Practical analysis for investment professionals
07 August 2015

Weekend Reads for Finance Pros: Yanis Varoufakis, Leadership, and Longevity

Posted In: Weekend Reads

He has been “likened to a rock star, hailed as a sex icon, and feted by fashionistas.” He’s also been referred to as the enfant terrible” of the financial media.

If you haven’t already guessed it, I’m talking about Yanis Varoufakis, the erstwhile Greek finance minister and self-described “erratic Marxist.”

While the outspoken economist-turned-politician has not been in the headlines much lately, the intrigue surrounding his resignation following the Greek bailout referendum, and the months of infighting leading up to it, have continued to linger. Until now, that is. Ian Parker has written a masterful profile, “The Greek Warrior,” in The New Yorker that “tells all.” Varoufakis is candid about his sudden entrance into politics and the now-infamous battles with European creditors. If you are at all curious about his dealings with Wolfgang Schäuble, Germany’s powerful finance minister, and what really went on behind closed doors, it’s worth a read.

Of course, reading a New Yorker profile is a time commitment. It also requires attention (10,000 words! Who has time for 10,000 words?). But a good read is oh so worth it. Which is why I liked something I read in a recent Carl Richards article: “Attention is a currency. We choose how to spend it, just like we spend our time, energy and money.”

Shane Parrish, of the Farnam Street blog, says there is no question he is asked more than “how do you find the time to read so much?” or “how can I find time to read?” There is no secret, he says: “As simple as it sounds, finding time to read boils down to choices about how you allocate your time. And allocating your time is how successful people increase productivity.”

Choose to spend more time reading. And by that, I don’t mean reading emails, or text messages, or the latest social media update.

Here are a few reads, in case you missed them:

Investing

  • Back in 2013, Harold Pollack, a professor at the University of Chicago and a contributor to the Washington Post‘s Wonkblog, scribbled “all the financial advice you’ll ever need” on a 4×6 index card. It garnered a fair deal of attention. Now Christine Benz is exhorting the benefits of distilling “your own investment approaches into just a few easy-to-understand sentences — or, at least get them onto a simple note card.” Doing so, she says, “can help ensure that your investment strategy isn’t too complicated and doesn’t require too much maintenance on an ongoing basis.” See: “Why Your Investment Strategy Should Fit onto an Index Card” (Morningstar)
  • “One of the biggest psychological challenges of investing,” writes Michael Batnick, “is that there is always something out of the norm.” What is normal? Perhaps there’s no such thing as a normal decade in the markets. See: “Waiting for Normal” (The Irrelevant Investor)
  • For Ben Carlson, CFA, process drift is a bigger cause for concern than style drift. “Process drift comes into play when you start changing when and why you’ll include something in your portfolio,” he writes. “If you have a good process in place, style drift shouldn’t even be an issue, because you’ll have rules in place to keep out certain types of investments. If you’re investing in different risk factors a good process would require that you’re adding to them when they’re underperforming, because that’s how you capture those premiums over time.” A word of caution: “Jumping in and out of the different risk factors or smart beta-type strategies is a dangerous game to play.” (A Wealth of Common Sense)

The Workplace

  • The difference between “leading” and “running” an organization: “Ten Golden Rules of Leadership: Classical Wisdom for Modern Leaders” (Farnam Street)
  • Mixed-gender teams work well together because men and women think differently, something that should help practitioners build much stronger investment firms. That’s the central point in a piece written by Leah Bennett, CFA, and published recently in InvestmentNews. Her message is a powerful one. Bennett also raises an interesting question: “If the investment industry is such a good fit for women, why don’t we see more women entering the industry, and why don’t we see more women in senior roles?” She points out that “the percentage of female CFA charterholders, a proxy for the industry, has been stagnant for several decades (around 18%). And Morningstar recently published a paper showing that fewer than 2% of all mutual funds’ assets are run by women.” So what’s the solution? “We must create firm cultures that encourage diversity — in gender, thought and teams,” Bennett says. “Diversity should be tied to overall firm strategy. Women are the universal diversifier, which is why this subject is such an important one to embrace and debate. The end result should ultimately benefit investors.” See: “Why Gender Diversity Means Better Outcomes for Investors” (InvestmentNews)
  • “A good workplace is one in which you can look around and see versions of yourself five years from now, or ten,” writes Lisa Miller in “Why We Need Older Women in the Workplace.” “But for women, this exercise in mirroring gets harder and harder as they push toward 40, and 50, and beyond — for the simple reason that older women with ambition don’t stick around.” (New York)

And Now for Something Completely Different

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: iStockphoto.com/JLGutierrez

About the Author(s)
Lauren Foster

Lauren Foster is the former managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Previously, she worked as a freelance writer for Barron’s and the Financial Times. Prior to her freelance work, Foster spent nearly a decade on staff at the FT as a reporter and editor based in the New York bureau. Foster holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.

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