Originally published in 1940, Mortimer J. Adler’s How to Read a Book offers timeless lessons for investors in today’s information era. Most material that comes across our desk throughout the day is read simply to collect information. We read the WSJ, FT, and NYT daily. We read magazines, industry rags and analyst reports. We swipe through hundreds of blog posts, Twitter feeds and probably a dozen other tools I haven’t heard of yet. There is no shortage of new information. Yet, new insights are rare. The essential purpose for reading, according to Adler, is to gain understanding. Collecting data in itself does not increase our understanding. This is an important distinction.
According to Robert G. Hagstrom, author of Investing: The Last Liberal Art, “There is a simple way to tell the difference between collecting information and gaining understanding. Any time you read something and find you can easily “get it,” chances are you are just cataloging information. But when you come across a work that makes you stop, think, and reread for clarification, chances are this process is increasing your understanding.”
“The process of moving from understanding less to understanding more is a critical journey for anyone who wishes to gain wisdom. It is not a simple matter of reading one book, setting it aside, and reaching for the next one. Achieving real understanding requires you to work, to think.”
In order to read intelligently, you should always evaluate material from the perspective of these four fundamental questions:
1. What is the book about as a whole?
2. What is being said in detail?
3. Is the book true, in whole or part?
4. What of it?
I find the combination of Evernote and Kindle extremely powerful in cataloging notes and constructing mental models which make connections across The Broyhill Library. In recently reading Hagstrom’s book, I was reminded of how powerful this exercise can be. What follows is a series of excerpts from Investing: The Last Liberal Art, which can provide as a guide in answering these four fundamental questions:
To determine, as quickly as possible, what the book is about (question 1), Adler suggests a fast review. First, read the preface. Here the author typically gives a brief explanation of the book, the rationale for writing it, and perhaps an outline of what to expect. Next, look carefully at the table of contents; it will give you a good overview of what the book is about. Then turn to the back and run through the index, looking for familiar as well as unfamiliar terms. This will give you a sense of the book’s major topics. You can also learn much about the book from its bibliography. Do you recognize the names of the authors referenced and have you read any of their work? Then read a few paragraphs here or there, perhaps from a section that discusses a topic you are somewhat familiar with. After that systematic skimming, turn to the very end and read the author’s summation of the book, if there is one.
This entire exercise, from reading the preface, table of contents, index, and bibliography to systematically skimming, should take at most thirty minutes to an hour . . . At the end, you should know what the book is about as a whole, and that will tell you whether you wish to take your valuable time to read it.
If you do, Adler suggests you start with a complete but somewhat superficial reading. Here you will begin to answer the second fundamental question: What is the book about in detail? That will tell you whether you want to invest the time for a serious, analytical read. The goal now is to get through the book without getting bogged down in small distractions such as unfamiliar vocabulary. Pay attention to what you understand, and skip over the parts that are difficult. Caution: This requires concentration. Even though you are skimming the book, you should not let yourself daydream. Stay alert and focus on what you are reading so that you can comprehend the basics of the material. Adler suggests we adopt the role of a detective, constantly looking for clues that will tell us if the book deserves a deeper examination. If it does, you move to what Adler calls analytical reading, the most thorough and complete way to absorb a book. Through analytical reading, you will reinforce your answers to the first two fundamental questions (what the book is about as a whole and in detail), and you will begin to answer the third question: Is the book true?
Analytical reading has three goals: (1) to develop a detailed sense of what the book contains, (2) to interpret the contents by examining the author’s own particular point of view on the subject, and (3) to analyze the author’s success in presenting that point of view convincingly.
You may find it helpful at first to approach analytical reading the way you would approach assigned reading in a college class. Have a notepad at hand, and make your own outline of the key topics, chapter by chapter. Write down, in your own words, what you deduce is the author’s main purpose in writing the book. List what you think are the author’s main primary arguments, and then compare that list against the outline of contents. Decide for yourself whether the author has fulfilled the original goals, defended the arguments, and convinced you of the main thesis. Ask yourself whether the author seems illogical or presents material that you know from other sources is inaccurate. If something seems incomplete or unsatisfactory, does the author candidly acknowledge that a full answer was not possible, rather than trying to bluff the readers?
The detailed examination of the book that you perform with analytical reading will also begin to answer the fourth fundamental question: What of it? That is to say, what is the significance of this material? A full answer to that question, however, comes only at a still-deeper level of reading, what Adler calls synoptical reading, or comparative reading. In this level of reading, we are interested in learning about a certain subject, and to do so we compare and contrast the work of several authors rather than focusing on just one work by one author. Adler considers this the most demanding and most complex level of reading. It involves two challenges: first, searching for other possible books on the subject and then deciding, after finding them, which books should be read.
Once you have identified the subject you wish to study, the next step is to construct a bibliography. Depending on the subject, the bibliography might include a few books or many. To read that number of books analytically would take months, maybe years. Comparative readers must use shortcuts, inspecting each book to ensure it has something important to say about the subject and then discarding less relevant ones.
The first step in comparative reading is to locate the relevant passages in each book. You are not doing a full analysis of each book individually but finding the important parts of each separate book that relate to what you need to know. This is a fundamentally different approach from analyzing a book in its entirety. In analytical reading, you accept information from the author as it is given; in comparative reading, your investigation must serve your own needs.
Develop your list of questions, expressed in your own language, and analyze how well the selected books answer those questions. Do not be dismayed if the authors give different answers to your questions, but do take the time to determine the context for each author’s answer.
The final step in comparative reading is analyzing the discussion among all the authors. Be careful not to take sides but to let the debate between authors unfold with some objectivity. Of course, perfect objectivity is rarely possible, but the more you can resist jumping to conclusions, the better will be your overall understanding. At the end, you will have answered the last of Adler’s fundamental questions: What of it? Is this material important to me, and does it require me to learn more? Looking back over Adler’s complete program, we take note of the connections he has carefully built. Each level of reading is connected to the next, and the process is cumulative. We cannot hope to reach the highest level of reading until we master the earlier ones.
The challenge for us as readers is to receive that knowledge and integrate it into our latticework of mental models. How well we are able to do so is a function of two very separate considerations: the author’s ability to explain, and our skills as careful, thoughtful readers. We have little control over the first, other than to discard one particular book in favor of another, but the second is completely within our control.