Reading the dive briefings of the dead

There is a folder I have started keeping, on a USB drive, of dive briefings written by people who are dead.

Some of them died diving. Most of them did not. The briefings are mostly from the 1960s and 1970s, the early decades of recreational scuba, when the procedures were still being written and the cost of a procedural failure was directly observable. They are mostly mimeographed, scanned, and uploaded by someone who was thoughtful enough to put them where they could be found. The writing is bad. The procedures are blunt. The illustrations are hand-drawn. They are the most useful diving literature I have read.

I want to write about why, because I have started doing the same thing with old books about money, and the reason is the same.

A briefing is a document written before a dive about what is about to happen. It assumes that the people reading it will, in some small fraction of cases, not survive the dive. The job of the briefing is to make that small fraction smaller. The briefing accomplishes this by being precise, repetitive, and unembarrassed about stating things that everyone in the room already knows.

The best briefings are the ones that catalogue failure modes the writer has seen. They are written by people who have stood next to the dive that did not work and watched the moment in which the procedure was supposed to hold and did not. They are written, in other words, by people who have done the post-mortem already. The briefing is the post-mortem fed back into the front of the next dive.

The reason I keep the folder of briefings by dead authors is that the briefings written by people who are still alive are too cautious about what they describe. The dead authors had less to lose. The dead authors had seen enough that they wrote in the imperative without qualifying. The dead authors did not soften the procedure with phrases like in most cases or as a general guideline or depending on conditions. The dead authors wrote: do this, then this, then this, and if you do not, here is the thing that will happen, and here is how I know.

The financial equivalent of the dive briefing of the dead is the old book about money written by someone who has watched the dive that did not work and has nothing to lose by saying so.

I have been reading these books slowly, because I am seventeen and I do not yet have the experience to absorb them at full speed. The list I keep returning to is short.

There is Lefèvre's Reminiscences of a Stock Operator, which is the autobiography of a speculator written through a fictional veneer. The book is from 1923. The speculator at the centre of the book lost the bulk of his fortunes twice. The procedures the book describes are mostly about the moment in which the speculator's own judgment turned against him, and he did not notice. The book is, in essence, a hundred-page dive briefing on the failure mode of confusing being right about the market with being able to time the market.

There is Mackay's Extraordinary Popular Delusions and the Madness of Crowds, which is from 1841. It is, on the surface, a catalogue of historical bubbles. It is, underneath, a briefing on what happens to procedure when the surrounding social environment makes the procedure look foolish. The chapter on the South Sea Bubble is the same dive twice. The first time it is funny. The second time it is the dive you are on right now.

There is Galbraith's The Great Crash 1929, which is a brisk autopsy of the dive that did not work in October of 1929. The book is unsentimental. It names the people who made the wrong calls, the structural setups that made those calls cheap to make, and the institutions that failed to catch the drift. It is, in form, exactly a briefing. It reads like a dive briefing, with the difference that the dive in question has already happened and the only people available to read the briefing are the descendants of the divers.

There is Keynes's chapter twelve, which is the chapter of The General Theory about the long-term expectation of returns. The chapter is from 1936. It is short. It is the dive briefing for a kind of dive that almost nobody does well, which is the dive of holding a position against the social pressure of being seen to hold it.

And there is, finally, the most direct briefing of all, The Intelligent Investor by Graham. The book is mostly known for its chapter on margin of safety, which has been turned into a slogan that has lost most of its original force. The original force is in the surrounding chapters, on the distinction between investing and speculation, on the way Mr Market is a person you can choose not to listen to, and on the operational procedure of how a defensive investor should run a portfolio. The book is, in structure, a dive briefing. It tells you the procedure. It tells you the failure mode. It tells you what to do when the procedure is hard. It does not soften any of it.

What all five books share is a quality the diving briefings share. They were written by people who had watched the dive that did not work. They were written, in some cases, by people who had been on the dive that did not work, and had been the ones whose procedure had failed. They are written without the hedges that contemporary financial literature is full of. They make claims. They name failure modes. They are, in the most literal sense, briefings.

I have started doing two things with these books.

The first is reading them slowly. I read one of them, then I put it down for a month, then I come back to the same chapter and read it again. The dive briefing on the first read is a thing you understand intellectually. On the second read, two months later, with some new piece of experience attached, the briefing reads differently. Lines you skipped become lines you underline. Lines you underlined become lines you cross out. The briefing rewrites itself against your most recent experience, and you discover what the briefing was actually telling you.

The second thing I have started doing is keeping a one-page summary of each book in a notebook. The summary is not the contents of the book. The summary is the failure mode the book is briefing me on, in one sentence, written in the imperative.

Lefèvre: do not confuse being right about the future with being able to time the present.

Mackay: assume that the procedure that protects you in normal conditions will look foolish during a bubble, because if it did not, it would not be a procedure.

Galbraith: a system that prevents most failures will permit a large one if its components are individually rewarded for inviting it.

Keynes: the part of investing that is hardest is holding a position against the social pressure of being seen to hold it, and that is also the part of investing that compounds.

Graham: the market quote is a service offered to you, not an instruction issued to you, and you are allowed to ignore it.

Each of these is a dive briefing. Each of them was written by someone who had seen, or been, the dive that did not work. Each of them is more useful than any contemporary article on the same topic I have been able to find.

There is a real place where this analogy fails, and I want to name it.

A dive briefing is, in principle, complete. The diver can read the briefing, follow the procedure, and have done everything that could be done. There is no part of the briefing that is missing. The procedures cover the failure modes that the field has observed. The procedures are taught by instructors who have themselves been briefed. The whole system is finite and closed.

A financial dive briefing is not complete. The procedures cover the failure modes that have been observed. They do not cover the failure modes that have not yet happened. The next bubble does not look like the previous bubble. The next drawdown does not look like the previous drawdown. The new failure mode has new clothes. Mackay's South Sea Bubble does not, on its face, look like the dot-com bubble, which does not, on its face, look like the 2021 SPAC and crypto wave, which does not, on its face, look like whatever the next one will be. The clothes are different every time. The skeleton is the same.

This is why the briefings have to be read in the plural. No single briefing covers the next dive. The whole library covers it. The diver who has read five briefings can recognise a sixth, because the briefings, taken together, train an eye for the shape of the skeleton under the clothes.

The way I read these books has changed how I read contemporary financial writing. I am much slower to take a single contemporary book or essay as a procedure. I am much faster to take a dead author as a procedure. The dead author has been audited by the most expensive auditor available. The contemporary author has not. The dead author is also, by definition, unable to update the procedure against the next failure mode, which is exactly why the dead author's procedure is in the imperative.

The dead authors are the best briefing partners available, because they have nothing left to lose. They have already paid the cost of the dive that did not work. They are speaking from after that dive. They are speaking in the voice that the survivors of the dives that did not work tend to speak in, which is the voice the people on the boat after a bad dive use to brief the next boat.

I am, in writing this site, trying to write toward that voice. I am too young for it. I do not have any of the cost the dead authors have paid. The most I can do is read them carefully, summarise them in the imperative, and write down what I think the next dive is, in advance, while my procedure is still cheap to write.

If you want to find the folder I keep, it is not on the site yet. The list is in this essay. The list is the start. If you read the books slowly, and write the summaries in the imperative, and put each summary on the wall above your desk, you will end up with the same folder I have. You will have built your own briefing.

The dive briefing of the dead is the closest thing finance has to a flight log. The flight logs are public. The procedures are written down. The procedures are not soft. The procedures will not change to flatter you on a day when your position is uncomfortable. The procedures were written by people who have already paid for them, and the price for you is the price of reading, which is small.

The price for not reading is what they paid.