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Book recommendations, investing strategy ideas from Baillie Gifford

One of the company traditions at $252 billion Baillie Gifford is a reading day, during which investment teams discuss books they have been reading.

While this might seem to have nothing to do with their work, the goal is to foster diversity of thought. After all, one way to beat the market as an investor is by finding ideas that aren’t popular with the crowd.

“You learn so much and get depth by reading books,” Andrew Telfer, one of two senior partners at the firm, told Business Insider in a recent interview.

He added: “Media can be quite short term. If that’s what you spend your time reading, then you don’t get the depth from reading books. It really does make a difference.”

This outside-the-box thinking is part of the firm’s recipe for success. It was an early investor in Amazon, Alphabet, Salesforce, Airbnb, and various other tech companies that are now global powerhouses.

Read more: A senior partner at Baillie Gifford shares what Tesla, Amazon, and the firm’s other wildly successful investments have in common — and how it identifies them early on

Its base in Edinburgh also creates a unique advantage relative to other investment firms.

“We’re not in New York or London where the pressures are different and the timescales for people, companies, media — everything — is just different,” Telfer said.

This all adds up to a company culture that encourages its investors to always think outside the box and for the long term.

To practice what the firm preaches, Telfer himself is an avid reader. He shared with Business Insider five non-finance books that he found particularly instructive. All quotes below are attributed to him.

1. “Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration” by Ed Catmull

“It’s about culture in an industry where you make a lot of mistakes, and how you deal with that.

“You’ve got creative people who are coming up with ideas, and then you’re saying, ‘That’s a good idea, but it’s not good enough.’ How do you then motivate people?

“From an investment-management point of view, look outside your industry and look at other people who are creating cultures that are really helpful like that.”

2. “The Idea Factory: Bell Labs and the Great Age of American Innovation” by Jon Gertner

“It’s not necessarily the greatest page-turner, but it’s really interesting in terms of Bell Labs and how they had people from different disciplines who created ideas because they were from different disciplines.

“A lot of the discoveries in the last decade have been where different disciplines meet. And so you’ve got people who have deep knowledge in a specific area but combine that knowledge to create something interesting.

“How do you create an environment for that to happen? How do you organize your floor so people can bump into each other?”

3. “The Perfect Weapon: War, Sabotage, and Fear in the Cyber Age” by David E. Sanger

“We’re about to open our office in Shanghai, and some of our American clients particularly are saying, ‘Be very, very careful about your cybersecurity — what data you put there, how you wrap that, and how you communicate backwards and forwards to head office.’

“That’s one of the reasons I was reading the book: to learn a bit more about nation-state cyberattacks and security within different countries.”

4. “The Power of Servant Leadership” by Robert K. Greenleaf

“It’s a really interesting one on how we think about the management of our organization so that rather than it being very hierarchical — where you’ve got somebody at the top who’s telling everyone what to do — servant leadership tries to help everyone rise up to do a good job. It’s a very different mentality.”

5. “Why We Sleep: Unlocking the Power of Sleep and Dreams” by Matthew Walker

“You become much more vulnerable to ill health, short-term and long-term serious illnesses, if you’re constantly sleep-deprived.

“You have to be very disciplined and work backwards to say, ‘OK, I need to get up at this time, so I need to go to bed at this time, and I need to think about what I’m doing before I go to sleep in terms of what I eat, whether I’m in front of a screen, etc.’

“If you’re traveling and you’re in different time zones, how does that impact your behavior? How does that impact your clarity of thought?”

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