The Smead Book List - Fall Book List 2026

0:02You're listening to A Book With Legs, a podcast presented by Smead Capital Management. At Smead Capital Management, we advise investors who play the long game. You can learn more at SmeadCap.com or by calling your financial advisor.

0:21Welcome to A Book With Legs podcast. I'm Cole Smead, CEO and Portfolio Manager here at Smead Capital Management. At our firm, we are readers and we believe in the power of books to help shape informed investors. In this podcast, we speak to great authors about their writings. The late, great Charlie Munger prescribed using multiple mental models and analysis. We analyze their work through the lens of business, markets, and people. Today's date is September 28th, 2026. This is our quarterly book list where we talk about books, books, and yes, my friends, more books. Hosting this with me is our chairman and chief investment officer, Bill Smead.

1:00Dad, thanks for joining me. I'm glad to be here and look forward to this. We'll have some fun. So as we always do, we kick it off by just talking about what we've recently read. So I'll hand it over to you and share with listeners. Yeah, we read the Bill Bowling story. And I just lived some of the Bill Bowling story by driving down through the Grays Harbor area of Washington. with Cole's mom. And it's still one of the largest wood providers of all kinds. They had 25 ,000 acres of timberland, which brought him to the United States for his dad. His dad owned those 25 ,000 acres. And that's what put Bill Bowling in the state of Washington.

1:48And that was a great book. The second thing I've never done, I'm in the process. I have virtually never read the Bible cover to cover. And I'm through the first eight books, and each of the first eight books are very long and somewhat tedious because of the differences in the names in those days and the circumstances. But it's been a great exercise so far. the 1873 book which cole and i both made a big effort the last year or so to try to put the current excitement of ai in a historical context by reading about other times in history when people got very jacked up about a certain industry or investment discipline yeah um leica's book was great.

2:45His work was really good. I actually view it differently. We did an orgy of speculative fervor in the 1860s, which was really the kickoff of the railroad. I'm going to go a little wild on this. I haven't actually used this analogy, but it comes to mind right now what the 1860s to the railroad were is a lot like what the internet revolution was to technology today okay but we still had a panic in 1893 on the back of the 1880s being a terrible time um you know as as uh as as uh bill clinton would say uh it happened twice uh in his case being president twice. But I just say that because I think about the parallels of 1873 and 1893, being that it failed once in some respects and that reprised itself again later.

3:47It was not as detrimental. Leah Cutt does a wonderful job explaining how damaging that was to the American economy. The Jay Cook Company went bankrupt, took down the most popular American president of the time, which was Grant, right? President Grant, who happened to be involved with Jay Cook. And so that was incredible for its time. But again, the one thing that we've always talked about is whether you're talking 1873 or 1893 as the economic paradigm, they just didn't have – we just don't have the leverage that was present then. and I say leverage because yes, someone could argue we're now starting to see forms of that leverage, yes.

4:35The difference is that's all the bond market owned then. Well, it was all everything. It's all the stock market was, it's all the bond market was, it was all everything. And what I find always conspicuous, and this has been, I think, this was in my talk, I think, at the Oasis, but the reason why there was so much money being lended out at that time was investors thought it was safe. Yeah, yeah. Okay, so it's a great book for kind of thinking about that. The other thing I will say on your Bill Bowen book, which David Williams was wonderful, is it's like I caddied at Seattle Golf Club, and I know you played a lot there.

5:12And it's like he dies in Edmonds, Washington, where we lived really close to it. It was kind of like walking through your life, but 100 years, call it 70 years prior. I lived in Seattle for 40 years. I'd never been there before. I had no predetermined knowledge. The Bill Bowling Story would have been a great book to read the first day I showed up in Seattle, as Jim Ellis' book, which I read this last year, Autobiography, because it taught you a lot about the city and why things were the way they were and why the Bowling Company was the way it was. And here I find this stuff out years later when I'm living in Phoenix, Arizona.

5:51Yeah. Yeah. And I know a book on my list that I know you read as well was Campus Speech by Erwin Chemerinsky. He was one of the co-authors, as you say. We had him on the podcast. And a lot of what I agree, I mean, he gives a very good framework for where your First Amendment comes from and why it's there and what allows for it. He points out that states set their own rules. So if the state decides a public institution shouldn't have given set rules, you know, they're not going to have those given set rules. So states will rein in their public institutions kind of like they can their public schools in those states.

6:27The one place that I think there's – there's two things that I think are really interesting in my discussion with him. One is that we kind of get to the paradox of the private college situation in America, which is, yeah, you can set whatever rules you want as a private institution, but it doesn't mean people have to buy the product. It doesn't mean you're going to pay. And so I think what we're seeing is private institutions set their own rules. The market on the margin, not completely, but on the margin is saying, I don't like your rules or I don't like your costs. And therefore, I'm going to go do something else, which means the academic systems in America are moving towards a government regulated market regulated by the states, obviously.

7:06So that's something him and I talked about. The only other thing and I you can go to the podcast and I'm not going to read into this and make this too controversial. You cannot be a truth-seeking institution in America, right? We're trying to figure out how the world works and seek truths, okay? At some level, academic institutions are too. If we know things are not true and we still allow them to be so, can it be a truth-seeking institution? I'll just leave that out there. There was a question in his discussion that I'll let our readers go into and kind of think about reading between the lines of what I just said.

7:41Let's see, a couple other books. the revolutionary center by adrian woolridge totally great book it kind of follows on you know liberal thought uh you know i think of like hayek for example on on the idea of like liberal thinking etc i think the one you know his book there's a really good job history of telling you know where did liberalism come from it began with uh the protestant reformation because it It began with like the solo scriptura by scripture alone. You receive revelation from God, not necessarily from the church. And so that is kind of the framework of what he teaches us all came out of.

8:21Now, I threw out a question to him. This is a theory of mine. We'll find out if it ends up being right. But I look at the liberal framework and say it all worked in the liberal framework for, say, the West, at least at a minimum, that it was liberalism worked under what I would call under God. In other words, once we had this view that there is a God and we're going to all be liberal under that framework, it worked. And as soon as we gave up on that, the liberal framework goes perversely different ways. That was the rudder. That was the rudder. Well, that was the centrality. Yeah. That's the scriptura was the kind of centrality of it.

8:58And therefore, there was some establishment of right and wrong. and and that's why we're saying he argues it's double liberalism where it's like why on one end of the spectrum do you see these incredible individuals who just say listen none of this matters all that matters is money well that is a form of liberalism like you know you do you you make as much money as you can that that at some level is liberalism okay at the same time it's like you know why are we seeing these like people just do incredible things to their personal life and we're like you do you that's liberalism it's he calls it double liberalism but here's what's happening in the private college world is a private college most likely has a background, was originally founded under Christian principles.

9:43And then as the years go by, the schools have moved away from those original foundations. Correct. And then what happens is they're very dependent on financial contributions from alumni to perpetuate the success of the institution when in many cases by 30 years later, they are working off a platform that's in total disagreement with the people they want to fund them. And one of the things that came up, at least in the Erwin Chemerinsky that kind of follows because these books are very kind of close on some level, is I brought up local parentis, right? Which was the old principle that in effect, the faculty were going to be your parents while you're at school.

10:22Parents on site. And the catch is like under double liberalism, we'd say like, you're 18, you can do whatever you want. You're the king of your own or queen of your own universe. And the reality is we'll find out if that works. So, and if you have kids as, you know, obviously I do and Bill's had myself, it's quite an interesting paradigm to think about. Let's see. Our Dollar, Your Problem by Ken Rogoff was a wonderful book. Got to chat with Ken. I have a couple of friends in common with Ken. And I will say this, he did change my mind. Ken was really bearish on China, not dissimilar to how we were.

10:58And isn't it funny? It just takes these things so long to come to pass. And now you don't ever run into people that were like, oh, so bullish on China back in the day because nobody wants to talk about it when it doesn't go well. But they'll all tell you about their gambling that won, for example. But I will say this, I do give some pragmatism to one idea that Ken put out there. And I think I might have a new framework for thinking about crypto and I'll have a book I'll bring up on this later. But so let's just say, you haven't heard this yet, so I'll kind of use this as my discussion, okay? I think there's two people present in the crypto market, okay?

11:37Speculators, no surprise, right? And secondly, black market operations. Criminal operations. Criminal operations, okay. So let's say that I am a criminal operation somewhere in the world, you name the country or place, geography, I don't care. And I say, you know, I'd really like to monetize my graft. And if I could find someone to take the other side of the trade, I might pay them a lot of money. Okay. So now think about this. The last big move in crypto came on the back of the post-pandemic period. Now, just go do your reading on what kind of fraud was coming out during that time and you'll see that like shoot social security check payments were fraudulent at times we had a bunch of the ppp loans that were fraudulent i mean there was just an explosion of fraud and and graft student support yeah just all kinds of stuff like that and it's like hmm am i surprised that bitcoin went up in value no so that's my new framework i think about this as the more illegal operations go on and fraud, the more likely crypto will go up further.

12:52If someone says, what if they tighten the rules on illegal operations? I'd say, well, that makes it go up more because you're willing to give up more to the speculator on the other end. And also, the speculators to and fro. So if speculation picks up, price should go up. If speculation falls off, price should go down. So I think it's a mix of the supply and demand The supply and demand of the speculators meeting fraud and criminality and you name it. So that was actually an interesting thing to think about. And the system hasn't been washed since 06 to 09. Yeah, but that's mainly the speculating side.

13:29The only other book was The Gunfighters by Brian Burrow, which we had Brian on the podcast. Obviously, he had been with us prior for Barbarians of the Gate, which he had co-authored. Yeah, Brian was just fun. And Brian spends a lot of time in Texas himself. And the one thing I took away from that is the whole cowboy era, it really was a Confederate story. It was a bunch of frustrated Confederates who didn't like how the United States went. And so it wasn't solely that. There were some Northerners involved in it. But it's like everyone talks about this romantic Texas story. And it's like it's not that romantic.

14:10I'm not saying it's not been prosperous and great in the long run, but it's not that romantic. Let's pivot. What are you currently reading? Well, I'm reading In Search of Trade and Fortune, which is kind of a story of John Cabot, Christopher Columbus, and the opening of The Atlantic by Lydia Towns. And it's very fascinating.

14:32It's kind of shocking when you understand how little everyone knew. That's the first thing that hits you. Yeah. Is they were looking for Japan. They were trying to get in a boat and they were trying to go west. And they thought if they found the right route, they could go to Japan. Yeah. Which the humor of it is, I'm almost finished with the book. The humor of it is that going down around the bottom end of Brazil and Argentina before the Panama Canal existed was the only way to get there. I mean, think of the length of the journey of going from Europe down around the southern tip. Is that the tip of?

15:23South America? Yeah, South America all the way up and around. but they accidentally found North and South America in the process yeah the other thing I think of when I hear Cabot I always think of Cabot Links which is like the famous golf course area out there Eastern Canada let's see two books I don't normally do this but I did it on a drive here recently I audio booked 1984 by George Orwell and you know as you listen and read the book it's a book that it's interesting to think about and ponder. I think it kind of dulls the senses because you'll walk away with certain points in the book where you're like, well, what's the point?

16:05That was a very scary book when I was growing up. Yeah. You basically recommended that to people to scare the daylights out of them. Yeah, and I think one of the book's main point is it just lacks humanity. It just greatly lacks humanity. Now, as I've talked about before, like the luddites did not become the luddites that's that's where that's where orwell was wrong um you know what's one big problem in america today the farmers have the largest farms in the history of the united states people are wondering if they have a monopoly well that's what happened to the luddites my friends they became very large industrial farmers and so that you know as technology progressed so did they the other book i'm currently in is uh uh god's pursuit of man by A.W.

16:50Tozer and I just gotta I just gotta read a little clip out of this book because for the podcast listeners it's like really interesting so you've probably heard me say this before but you know I always think about the idea of like worldly wisdom and that's a lot on the podcast what we're talking about is like worldly wisdom how does the world work, how do things work, how does business work he opens I mean it's just so interesting to think about he actually opens by talking about King David, and he's quoting from the Bible here, says the son of David, King Andrews, and further by these, my son, be admonished of making many books, there is no end, and much study is a weariness of the flesh.

17:32End quote, that's Ecclesiastes 12.12. So it's like, if someone says, well, what are we doing in this podcast? It's the weariness of the flesh, which I thought was like so humbling and self-deprecating. Now he goes on, this is all in the preface. This is just kind of fun stuff right out of the preface. As for originality, Tozer says, has not someone remarked that no one since Adam has been wholly original? Quote, every man, end quote, said Emerson. Quote, is a quotation from his ancestors, which, again, is very true. I'll throw out this last thing from the book, because, again, I'm just in the middle of this.

18:08Tozer says, perhaps a word of warning would not be amiss here. It is that we be aware of the common habit of putting confidence in books as such. It takes a determined effort of the mind to break free from the error of making books and teachers ends in themselves, which is just mind blowing. Yeah, it's really good. So it's that I like I said, that's A.W. Tozer's book, God's Pursuit of Man. If you're a book degenerate, it's great. he's really getting at what I would call the heart versus the mind if you will let's pivot have you had recommended to you or what are you about to read here in the future?

18:47The Doom Loop Why the World Economic Order is Spiling into Disorder by Ezwar Prasad let's see I got a handful Peak Human What We Can Learn from History's Greatest Civilizations by Jonah Norberg I ran into that on on one of the, I think it was the Wall Street Journal book list. This will be a fun one because it's not a geography we typically look at. Three Rivers, the Extraordinary Waterways that Created Europe by Robert Winder, which again, you know, studying the geography of Europe is something we haven't done here in the podcast. I'm going to take a cruise next June on the Rhine. Yep. Both Sides of the Coin, A Guide to Bitcoin and Crypto Investing for Everyday Investors.

19:32that is a book that's being co-authored by I'll call I don't know if he'll want me to call him a friend but an acquaintance of mine Eric Balkunis and I'm going to I want to discuss my theory that I threw out earlier with them of like this idea of speculators on one side and criminality and fraud on the other let's see another book here that I have on my list How Film Became History The Rise of the Archival Documentary in 1930s America by Thomas Doherty. And then the last one I have on my list of books I'm going to be getting into is called A Fabulous Debt, The Epic Story of How Bonds Built the Modern World by Robin Wigglesworth, which I think will be really fun.

20:18Which is on that same subject that we were kind of hinting at before. Hi, I'm Cole Smead, CEO and Portfolio Manager here at Smead Capital Management and host of this podcast. If you enjoy this podcast, I'd like to invite you to check out SmeetCap.com. At our firm, we are stock market investors. We advise investors who play the long game with a discipline that has proven success over long periods of time. Learn more about our funds at SmeetCap.com. Past performance is not indicative of future results. Investing involves risks, including loss of principle. Please refer to the prospectus for important information about the investment company, including objectives, risks, charges, and expenses.

20:58Read and consider it carefully before investing. Smead Funds Distributed by Smead Funds Distributors, LLC, not affiliated. So a couple of questions that we always end up with that I'd love to kind of jump into. And I think this one is a little more straightforward, plausibly, but I'll put it out there anyway. I know I've been getting this question. I don't know if you have too, but the one thing that's changed a lot in the last 12 months has been, it's like the AI game is still afoot. Okay. But parts of the technology landscape have changed. So for example, I'll quote, I will quote Mark Andreessen, who said in what, 2014, he said, software's eating the world.

21:43And it seems in 2025 and 2026, the world is eating software. Yeah. Okay. So I guess the question is, what opportunities are we seeing in the software stocks or in that space that have had large, pretty large swings in the last year? Yeah. Well, about as close as I've come to being interested in investment in that area is what you'd call the software coaches. Accenture would be someone that gets hired by businesses to help them make the best use of technology in the furthering of their business. And so they got literally existentially questioned here recently. Would AI void their usefulness? Would cause companies to not hire them?

22:37And of course, the opposite side of that argument was they don't care what the changes are. They just need companies that need to adapt. And they're going to make the effort to become the company that helps them adapt if they're successful. so that that that but they're they used to feed off software right that software used to be the bread and butter yeah of what they did yeah uh let me let me ask you differently what would i guess what would we be looking for in that space in general oh the same thing we always look for we're we're looking for somebody that has a moat that will survive change right that because that That's always the key to very, very long-term, high free cash flow and high return on invested capital and, you know, the free cash flow generation companies that we most enjoy owning for a long time.

23:34So, you know, that's where you need to look. uh well let me ask us then well i what what i guess you know if we've looked at things there what what would cause us to want to invest or not well it's a timing perspective it's it's funny you you mentioned that because i've begun to think about uh you know i've looked back a lot at the major declines and shakeouts and and what what you want on your list when when that happens So, for example, the guy that runs Microsoft appears to be one of the most sane people in that whole realm, right? So I had purchased Microsoft back in 2006, and therefore, it's kind of on my list of things.

24:31Once they crush the mania and it gets down to, okay, now what are we going to use all this stuff for? And who's going to make money from using it now that it's all been invented and we're all used to using it? Who's going to make the most use of it? So I think Berkshire has bet that that would be Google. They're betting that Google will come out the other side of that. Sure. And that makes sense to look at that. And then it also makes sense to look out at Microsoft, I think. Yeah, because I think what I take away is the ones using CapEx will be the biggest losers. Yeah. AT &T and Verizon were failures.

25:12Yeah. They failed. Global Crossing failed. You couldn't spend your weight. Lucent failed. I mean, WorldCom failed. Deutsche Telekom. Yeah, there's a bunch of failures. So I think the one litmus test that I take away is Microsoft will fail, Google will fail, Amazon will fail, Meta will fail, not because they didn't have great core businesses at one point, to your point. It's that they failed on the capital structure in the future. In other words, you know, this is in my talk that I've been doing, but I just can't believe this. I mean, like, let's just say we walk in 10 years ago and I said to you, I'm like God's messenger.

25:52And I get to walk into the room and be like, hey, Bill, Google is going to go from 100 % of the market share of search to 85 % in a four-year stretch, three to four-year stretch. And you'd be like, that's not going to happen. That'd be impossible. Okay? And by the way, it happened. It's already happening. It's already happening. It looks like they're going to be going through 5 % declines per year. And that could speed up. with all this investment. So I look at that as like, wow. You know, I think it's kind of a paradoxical debate. If you recognize that your core business is a long-term loser.

26:25In the environment that's coming. But it has had historically high returns on capital. Do you continue to milk out the high returns on capital as long as you can, knowing you're in declining business? Or do you reinvest as much of those returns on capital as quickly as you can to get into a lower return business in the long run, but it has more - Staying power. Yeah, it has more runway, okay? Yeah. And I think history argues that very few people are good at creating new businesses. Okay? And so you'd be better off just returning all the capital to your shareholders and letting them figure out who's got a new opportunity.

27:04But what they're trying to do is they're trying to elongate the runway on a different business. Yeah. Okay? And it's like, how easy was that for IBM? Okay? How easy is that going to be for Coca-Cola? Okay? So these entrepreneurial endeavors that come to be end up being more random than we think. Yeah. Well, it's funny you mentioned Coca-Cola because people that like the taste of Coca-Cola, that was their moat. it's funny Cole's mom and I I like Coke Zero and she likes Diet Coke Coke Zero's way better for the record and Coke Zero tastes way better Diet Coke's garbage no offense to Coke yeah Cherry Coke Zero's even better if you're wondering so so so we can't share she and I you get older you don't eat as much it's a picture of a marriage my friend so we we share food but we can't share the drink that we in order to wash it down with because she and she's a taster and i'm not a taster right uh i'm a i'm just a eater and a drinker but anyway so uh yeah so let me use this like and this is like from a prior time but like you'll you'll enjoy this and this comes to mind i don't know why um let's say you were in the municipal bond insurance business in the mid-2000s okay and just so everybody's aware municipal bond insurance has historically been used to provide protections to municipalities.

28:34They pay an insurance premium out. They get a lower cost of capital, all things equal. And the investors get the AAA rating of a municipality that might have been an A-rated municipality, but by having the insurance, they got a AAA rating. Correct. So historically, this was municipal insurance. They eventually got into other corporate underwriting and things that they should never have. Should never have gotten involved. Okay. Now, whether or not they got into that business, interest rates ended up going really low. and so at low rates the value of bond insurance is very small because your interest savings is so small yeah okay and so just think they walk in like hey we got a great new business we can go into commercial underwriting and then we can find these things called synthetic cdo's that we can underwrite too and we think they're all triple a paper okay and it's funny to think about that but the truth is you walk forward and the bond insurance had a great place at one time in society real sweet spot real sweet spot they got paid for not taking as much risk they and then facilitated the the it was good for investors it was good for the municipalities and they were just the middleman that caused that to happen correct but looking back i would say you know based on the cost of capital and access to capital today and how many banks you can go on to write with and all these things it just might not be that needed no it's and so it's like you know so i think about like the core business got ruined even though they had these side businesses they can go And I'm not saying it's perfectly analogous, but the point being that your original core business is often your most successful and you have trouble ever repeating that.