I just finished up reading a fascinating book by Atul Gawande called The Checklist Manifesto. Gawande is a well-known surgeon who was asked by the World Health Organization to help make surgery safer for their 193 member nations.

The problem seemed staggering. How could you come up with a program to make surgery safer in 193 different countries? These countries have different economic systems, different cultures, and different educational systems. To improve surgery worldwide would take a massive expenditure of resources and involve tens of thousands of people, wouldn't it?

Actually, no.

Gawande's surprising answer to the problem was a checklist. By formulating a set of official standards for safe surgical care and publishing them under the World Health Organization's name, he felt he could reduce many of the errors that surgeons make. 

According to Gawande, surgery has four big risk factors: bleeding, infection, unsafe anesthesia, and what he calls "the unexpected." For the first three, Gawande says science and medicine have given us some straightforward and valuable preventative measures. Unfortunately, surgeons sometimes miss these simple things. For example, a 2005 study of the Children's Hospital in Columbus, Ohio determined that over one-third of the time, appendectomy patients failed to get the right antibiotic at the right time. Gawande said if you give the antibiotic too soon, it can wear off before surgery, and if you give it too late it won't work at all.

While giving the antibiotic at the right time may seem like a simple notion, Gawande points out that many simple requisites can easily be overlooked. And it is these oversights that cause major complications.

Are there parallels between surgery and traditional portfolio management? Gawande suggests there are. While on the surface, both seem incredibly complicated, Gawande suggests much of surgery is a series of simple tasks. Isn't this what naked investing is about too?

I will have much more to say about this wonderful book in future posts.