Practical analysis for investment professionals
29 April 2016

Weekend Reads: Flat Heads, Investing in Africa, and Happiness at Work

Posted In: Weekend Reads

I don’t know about you, but I spend a lot of time working. One statistic I read claimed that workers will spend an average of 90,000 hours at work in their lifetimes. That’s a lot of hours. And when I’m not working, I’m often thinking about work and the conditions that enable employees to thrive. Recently I stumbled on this short excerpt about the intangibles that define a successful workplace, and it really resonated with me:

“As I have earlier noted, the most important things in life and in business can’t be measured. The trite bromide ‘If you can measure it, you can manage it’ has been a hindrance in the building a great real-world organization, just as it has been a hindrance in evaluating the real-world economy. It is character, not numbers, that make the world go ‘round. How can we possibly measure the qualities of human existence that give our lives and careers meaning? How about grace, kindness, and integrity? What value do we put on passion, devotion, and trust? How much do cheerfulness, the lilt of a human voice, and a touch of pride add to our lives? Tell me, please, if you can, how to value friendship, cooperation, dedication, and spirit. Categorically, the firm that ignores the intangible qualities that the human beings who are our colleagues bring to their careers will never build a great workforce or a great organization.” ― John C. Bogle, Enough: True Measures of Money, Business, and Life

Here is a short list of some other good articles and videos I’ve come across recently:

Investing and Financial Advice

  • A two-fer from Ben Carlson, CFA: In “When Mediocrity Trumps Brilliance,” he notes there is a critical element missing in the discussion about active vs passive investing. “Even mediocre, underperforming actively managed funds would have grown the value of your portfolio,” he writes. “It’s obvious that costs matter, especially when they are compounded over a number of years, but there are many aspects of portfolio management that can trump costs.The biggest issue for most investors has not been the active vs. passive debate or investment costs — it’s been those who have latched on to the pessimistic parade of charlatans who have kept people out of the markets with scare tactics and fear mongering. Being out of the market for the past 7–10 years has been far more damaging [than] any difference in mutual fund fees.” (A Wealth of Common Sense)
  • In “180 Years of Market Drawdowns,” Carlson draws on work done by applied mathematician Robert Frey, a former managing director of Renaissance Technologies, one of the world’s most successful hedge fund firms. Carlson notes: “Over the last 90 years or so the market [has] been in a bear market almost one-quarter of the time. Half the time you’re down 5% or worse. It’s difficult to appreciate this fact when looking at a long-term log scale stock chart that seems to only go up and to the right. . . . Market losses are the one constant that don’t change over time — get used to it.” (A Wealth of Common Sense)
  • Meb Faber has a good post on buying beaten down sectors that’s titled “50% Returns Coming for Commodities and Emerging Markets?” Says Faber:  “If history is any guide, we’re standing at the edge of 40%–96% returns over the next two years. This isn’t wishful thinking or wild speculation. I’m not selling anything. Rather, I’m just reporting historical gains from a market set-up that’s repeating itself right now.” So what’s going on? (Meb Faber Research)
  • In his article, “The Portfolio Management Assumptions that Harm Clients,” Scott MacKillop cautions that “Far too often, advisors accept beliefs and practices that are detrimental to the financial wellbeing of clients,” but “By reexamining them, you can achieve better outcomes for your clients.” (Advisor Perspectives)

Investing in Africa

  • In The Big Read, “Africa: Between Hope and Despair,” David Pilling asks, What happened to Africa rising? “Not so long ago, when investors, shell-shocked from the 2008 financial crisis, were hunting for the next big growth story, the idea of a resurgent Africa took hold,” he says. “After decades in which the perception of Sub-Saharan Africa had been that of a continent of poverty, disease, civil war and kleptocracy, from about 2009 a new, more hopeful, narrative began to gain traction . . . That exuberance has evaporated.” The most important question about Africa today? “Is there a sensible view between hope and despair?” (Financial Times)
  • The Economist also has a special report on Africa: “The commodity boom may be over, and barriers to doing business are everywhere. But Africa’s market of 1.2 billion people still holds huge promise.” And in an accompanying Leader, it notes that the continent’s future is in the balance and whether it slips back to “stagnation, war and autocracy” will depend on two goals: Governments that relied on mineral royalties must expand their revenue bases and governments across the continent need to invest in infrastructure, work to reduce trade barriers, and combat corruption. (The Economist)

And Now For Something Completely Different

  • This week I was reminded of a TEDTalk I shared about a year ago, “Why Do Ambitious Women Have Flat Heads?” after Dame Stephanie Shirley was (“the most successful tech entrepreneur you never heard of”) was awarded The Women of the Year 60th Anniversary Special Award. She has a remarkable story to tell and her TEDTalk is both funny and inspiring. (TED)
  • Meditation instructors are the new management gurus. But are meditation and mindfulness the same thing? No, says Matthew E. May, author of the forthcoming Winning the Brain Game. He writes: “Meditation is simply one of several tools for achieving mindfulness, and in the context of work it may not be the most suitable for many people. For those who, like me, can’t seem to get the hang of meditation, there is good news: You don’t have to meditate to become more mindful.” (The New York Times)
  • “Inspired work stands apart from normal life,” writes David Brooks. “In the first place it’s not about self-interest as normally understood. It’s not driven by a desire for money or grades or status. The inspired person is driven intrinsically by the work itself. The work takes hold of a person. . . . But what exactly is inspiration? What are we talking about when we use that term?” (The New York Times)
  • In “Visualizing Data: How the Media Blows Things Out of Proportion,” Jeff Desjardins shows why, the next time you see talking heads discussing the newest global distraction, you should take a deep breath. (Visual Capitalist)
  • Have you ever wanted to chuck it all in and do what you really want to do? That’s what this former neurologist did. Now he spends his days rollerskating and couldn’t be happier. (Aeon)

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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.

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About the Author(s)
Lauren Foster

Lauren Foster is 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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