Practical analysis for investment professionals
17 March 2017

Weekend Reads for Investors: Brain Gain Edition

Posted In: Weekend Reads

Other than it pays to be long equity markets, there is not much of a story to tell about investing at present. There are several national elections on the horizon — in France and elsewhere — that may provide some systemic shocks, and reports that first quarter earnings season will likely feature flat revenues and below-trend earnings growth are trickling in as well. But alas, it matters not, as the mood du jour is: BUY.

Investing

Given the dearth of investing stories, I want to feature several pieces that are within the domain of investing but are not about trends or happenings. Instead, they focus on little-discussed aspects of our business.

First is this piece about Myanmar/Burma’s famous activist-turned-leader, Aung San Suu Kyi and her first encounter with George Soros. What I found fascinating was her naivete about the necessity of a good relationship with the financial community, and how important providers of capital are to the overall economic ecosystem. (FinanceAsia)

This next article provides a possible future direction for the private wealth industry in particular. Namely, wouldn’t it be nice to know what your clients’ real risk tolerances are? How about their real return expectations? Or just how vested they are in the financial goals they say are important to them? With new portable brain-scanning technology it is becoming more likely that these questions can be answered objectively. What is missing is a fund management shop willing to invest the time and money to make it happen. (R&D Magazine)

Economics

Those of us in finance frequently forget an extraordinarily important fact: Most economic growth does not take place inside the behemoth corporations that demand our time and mind share. Instead, it occurs in small organizations where the standards of doing business are very different, and usually much more human. (NewCo Shift)

Silicon Valley isn’t the only place where people are looking at new possibilities for capitalism. Even in mainstream finance, the importance of creativity and caring for people is receiving a groundswell of recognition and support. (Financial Times)

Behavioral Finance

Philip E. Tetlock and Dan Gardner’s Superforecasting: The Art and Science of Prediction is one of the more interesting books about finance and economics in recent years. Many of you are familiar with it already, and if you are like me, you also want to read the primary research on which such popular books and conclusions are based. Tetlock has generously provided access to free versions of his research. Just follow the link and click on the “Research” tab for interesting pieces he has authored. (University of Pennsylvania Wharton School)

Here is one of my candidates for story of the year so far. Given its high quality, it is likely to secure a place on the medal podium at year’s end. The title says it all: “Why Facts Don’t Change Our Minds.” (The New Yorker)

This last article I did not know quite where to place. Published on a US defense industry website, it explores the similar mentality that exists between Islamic terrorists and mass shooters. Though the linkage may be controversial, it affirms how important society and socializing are to human mental health. (Defense One)

Environment, Social, and Governance (ESG)

Even if you do not think people cause climate change, surely you are for economic efficiency? If so, you must have noticed how much waste there is in supermarket packaging — including the tiny stickers on apples. A Swedish supermarket is testing lasers as a way to label produce. Even this little bit moves the needle on the economy. (Japan Times)

One of the stumbling blocks to nanotechnology is its unknown environmental effects. At the recent American Association for the Advancement of Science (AAAS) Annual Meeting, attendees considered taking a green approach to nanotechnology. The description of the work is a model for how to thoughtfully consider environmental consequences well in advance of the launch of a new technology. I discussed this issue in my Where Markets Fail series, which you may also find interesting. (R&D Magazine, Enterprising Investor)

Fun Stuff

I have a disproportionate amount of articles in the “fun” category this week.

First is a fascinating piece on how difficult it is to translate some emotional experiences into words and across languages. I find this compelling because, by definition, experience is larger than our ability to describe it with either numbers or words. Yet science has a bias against things that cannot be described mathematically. If it cannot be described, it is frequently ignored. (BBC)

Indian classical music — both Northern and Southern — is one of my favorite genres of music Just as in North America and Europe, how to win new fans for old music is an issue in India. One Indian maestro is taking classical music to the masses. (BBC)

Last, and here I feel like a broken record, is an article about the link between the mind and quantum physics. I believe that the brain is like a tuner for consciousness and quantum physics provides some support for this belief. Here is a primer about the mind-quantum link. Also look at the work of Henry Stapp. (BBC)

Music I listened to that inspired this article: Cristian Vogel; Kelly Willis; Yo La Tengo; Ben Harper; Marcy Playground; Los Chicharrons; dZihan & Kamien; Dire Straits; Joseph Arthur; and Blind Boy Fuller.

If you liked this post, don’t forget to subscribe to the Enterprising Investor.


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/Christian Mueller

About the Author(s)
Jason Voss, CFA

Jason Voss, CFA, is a content director at CFA Institute, where he tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor. Jason also ran a successful blog titled What My Intuition Tells Me Now. Previously, Voss was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund. He holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: jason.voss@cfainstitute.org

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