Weekend Reads for Global Investors: AlphaGo, China, and Brussels
“Change is the only constant.”
Judging from recent events, the pre-Socratic philosopher Heraclitus demonstrated incredible foresight when he wrote those words some 2,500 years ago.
In a sign of the times, Google’s AlphaGo has replaced IBM’s Deep Blue as the most-feared computer program among board game players. Deep Blue beat Garry Kasparov in chess, a game with far fewer potential sequences than Go. (The chess board is eight by eight squares while Go is 19 by 19). So earlier this month, when Lee Sedol, South Korea’s top Go player, finally lost to AlphaGo, the human race’s fear of being dominated by robots understandably rose to fresh highs.
Although few believe we’ll actually be enslaved by robots, AlphaGo’s win will clearly provide additional impetus to the already-raging financial technology movement. Though when it comes to asset management, machines won’t replace humans tomorrow, the investment management industry as we know it today will no doubt be increasingly affected by technological changes. So stay alert to the trend. And stay tuned for more coverage from Enterprising Investor.
In other news, Marriott was forced to raise its bid for Starwood thanks to Anbang, the largest Chinese insurer by capital base. As assets build up in China, the need to diversify globally will undoubtedly continue to generate similar stories down the road. But that’s not the only angle. The Financial Times provided an in-depth analysis on Anbang’s rapid rise and its deeper motives in expanding overseas.
Finally, we’d be remiss without noting the tragic events in Brussels this week, which sadly mark yet another horrifying moment in an era that has had more than its share. How should average people deal with this new reality — that terrorist activity is becoming “the new normal,” as the Economist puts it? What about investors? An article by Josh Brown of the Reformed Broker cites a number of articles on the subject that are well worth reading.
Below is a list of links to the stories mentioned in the paragraphs above as well to other interesting articles I have come across in recent weeks. Happy reading and enjoy the weekend.
Change Is the Only Constant
- “AlphaGo, Lee Sedol, and the Reassuring Future of Humans and Machines” (The New Yorker)
- “The New Normal.” With terrorist attacks like those in Brussels becoming more common, how should people cope? (Economist)
- “The Market’s Response to Crisis” (The Reformed Broker)
- “Starwood Agrees to Sweetened Merger Bid from Marriott” (Wall Street Journal)
- “China Inc: The Quest for Cash Flow” (Financial Times)
Investing
- Rob Arnott and company called a potential crash in smart beta strategies. Not everyone agrees. “Smart Beta Crash Coming?” (A Wealth of Common Sense)
- Here’s the original article from Research Affiliates: “How Can ‘Smart Beta’ Go Horribly Wrong?” (Research Affiliates)
- “What Tracks Commodity Prices?” The authors don’t think it’s China’s slowdown. (The Big Picture)
- “Why a 100% Stock Portfolio Can Ruin Your Retirement.” All investors should know the answer. (MarketWatch)
Emerging Markets
- “Templeton’s Mark Mobius: You Need to Diversify into Emerging Markets” (CNBC)
- “What Brazil’s Turmoil Says about Corruption in Emerging Markets from South Africa to Malaysia” (South China Morning Post)
- “India to Outperform Emerging Markets in 2016: Morgan Stanley Survey.” This is positive news, but the percentage of people supporting the view dropped from 85% last year to just over 50% now. (Economic Times)
The Soft Side of Business
- “This Mental Trick of Olympic Athletes Can Radically Increase Your Productivity” (Inc.)
- “How Successful People Network with Each Other” (Harvard Business Review)
- “22 Qualities That Make a Great Leader” (Entrepreneur)
And Now for Some Readings Truly for the Weekend . . .
- “Secrets of an Ex-Lehman Exec Says Dick Fuld Finally Apologized in New Memoir.” The memoir of the former Lehman Brothers CFO provides some details about how the events unfolded. (Vanity Fair)
- How do you avoid being judgmental? Treat others how you want to be treated. (Lifehack)
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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
