2025 Summer Reading
September 1, 2025
My two daughters were especially busy with their own stuff this summer. So, less vacation, more work for me!
Here are the most interesting things I read and studied:
1. An in-depth study of Nike Inc. (NKE):
a. Shoe Dog by Phil Knight
b. just do it by Donald Katz
c. NKE Fiscal-year 1981-2025 annual reports
As an investor, I like to study companies that I can understand, that have been around for a long time and perhaps most importantly - that are currently out of favor in the stock market. Nike fits the bill.
After a stellar run through 2021, NKE shares declined by over 70%. Despite a recent rebound, the stock is still over 55% below its all-time high. The reasons for the stock price decline? A lack of innovation and rising competition. Company profits are roughly half of their peak.
Can the course of this wayward ship be corrected?
Predicting a turnaround in business is always difficult. But it’s in my temperament as an investor to give it a shot.
So, I dove in.
I began with a re-read of Phil Knight’s memoir, ‘Shoe Dog’, which is hands-down one of the best business biographies that I have read. Like many great companies and entrepreneurs, the Nike story only exists because of the founder’s sheer determination. Knight writes in the book:
“That morning in 1962 I told myself: Let everyone else call your idea crazy... just keep going. Don't stop. Don't even think about stopping until you get there, and don't give much thought to where "there" is. Whatever comes, just don't stop. That's the precocious, prescient, urgent advice I managed to give myself, out of the blue, and somehow managed to take. Half a century later, I believe it's the best advice maybe the only advice—any of us should ever give.”
Don Katz wrote in ‘just do it’ – “In 1968, Phil Knight stated that some company will become the IBM of the sports-apparel industry within the next five years.”
Knight clearly expected Nike to be the one.
Quoting Knight in 1993, Katz wrote “We determined that we wanted Nike to be the world’s best sports and fitness company, and the Nike brand to represent sports and fitness activities. Once you say that, you have focus.”
With this extreme focus, Nike generally went from success to more success. However, it’s the company’s history of dealing with setbacks that is perhaps most instructive to us as investors. Let me share one example.
1985 was the company’s worst year since its very early days. Knight, who had relinquished day to day operations of the company in 1983, took over as President again and rapidly worked on the company’s bloated inventories, cost structure and various management issues. He frankly admits to missing a major change in the market as the company grew rapidly and as he removed himself from operations.
Knight’s candor in describing negative developments is unique and refreshing. Few company reports offer such honest accounts of happenings to shareholders.
NKE’s annual reports are excellent. If ‘Shoe Dog’ is the prequel to the NKE story, Phil Knight’s annual letters tell us all about the main event. They are an excellent account of the company’s progression over the decades since going public.
Another great attribute about Knight, who previously studied and worked as an accountant, is that he thinks like an investor. NKE annuals regularly showed five-year charts on the company’s margin progression and returns on capital. Ongoing progression in these metrics justified the company’s constant reinvestment of profits into the business.
Knight would also show the trend in year-end valuation (as measured by the price/earnings ratio). Valuation would dictate his ‘unbalanced’ allocation of capital. That is, NKE was aggressive re-purchaser of shares on the cheap and otherwise quiet – precisely what we would hope for as investors. Through this practice, the company shrunk its share count by 40% since 1990.
It also helped that Knight owned a massive portion of the company. Owner-operators almost always have an edge in creating long-term shareholder value. Everything from managing company growth, management structure and capital allocation seems to be better in such situations.
NKE, until very recently, also had clearly disclosed yearly financial goals (high single digit revenue growth and mid-teens earnings growth). The only other company I have studied with such goals over the long-term is medical device company Stryker, which for decades was run by its legendary owner-operator CEO John Brown.
As we know, NKE would go on to be a great company, but it encountered further bumps in the road - in the late 90s and most recently in 2024-2025. Financial strength as measured in a clean balance sheet (essentially zero net debt - which is the norm for NKE) helped the company weather both 1985 and subsequent storms. Through all its vicissitudes, the company has never been in financial distress.
The present circumstance for NKE is quite interesting. Similar to when the Board appointed long-time executive Mark Parker to become CEO in 2006 (following a short and difficult tenure by an outside CEO), the company has now chosen a former NKE ‘lifer’ in Elliott Hill as CEO (to replace another short-tenured outside CEO) with the task of turning the company around. Perhaps, this is the best alternative when an owner-operator can no longer run a business. Knight himself retired as company chairman in 2016.
While long removed from the day-to-day operations of Nike, Knight (in Shoe Dog) reminds us of the premise behind the company’s founding:
“When you make something, when you improve something, when you deliver something, when you add some new thing or service to the lives of strangers, making them happier, or healthier, or safer, or better, and when you do it all crisply and efficiently, smartly, the way everything should be done but so seldom is you're participating more fully in the whole grand human drama. More than simply alive, you're helping others to live more fully, and if that's business, all right, call me a businessman.
Maybe it will grow on me.”
My study of NKE continues. However, my gut instinct after doing much of the work is that the company will successfully turn around its business trajectory yet again.
I will be reading several years of conference call transcripts to finalize my work on the company.
Let’s move on to some other summer readings.
2. A couple of books by William Zinsser on how to be a better writer:
a. On Writing Well - The Classic Guide to Writing Nonfiction
b. Writing to Learn
Zinnser’s central tenant is that any subject can be brought within the grasp of the common man if written about clearly. On the subject, he writes:
“Reduce your discipline – whatever it is – to a logical sequence of clearly thought sentences. You will thereby make it clear not only to other people but to yourself. You will find out whether you know your subject as well as you thought you did. If you don’t, writing will show you where the holes are in your knowledge or your reasoning.”
Atul Gawande, the physician and famous author, said the following about writing in his book ‘Better’:
By offering your reflections to an audience, even a small one, you make yourself part of a larger world. Put a few thoughts on a topic in just a newsletter, and you find yourself wondering nervously: Will people notice it? What will they think? Did I say something dumb? An audience is a community. The published word is a declaration of membership in that community and also of a willingness to contribute something meaningful to it.
So, choose your audience. Write something.
3. The History of the Standard Oil Company (Abridged version) by Ida Tarbell
Earlier this year, I decided to read everything I could about oil.
It’s really amazing how Tarbell exposed the monopolistic behavior of the Standard Oil Company in the early 1900s. Her attention to detail and ability to connect the dots of John D. Rockefeller’s sprawling conglomerate were amazing.
According to Wikipedia, “the book was first published as a series of articles in McClure's from 1902 to 1904. The work contributed to the dissolution of the Standard Oil monopoly and helped usher in the Hepburn Act of 1906, the Mann-Elkins Act, the creation of the Federal Trade Commission (FTC), and the passage of the Clayton Antitrust Act of 1914.”
Perhaps in the not-too-distant future, a similarly astute journalist will ‘take down’ one of the big tech companies that monopolizes its markets.
4. A couple of books on Hetty Green
a. Hetty - The Genius and Madness of America's First Female Tycoon by Charles Slack
b. The Richest Woman in America - Hetty Green in the Guilded Age by Janet Wallach
Before Warren Buffett, there was Hetty Green.
From Wikipedia: “Henrietta "Hetty" Howland Robinson Green (November 21, 1834 – July 3, 1916) was an American businesswoman and financier known as "the richest woman in America" during the Gilded Age. Those who knew her well referred to her admiringly as the "Queen of Wall Street" due to her willingness to lend freely and at reasonable interest rates to financiers and city governments during financial panics.”
“Her extraordinary discipline during such times enabled her to amass a fortune as a financier at a time when nearly all major financiers were men.”
“As a highly successful investor, with a Wall Street office, she was unusual for being a woman in a man's world. Unwilling to participate in New York City high society, conspicuous consumption, or business partnerships, she may have been eccentric and curt with the press, but she was a pioneer of value investing.”
5. Who Knew by Barry Diller
Media mogul Barry Diller took his time writing his fabulous memoir – 10 years to be exact! And then he re-worked on the manuscript based on suggestions from friends for another 5 years.
I found this book to be a treasure trove of both personal and professional advice. I put Diller’s book right up there with Phil Knight’s ‘Shoe Dog’ and Ken Langone’s ‘I Love Capitalism’ in terms of the best business biographies I’ve read in the past 10 years.
I highlighted over 30 separate passages in my Readwise app while reading the book. Here is my favorite quote:
“To be truly independent, beholden to no one but yourself, unprotected by the mothering of a corporation-for a lifelong employee that's a daunting proposition. And thus those words - Either you are, or you aren't were banging around my head with increasing force. You can do all the things executives have done since executive-ing began, fantasize and rationalize all you want and I was a most practiced player at all that-but that binary about independence rules: Either you are, or you aren't.”
And another:
“I've never been a particularly good shepherd of repeating or sustaining any norm. I always thought conventional wisdom was... well, conventional, and therefore uninteresting. Those two principles never done before and never done quite this way-have always got me going. If ideas don't have qualities of either I'm just not very engaged. Without my ferocious curiosity and focus aroused, I'm just like the next dullard.”
6. Concentrated Investing: Strategies of the World's Greatest Concentrated Value Investors by Allen Benello and Tobias Carlisle
This is the 7th year in a row that I’ve read this book! As a ‘focus’ investor, it’s my north star. A few key quotes:
“We do believe that the average enterprising investor with the ability to perform in-depth fundamental analysis will be better off trimming the number of investments they hold and redistributing their capital into their top 10 or 15 ideas.”
“Says Buffett of the ‘know-something’ investor: If you are a know-something investor, able to understand business economics and to find five to 10 sensibly priced companies that possess important long-term competitive advantages, conventional diversification makes no sense for you.”
“As a focus investor, your goal is to reach a level of understanding about your business that is unmatched on Wall Street. You may protest that this is unrealistic, but, considering what Wall Street promotes, it may not be as hard as you think. If you are willing to work hard at studying businesses, you will likely get to know more about the company you own than the average investor, and that is all you need to gain a competitive advantage.”
“The corollary to knowing a great deal about the positions in the portfolio is ignoring a lot of noise. That’s the beauty of being a concentrated investor. You can look at everything, but you don’t have to have an opinion on everything. Until you really say, “Wow. I believe this is a great opportunity, you don’t have to come to a conclusion. You don’t have to guess the ones where you feel unsure.”
7. Mark Twain by Ron Chernow
The most amazing fact I learned in reading this book was that in his transient role as a publisher, Mark Twain helped a dying President Ulysses Grant finish his memoirs. I haven’t read much Civil War history but am now thoroughly enjoying reading The Annotated Memoirs of Ulysses S. Grant by Elizabeth D. Samet, a book that was published in 2019. Grant’s memoir was extremely successful in his time, and the financial proceeds would help support Grant’s family after his death.
8. So Very Small by Thomas Levenson
In addition to business and finance, I enjoy reading about medicine and healthcare.
This was the best book I read this summer – period. It chronicles the history of infectious disease and epidemics over the centuries. Cholera, the plague, purpureal fever, tuberculosis, polio. These diseases were death sentences in most cases and would spread like wildfire. Despite the microscope being invented centuries earlier, it would take hundreds of years of human misery before the definitive link between micro-organisms and human disease was established.
For perspective, it has been less than 100 years since Penicillin was discovered by Alexander Fleming!
Today, a wide variety of anti-microbials are available for almost every conceivable infectious disease. Regardless of one view on vaccines, the mere widespread availability of such an invention is a huge advance for humankind.
Here are a few other excellent books that I recently read:
9. How Not to Invest by Barry Ritholtz
10. The Millionaire Mind by Thomas Stanley
11. The Greatest Capitalist Who Ever Lived - Tom Watson Jr. and the Epic Story of How IBM Created the Digital Age by McElvenny and Wortman
12. Breaking Rockefeller - The Incredible Story of the Ambitious Rivals Who Toppled an Oil Empire by Peter Doran
13. Brain Surgery by Keith Black, MD
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