Weekend Reading for Financial Advisers: Jeremy Grantham, Steve Jobs, and Marshmallows

If you follow my tweets (@laurenfosternyc), many of these links below will be familiar. But for those of you who missed them, here is a short selection of some of the most essential and/or enjoyable reading and viewing I’ve come across over the past few weeks. Enjoy.

Investing

• Two legends at the table — one from the world of journalism, the other from the world of investing: Jeremy Grantham speaks with Charlie Rose. The show runs just shy of an hour, and it’s worth watching every minute. As Rose says, Grantham “is a man of interesting ideas.” The discussion ranges from his outlook for the global economy, including population growth and threats to the world’s natural resources, to his prescient market calls on such financial asset bubbles as Japan, the dot-com frenzy, and the subprime crisis. (Charlie Rose)
• Due diligence has taken on added import in the post-Madoff era. One helpful resource is the Greenwich Roundtable‘s selection of (free) best practices papers, including “Best Practices in Alternative Investing: Avoiding Mistakes” (PDF) and “Best Practices in Alternative Investing: Due Diligence” (PDF). (The Greenwich Roundtable)

Economics

• As Greg Ip of the Economist put it in a tweet: “Markets in Almost Nothing,” a post on Noahpinion is:

@noahpinion deceptively simple, elegant critique of market-based welfare analysis http://t.co/ZS4ewPFAmz

— Greg Ip (@greg_ip) March 25, 2013

Social Media

• CFP Board recently released a social media guide for financial professionals (PDF).
• Also, the Securities and Exchange Commission clarified social media filing requirements. (OnWallStreet)
• @MichaelKitces offers advice for busy financial advisors who want to get started on Twitter. (Nerd’s Eye View)

Vision

• In this two-minute video clip from 1995, Steve Jobs — who was at NeXT at the time — discusses the most important thing. “The minute that you understand that you can poke life and actually something will, you know if you push in, something will pop out the other side, that you can change it, you can mold it,” he says. “That’s maybe the most important thing. It’s to shake off this erroneous notion that life is there and you’re just gonna live in it, versus embrace it, change it, improve it, make your mark upon it.” Words to live by. (Farnam Street)

Retirement (Sort Of)

• Maria Popova, publisher of Brain Pickings, had an interesting post recently on the “mortality paradox” based on the book Immortality: The Quest to Live Forever and How It Drives Civilization by Cambridge University philosopher Stephen Cave. (Brain Pickings)

Behavioral Finance/Biases

• In “A Sociologist Examines the Limitations of Behavioral Finance,” Brooke Harrington, an associate professor at the Copenhagen Business School, acknowledges the appeal of behavioral finance but also points out its shortcomings: Failure to acknowledge the findings of the allied social sciences, and a narrow, limited critique of economic theory. (Corporate Governance)
• If you have kids, you’ve no doubt heard about “the marshmallow test,” which shows how well children can delay gratification. (Apparently this is a trait that has been shown to be as important to academic performance as traditional IQ, much to the angst of parents everywhere.) But if you haven’t heard of it till now, the test goes something like this: Sit your child down at a table with a marshmallow and give him or her a choice: He or she could eat one marshmallow now, or wait 15 minutes and get two marshmallows. Can you see where this is going? According to the research, the ability to hold out for the latter correlated with greater success and self-control later in life. In a twist, new research from University of Pennsylvania psychologists suggests that changing one’s mind about delaying gratification can be a rational decision in situations when the timing of the payoff is uncertain. See: “Quitting Marshmallow Test Can Be a Rational Decision.” (Science Daily)
• For more marshmallowness, check out this article from October 2012: “The Marshmallow Test, Revisited.” (Wonkblog)
• When Rob Portman, Republican senator from Ohio, announced he had reversed his very public stance against gay marriage because his son is gay, critics decried his sudden change of heart. Why, they asked, he had not stood up for gay rights sooner? (As Paul Krugman put it, “Wouldn’t it have been a lot more praiseworthy if he had shown some flexibility on the issue before he knew that his own family would benefit?”) In “Stalin, Mother Teresa, and Rob Portman: What Do They Have in Common?” the writer explains the cognitive bias toward caring more about people you know. (Scientific American)

Technology

• We are all generally aware of the benefits and convenience of all our electronic devices. But new research, explained in “Your Phone vs. Your Heart,” suggests it comes with a high cost: our biological capacity to connect with other people. (New York Times)

Presentation Skills

• In this short, animated video clip, you can learn “5 Things Every Presenter Needs To Know About People.” (Vimeo)

And Now For Something Completely Different

It was a toss-up for this week’s bottom slot. So I included both:

• Have you ever pondered the question: How much is it worth sacrificing to do what you love? I know I have. Plus I’ve also often wondered what separates endurance athletes from the rest of us mere mortals. “Becoming the All-Terrain Human” is not a philosophical treatise; it delves into the world of über athlete Kilian Jornet Burgada who “has won more than 80 races, claimed some 16 titles and set at least a dozen speed records, many of them in distances that would require the rest of us to purchase an airplane ticket. He has run across entire landmasses­ (Corsica) and mountain ranges (the Pyrenees), nearly without pause. He regularly runs all day eating only wild berries and drinking only from streams.” I’m exhausted just reading about these feats. If nothing else, the article will leave you stunned by Jornet’s physical prowess and his seemingly incomprehensible endurance. (New York Times Magazine)
• My favorite read of the past few weeks comes from an unexpected source: Wired. And the topic perhaps even more unexpected: “The Power of Swarms Can Help Us Fight Cancer and Predict the Future.” It is a fascinating read and Ed Yong, the author, is a gifted writer. Invest some time in this one, it’s worth it.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ©iStockphoto.com/JLGutierrez