Weekend Reads for Investors: Short and Sweet Edition
Since my last edition of Weekend Reads, many stories have caught my eye. So many, in fact, that I am banking some for my next installment. My predilection is toward perennially interesting topics, so there is only a small timeliness factor associated with delaying the stories.
Investing
First up is a development in energy transmission. You may know that power generation is inefficient, with transmission through the grid being an important source of loss. By some estimates, up to 5% of power production is lost in the grid. A contributing factor is that grids just are not particularly smart. That is why this story about the development of new transformers that enable smarter energy transport is potentially important. (R&D Magazine)
Many in finance are rightfully nervous about developments in technology that may obviate the need for us all. In fact, the rise of fintech is one of the scenarios explored in the groundbreaking “Future State of the Investment Profession” white paper published by CFA Institute earlier this year. One aspect of the question: How might fintech improve financial regulation? (South China Morning Post)
I wholeheartedly welcome this next development. The World Bank created standards for underwriting bond issues from the world’s poorest nations. Anyone who has traveled to regions where people live at a subsistence level recognizes the stark reality: Capital goes a lot further there than in its host nation. (Financial Times)
I believe financial markets have been overheated for some time now. Evidence for this view is mounting. Specifically, there is a new subprime mortgage boom. Oh, and auto loan defaults are soaring. (Bloomberg, Financial Times)
Economics
I was in graduate school when the 1997 Asian financial crisis spread like wildfire in Southeast Asia. I remember my fellow students from Asia in an absolute panic about how they would afford to continue their schooling as their home currencies plummeted in value. Here is a retrospective on this important economic event: Part One, Part Two, and Part Three. (FinanceAsia)
Behavioral Finance
For the sake of argument, let us assume we are able to recognize when we are experiencing a behavioral bias. How do we go about unlearning the behavior? In fact, how do we unlearn anything? (By the way, meditation is demonstrated to help people recognize and overcome bias.) (Medium)
This story could just as easily be placed below in the Technology category, but I placed it here because we do have a choice in the matter. What matter? The way “Our Digital Addiction Makes Us Miserable.” At my home, we now have “digital free” days, and several times a week, I leave either the office or the home without my smart device. At first, it was nerve-wracking. Now? I never miss it. Put another way: I believe I have changed my relationship to the always-on world. Amen! (Financial Times)
Technology
I am simultaneously a supporter and critic of machine learning. My issue is with much of the hype that surrounds the subject. One other obvious fault: Machine learning has made only limited gains. (Bloomberg Businessweek)
Back in 2014, I featured a story about crime-profiling software that raised uncomfortable questions about the potential for discrimination. It turns out that the people coding such software may unintentionally program in their biases. Oops! This remains a problem. (VentureBeat)
Fun Stuff
Next, one that I hope appeals to each of you: “What’s the one best book to learn about investing?” (MarketWatch)
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/Ellica_S
