Enterprising Investor
Practical analysis for investment professionals
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23 May 2014

Weekend Reads for Finance Pros: Correlation and Causation, HFT, and “House of Debt”

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Posted In: Weekend Reads

Last night I was streaming an episode of True Detective (oh so good!), when a magnitude 3.2 earthquake centered west of Richmond, Virginia, shook the ground as far north and east as the Washington metropolitan area. Fortunately, there were no reports of significant damage or injury. Still, it was yet another reminder of the power of nature. Earlier this week I was gobsmacked when I saw this image come across my Twitter feed:

One’s first reaction might be: Is that Photoshopped? No, it isn’t — as you can see in this time-lapse footage of the supercell.

But, I digress. Here are some interesting (non-weather-related) articles, photographs, radio clips, tweets, and Ted talks I’ve come across in recent weeks.

Behavioral Finance

Investing

  • “Fact, Fiction and Momentum Investing “(SSRN)
  • “Risk versus Reward in Golf and Investing” (ThirtyNorth Investments)
  • On why most financial commentary is hogwash: “A Load of Bull” (The Psy-Fi Blog)
  • I love this paragraph from “Eliminate All Hero Worship“: “As my father also liked to say, everyone in this world puts their pants on the same way in the morning. That was his unique way of reminding me that no matter how rich or successful another person has been, they are just like all of us when it comes right down to it. In that same regard, these heroes of the market suffer from the same insecure, emotional, ego-driven trading and investing as the rest of us. The more you watch and track them, you will find this to be true.” (The Kirk Report)

Geithner vs. Mian and Sufi

Wealth Management / Financial Planning

The HFT Debate Rages On

Correlation and Causation

Leadership/Decision-Making

  • Earlier this month I put together a blog post of five TED talks that I really enjoyed. This week I came across another one — Simon Sinek discussing what makes a great leader. Sinek believes it’s someone who makes their employees feel secure, who draws staffers into a circle of trust. (TED)
  • To influence human decision-making, you have to understand the unconscious mind: “Decisions Don’t Start with Data” (HBR Blog Network)
  • “‘Warmth and competence are two of the most crucial factors we look for when deciding how we feel about someone . . . ” See:

And Now For Something Completely Different

  • Why are we so busy? In “No Time,” Elizabeth Kolbert reviews Overwhelmed: Work, Love, and Play When No One Has the Time by Brigid Schulte, a reporter who she says is “the latest author to tackle the question — very loosely speaking — of where Keynes went wrong.” In other words, if “we have become, in aggregate, as rich as Keynes imagined, this wealth has not translated into leisure.” Is it that busyness has acquired social status? Or are Americans overwhelmed not because of how many things they have to do but because of how much time they spend thinking about how many things they have to do? What if neither of these theories is right and the real culprit is (ahem) men? “‘Though men today certainly spend more time caring for their children and doing more chores,’ Schulte writes, ‘it is still about half of what women routinely do.’ Small wonder, she concludes, that women are more likely than men to report ‘chronic stress and the feeling that life is out of control.’” (The New Yorker)
  • “60 Iconic Images from the 1960s” (CNN)
  • A very interesting piece by Dan Barber, chef and owner of one of my favorite restaurants, Blue Hill at Stone Barns, on embracing the whole farm rather than the ingredient: “What Farm-to-Table Got Wrong.” (New York Times)
  • Also food-related: “You learn an enormous amount about capitalism studying food.” (Vox)
  • Why the brain prefers paper: the science of paper vs screens. (Scientific American)
  • Fascinating article on the power of eye contact. It turns out that making eye contact — even with a character on a cereal box! — inspires powerful feelings of connection. This has profound implications for our wired society. As the author of “Psst. Look Over Here.” writes: “This is alarming in a society where people increasingly spend more time looking at their mobile devices than at one another.” (New York Times)
  • “Why Reporting On Scientific Research May Warp Findings” (NPR)
  • Like piano? Improv? Watch this guy play the piano in a train station in London (and note the insouciance of some bystanders). (UPVINES)

Here in the US it’s a long weekend (Memorial Day), which reminds me of tweet I saw a couple of weeks ago that made me chuckle:

This weekend’s forecast: Sunny with a high probability of cheese, wine, and bread #IsItFridayYet?

Happy Weekend!

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/temmuzcan

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About the Author(s)
Lauren Foster

Lauren Foster was a content director on the professional learning team at CFA Institute and host of the Take 15 Podcast. She is the former managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Lauren spent nearly a decade on staff at the Financial Times as a reporter and editor based in the New York bureau, followed by freelance writing for Barron’s and the FT. Lauren holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.

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