stock is down, maybe it's actually a pretty good time to bet on Buffett.

Book Review: "Pilgrimage to Warren Buffett's Omaha"

The subtitle is "A Hedge Fund Manager's Dispatches from Inside the Berkshire Hathaway Annual Meeting," it's by Jeff Matthews of Ram Partners, LP, and you can buy it here.

At this point, writing a book about Warren Buffett is a little like writing another commentary on the Bible--so many have gone before you that you must work hard to say something new, to approach the subject from a new angle.  Yet another "How to Get Rich by Imitating Buffett" simply won't do.  A good new Buffett book, in other words, should be like a good Buffett investment--its theme should be undervalued by the market, overlooked, even a little unpopular.

Matthews manages this by focusing on two Berkshire Hathaway annual meetings he attended.  He gives Buffett his due by retelling all the familiar stories, and recounting all the familiar instances of Buffett's genius, but the strength of the book is that it confronts, in a polite way, the simple fact that Warren Buffett is the leader of a cult.

I define cult as a group of followers of a leader where the following is true:

1)  The followers invest the leader with extraordinary authority.  "He is the leader because he is right" gradually becomes "he is right because he's the leader." 

2)  The leader is charismatic and even a little seductive, in the sense of manipulating human psychology to guide the behavior of others in a way that furthers his aims. 

3)  The followers can get a little weird.

Read the book and ask yourself if the relationship between Buffett and many of his attendees meets this definition.

Strictly speaking a cult doesn't have to be a bad thing (good ones eventually come to be known as movements, or religions), but all cults contain the potential for abuse.  Usually it's the cult leader who abuses the followers: Jim Jones, or even Bernard Madoff.  The Buffett cult is remarkable in that Buffett does this so little. 

Rather the abuse that occurs in the Buffett cult is, as Matthews shows, that which the followers inflict on themselves.  How much of their own ability to reason do they outsource to the leader?  How willing are they to question the leader on his mistakes?  How much attention is focused on who the leader is instead of on what he does ("Too much about Buffett, not enough about the businesses" is how one of Matthews' friends summed up the whole thing)?  Is there a risk of a kind of psychological Heisenberg uncertainty principle, in which the followers' close observation of their leader's behavior ends up affecting that behavior, potentially for the worse?  Finally, when the cult leader departs, as he must, what happens to the followers?  I confess that I think about this all the time because in my honest moments I'm forced to admit that I'm a member of this cult.  Furthermore, I make my living (sort of) evaluating other value investors, so the fact of the Berkshire cult complicates my professional life, forcing me always to ask "Is this person like Buffett, or more like a Buffett follower?"

Buffett emerges from this book with his repuation intact.  He is about the most benign cult leader you can be, and in fact he himself is remarkable good at self-correcting the potential deficiencies that his followers won't.  But that doesn't let us, his followers off, the hook.  The great irony of the book is that Buffett is the leader of a cult whose highest value is rationality as applied to investing, but whose followers have gotten a little irrational themselves.  To borrow from Groucho, he happily leads a club he would never join himself.

Book Review: "The Decline and Fall of the British Aristocracy"

I continue to brood over the great difficulty of growing wealth over decades, especially for families that have moved from being in business to being portfolio investors in charge of an "endowment."  The task of any endowment, which must not only provide current liquid income for the present generation but must also be invested for the future, is forbidding.  And I confess that, notwithstanding yesterday's great events, I also continue to brood over the near-inevitable decline of the United States as the world's top power, and what that means for those who hold most of their wealth here.

David Cannadine's "The Decline and Fall of the British Aristocracy" is an epic study of the political, social, and economic decline of what, as late as the 1870s, was still the richest group in the richest empire in the world.  Your consigliere, as is his weakness, cared mostly about the money stuff.  Specifically, I asked myself the following questions:  How could people who were so rich and powerful lose so much of both in such a short period?  Were there any exceptions to the rule of general decline, survivors and even thrivers worthy of study?  And, most broodingly, are there any lessons for today's financial "aristocrats," who form the wealthy elite of today's wealthiest world power?  Some impressions:

• It's remarkable just how much the wealth of the British aristocracy, and the power and prestige that followed from it, rested on just a few foundations which, once shaken, brought the whole thing down.  The main foundation of the class was wealth in the form of land, and the main foundation of land as a form of wealth was the profitability of agriculture.  Shielded from foreign competition and favorably taxed, British agriculture was very profitable from the 1840s all the way to the 1870s (about as long, I would point out, as Wall Street's long expansion, which most date from 1982).  Landowners of the time could have been forgiven for supposing such a state would continue indefinitely, and many (and their willing lenders) conducted their affairs as if it would.  Most landed estates were mortgaged or otherwise encumbered by leverage.

• Of course, the good times did not last.  An agricultural downturn began in the 1880s and did not abate for another 70 years.  Estates that could once support their mortgages (and their owners' lifestyles) fell into ruin.  The P/E ratio of land purchases collapsed and financing dried up.  Sound familiar?

• At the margin, taxes made a big difference.  Accompanying the agricultural depression in Britain were a range of new taxes on the landed aristocracy, both on income and on capital.  I'm forced to wonder how much of today's American finance aristocracy, particularly professional money management in the L.P. form (hedge funds, PE Funds, VC Funds) was helped along by favorable tax laws, and how much of that would go away if the laws were changed.

• Yes there were survivors, and even some aristocrats who managed to thrive in the new order.  Amazingly to me, in the 2008 Sunday Times Rich List you can still find a few names that once appeared on Cannadine's list of the greatest British landowners circa 1880.  And I don't think they were all simply lucky (although it helps to have started with a lot of money), so it is useful to study them.  As usual, capital allocation (really re-allocation) was key*.  As early as 1879 one lord advised his brethren to sell part of their landholdings, pay off their debt, and invest whatever proceeds remained in equities, often foreign equities.  Many did and ended up better off.  Others shifted horizontally into industries in which they already had some expertise, such as agribusiness or land development or, in the case of those who best combined good luck and skill, London real estate development (see here and here, and note that the estate of the Duke of Westminster was, during the crucial period of general aristocratic decline, unencumbered by leverage, which no doubt gave him room to maneuver).  Others could not or would not adapt.  I suspect that many held onto their land not because they truly believed "things will come back soon," but because of the tradition and prestige associated with that particular asset.  They learned a lesson that today's contemporary art collectors may be about to: when the profitability of an asset departs, its prestige departs soon afterwards.

It would be wrong to take this book as a perfect guide of things to come for the American wealthy.  But a poverty of imagination--the inability to conceive of a future different from the present--is so inherent in the human mind that it can only be overcome through conscious effort.  This particular disease seems to strike wealthy investors most strongly, those to whom good times have been the most good.  For me therefore, the study of history is a form of mental calisthenics, a way of exercising the "times will surely change and I will have to change along with them" muscle that would otherwise decay into uselessness.

* Now that I think about it, the best modern parallel to the decline of the British aristocracy may be the decline of the great 20th century media dynasties.  Like their spiritual ancestors, the current generation of media owners inherited assets (chiefly monopoly newspapers) that conferred on them both great profits and great prestige.  But the world changed around them, and what used to be widely considered the most solid form of wealth was no longer so.  Some saw it coming and managed to reallocate capital to other things (the Grahams, the Thomsons, the Murdochs) while others could not or would not for reasons of prestige, or were too busy living well to notice.

Book Review: "Benjamin Graham: The Memoirs of the Dean of Wall Street"

When the modern world gets me down, I always reach for the classics.

I tend to confuse in my head Ben Graham's story with that of his most famous protege: be born, start managing money, get rich, live happily ever after.  But Graham's life was much more complicated, both personally and professionally, with as many twists and turns as his literary hero Odysseus.  His memoirs are not a how-to guide to becoming a successful investor (that 's what this and this are), but they are inspirational to me, and a timely reminder of how one great investor survived Wall Street's darkest days.

Some tidbits:

• Graham skirted financial ruin several times, beginning at age nine when his father died, and ending when the fund he managed endured seven painful years during the Depression.

• For the manager selectors like me who have struggled to construct a psychological profile of the "ideal investor," consider that Graham did not particularly care about money, studied no finance and almost no economics in college, and was alternately extravangant and miserly in his personal expenditures.   

• He says things like this:  "Several decades were to pass, and many vicissitudes to be undergone, before I could master the simplest and most important of all the rules of material welfare:  The most brilliant financial strategy consists of living well within one's means."

Wealth, War & Wisdom, a Follow-Up Thought Exercise

Inspired by the book I just reviewed, here is a little game for those who, like money manager selectors, make their living evaluating people:

Suppose you must choose between two potential money managers, A and B.  Person A:

1)  Is very popular with all his subordinates, known for his friendliness and consideration.
2)  Is frugal in all his personal habits
3)  Neither smokes nor drinks
4)  As of the date you're considering him, enjoys a reputation for prescience and amazing judgment in his profession.

On the other hand, Person B

1)  Is rude to underlings and is unpopular among most of his colleagues.
2)  Has extravagant tastes and is careless with money
3)  Speculated on margin in his personal portfolio, with disastrous results
4)  Starts drinking before noon and continues until just before bedtime
5)  As of the date you're considering him, is considered by most to be a washed up loser, a failure in his profession.

As a professional "judge of character," on whom would you place your bet?

Person B is Winston Churchill in the late 1930s, while Person A is, at about the same time, Adolf Hitler.

Wealth, War & Wisdom

Barton Biggs is known for his years as a highly regarded, and highly quotable, investment strategist at Morgan Stanley.  In 2003 he left that firm to form a hedge fund called Traxis Partners, and wrote a fun and popular book called "Hedgehogging" about that world.

Less fun and less popular was the book he published in 2008, called "Wealth, War & Wisdom."  It's a little all over the place--part narrative history of the greatest events of World War II, part mini-biography of that war's leaders, part stock market history, part argument for the wisdom of crowds, and part disaster survival guide.  However I think behind it all is a unifying insight.  Although he doesn't express it in so many words, and I'm going to have to stretch some definitions in order to argue my point, I believe the book is ultimately about liquidity vs. illiquidity, about safe vs. risky assets, as broadly understood. This unifying insight is very useful for our mythical family patriarch, on whose investing success over 100 years the fate of civilization depends.

To start with one of Biggs' main points:  For the preservation and growth of purchasing power over long periods, equities are the place to be relative to "safer" assets like government bonds and cash, even during periods of crisis like war and even, a little surprisingly, for the defeated countries.  They best allow you to benefit from compounding (of companies' retained earnings) and are the best, although still imperfect, long-term inflation hedges. 

However, to get the superior returns available from equities requires that you commit to holding equities.  As David Swensen points out in the introduction:

. . . investors benefit from the long-run returns in the stock market only if investors own stocks.  Maintaining exposure to the stock market requires the courage to hold (or even add to) positions in the face of extreme adversity. 

In other words, don't be fooled by what Keynes called "the fetish of liquidity."  Stocks may be liquid as conventionally defined--you can sell them whenever you want--but successful equity investment, for the vast majority of investors, requires a deliberate embrace of illiquidity.  Furthermore, especially during wartime, liquidity has a disturbing tendency to evaporate, or exact a terrible penalty, just when you need it.  Great Britain essentially confiscated its citizens' holdings of US securities in order to raise badly-needed foreign exchange during the war.  Even without the government getting involved, chances are that when you desire the liquidity the most, everyone else does too--just read today's newspaper.

That's not a particularly new or interesting insight.  What is interesting is that Biggs makes this argument alongside many stories of people--many of them the patient, long-term investors whom Biggs and Swensen would ordinarily praise--whose wealth and lives were destroyed by the war.  It seemed incoherent at first, but as I thought about it I came to understand what Biggs was trying to say:  Your embrace of illiquidity/"risky" assets in one sphere must be balanced, or hedged, by great liquidity, broadly defined, in another. 

This is true most simply in the literal financial sense.  You can't get the benefits of long-term equity investing without having sufficient liquid assets, either cash reserves or secure cash income, to meet your needs while you're waiting.  And "to meet your needs" includes all debt service obligations, including the dreaded margin debt, which, as Biggs points out, undid even Keynes himself.

But it's also and more crucially true in the metaphorical sense of liquidity.  If literal liquidity refers to the ability to exit an asset quickly and without financial penalty, then by metaphorical liquidity I mean the ability to exit a geographical location like a country, a lifestyle, even a conception of oneself, in a similar way.  Many a German Jew lost his fortune in the war because he was long an asset that the Nazis rendered illiquid through punitive taxes and capital controls.  But how many lost their lives because they were illiquidly long Germany itself and their place in it, with neither the physical (assets in a safe haven country, jewelry to sell on the black market) nor the psychological (the ability to leave your comfortable life behind and start again) means to exit?

If you, like our family patriarch, are investing for the next 100 years, then there is little doubt that you will endure a war, maybe more than one.  History shows that the time to think about it is well before it happens, as events nearly always overtake you.  The books has many concrete suggestions about what to do but I think the main point is that you must combine illiquidity and liquidity, literal and figurative, in order to preserve both your wealth and yourself.

Arnault and Armani

This weekend's FT has a short profile of Bernard Arnault of LVMH.  "There is nothing so dangerous as the pursuit of a rational investment policy in an irrational world," said John Maynard Keynes, but Arnault has proved the exception.  Aside from Hollywood, luxury fashion may be the most unbusinesslike business in the world.  Yet Arnault has managed to succeed at it like no one else.  So he's worth studying.

Also worth studying, I think, is Giorgio Armani, the subject of a new biography.  I'm not in a position to judge his contributions to fashion, but I can say that on the business side, he may be the most successful founder-owner-operator in fashion history.  Not that the bar has been set that high in this industry, mind you, but to me that only makes Armani's accomplishments more remarkable.  The history of fashion shows that it's almost impossible to unite creative and marketing genius, business sense, and . . . um, the Protestant work ethic in one person.  Among American designers, Calvin Klein and Donna Karan both ran into business problems.  Ralph Lauren is a great businessman but not considered a great or original fashion designer (Going back in time, I'd put Oleg Cassini in this category as well).  Halston and Marc Jacobs were undermined by personal problems.  In Europe the Tom Ford/Domenico de Sole partnership at Gucci had great success, but lacked longevity (although they're back together again, so stay tuned).  The Yves Saint Laurent/Pierre Berger and Valentino Garavani/Giancarlo Giammetti partnerships also enjoyed great success but on a much smaller scale than Armani.  Armani's rival Gianni Versace excelled at the fashion side but not the business side. 

To the student of business, Armani is the best.  From scratch he built, completely organically with no acquisitions, a company worth about $5 billion, which he continues to own outright, with no strategic need to sell out to LVMH or PPR or anyone else.  Apparently it has no debt, and maintains a large cash reserve at all times.  Yes, he is the best.  His company is the one Buffett would buy if Buffett were ever to buy a fashion business!  Only a blogger could ever say anything so crazy, but stranger things have happened.

Update:  A 2006 WSJ interview with Giorgio Armani.

Investment Idea: Private Equity and Japan (and a Book Review)

Though my background is in hedge funds, I've been training my consigliere muscles to see if they can be useful in the world of private equity.  My working hypothesis is that the private markets/public markets distinction is kind of an illusion, that my ability to evaluate a business and its management, make sure it's behaving like a long-term owner, and avoid overpaying can be applied to public companies as well as private ones, or even to VC investments.  If you look at it this way, Wal-Mart under Sam Walton was essentially a private equity investment, even though the company was public.  Conversely, a PE deal like Hertz in hindsight looks more like a stock trade.  The point is, its the skill set that matters, not the label.

So I'm trying to learn about private equity and the people who do it well.  Coincidentally, I'm also interested in Japanese private equity in particular:  There is this chart on page 23 of the 5/20/08 edition of Outstanding Investor Digest that tracks the Nikkei 225 Index vs. Japanese 10-yr government bonds since 1986.  It basically shows that stocks have gone nowhere, while bond yields have trended down.  If you assume that the earnings of Corporate Japan have been increasing, albeit slowly, throughout this period, then that implies that the earnings yield (the inverse of the PE ratio) of the Nikkei has been trending up.  It also implies that the spread between the corporate earnings yield and corporate borrowing rates (which key off government bond interest rates) is historically high.  PE firms make their living by borrowing at low rates and investing at high earnings yields, so this should be a good time for PE in Japan, right?

So I have two projects:  a) Studying the great PE investors and b) investigating PE in Japan. 

This book helped me do both:  Saving the Sun:  How Wall Street Mavericks Shook Up Japan's Financial World and Made Billions by Gillian Tett of the FT.  A lot of it is specific to Japanese banks but it's interesting nonetheless.

By the way, here's an FT profile of Flowers by Tett from October 2007.

Here's a short announcement about Morgan Stanley strengthening its Japanese private equity business.

Soros Biography

When I was in college I flirted briefly with global macro investing before marrying value.  I've remained fascinated by George Soros though, especially given his ever higher profile and his philanthropic efforts.  What's good about the book Soros: The Life and Times of a Messianic Billionaire by Michael Kaufman is that a) Soros cooperated with it (although strictly speaking it's not an authorized biography, and b) Soros didn't write it himself.  If you've ever tried reading Soros' writings you know they are . . . elusive.  But when he talks about himself to someone else he's very candid and you can get a lot out of it.

I didn't read the book for insights into Soros' investment strategies: Kaufman is not a finance expert, and Soros' methods stubbornly resist explanation by him or anyone else (his own son once said "at least half of this is bullshit," and revealed that his father's aching back is a better guide to his behavior than any articulated theory).  I was more interested in his back story and his makeup, the "psychology of success" which I must confess is the reason I read most biographies.  In Soros' case I was struck by the following:

• Until Soros was about 25 years old he was pretty much a loser: he got mediocre grades and could barely hold a string of mediocre jobs.  Even in his first finance job he sucked.  Once he found his groove though, he was immediately successful.
  
• Even when he was poor and ignored and a loser, he sort of arrogantly cherished a messianic vision of himself and fantasized about great achievements.  That he was freely aware of this dichotomy is the key to his charm.
• His first success in finance came as a pure arbitrageur, a "scalper" so to speak, someone who took advantage when a given asset traded at a different price in two different markets.  This seems a long way from the global macro bets he's famous for.  On the other hand it reminded me of something Edward Lampert once said about his early days as a risk arb at Goldman Sachs.  He said that being required daily to analyze various risks (usually merger deals), often with incomplete information, was "like shooting layups or foul shots."  It was the best training possible.
• In all of its spheres (finance, philosophy, philanthropy), his life has been characterized on the one hand by great boldness and self-confidence and willingness to make big bets, and on the other hand complete self-awareness of his own fallibility and tendency to be very wrong. An intensely self-critical messiah.  It reminds me of something I read David Glass, former CEO of Wal-Mart, say about Sam Walton:

"Two things about Sam Walton distinguish him from almost everyone else I know.  First, he gets up every day bound and determined to improve something.  Second, he is less afraid of being wrong than anyone I've ever known.  And once he sees he's wrong, he just shakes it off and heads in another direction."

• As good a money manager as he is, he had a terrible time picking a successor, hiring and firing a long line of them.  There's a difference between a great investor and a great "investor in investors."
  

Some other fun facts:

• Jim Rogers, Soros' former partner who's now a well-known author and TV personality, is in Soros' eyes kind of a psycho.

• And my favorite quote:

"What I was doing was to some extent intuitive.  I would look at the figures and I would feel things.  I never actually learned  to analyze a company.  I mean I did not have the analytical skills that a normal analyst has.  In fact there came a point when they introduced a certificate for security analysts, a sort of professional qualification.  After avoiding it for a while I sat for the exam and I failed in every conceivable topic.  At that point I told my assistant that he would have to take it and pass it."

If thirty years ago one of my clients had called me and said "Consigliere, should I invest my money with Soros?" I would have answered no without hesitation.  After hanging up the phone though, I would have tried to invest my own money with him.   

Book Review: Winner Take All

The full title is Winner Takes All:  Steve Wynn, Kirk Kerkorian, Gary Loveman, and the Race to Own Las Vegas by Christina Binkley.  It's awesome:  part case study of the gaming industry, part biography of three very different men who each found success in Las Vegas.  But it reads like a story--you can read it on a plane, or if you're (hypothetically) stuck in the hospital an extra day post-surgery because your stupid calcium level is one billionth of a ml too low and the doctor who's filling in for your real doctor won't release you. Hypothetically.

Those casino owners have a lot of fun.  Actually they don't own the casinos, their shareholders do.  But where are the money managers' showgirls?