Practical analysis for investment professionals
11 May 2018

Weekend Reads for Investors: From Hong Kong Edition

As you read this, I am in Hong Kong for the 71st CFA Institute Annual Conference where I will be hosting the event’s live web coverage, Conference Live. If you are attending, please stop by and say hello at our studio in the exhibition hall.

Throughout the conference, we will be covering many topics that are perennial favorites in my Weekend Reads series, including the importance of silence; the investment information contained in executive communications; behavioral finance — Daniel Kahneman will be stopping by our studio; economic growth in Asia; and on and on.

Now, on with this edition of my Weekend Reads picks.

Investing

First up: an update on the Swiss Vollgeld Initiative. This is something I have covered for Enterprising Investor over the last several years. For those not in the know, on 10 June 2018, the Swiss public will vote on whether to end fractional reserve banking. Yes, really. According to a recent Swiss poll, the initiative is unlikely to pass. Nonetheless, that it still has the support of about one third of the citizens of the ultimate banking country is amazing to me.

Much fuss has been made about how much investable data location-based services provide. This ace article explores data scientists and their efforts to directly measure the economy.

Much has been made about the Belt and Road Initiative, China’s massive infrastructure effort. The government of China has stated that its aims are purely economic. Yet, a US think tank believes the real purpose is to expand the country’s global influence and military reach. The comments section of the article is especially interesting. Why? Given the current trade tensions between the United States and China, it provides some transparency into the thinking of those living in the Eastern Hemisphere. For what it’s worth, I think the United States has often taken actions that have simultaneous economic, military, and cultural benefits.

While the last selection in this section is an opinion piece, it is one that I agree with. It states that lazy fund managers lead to lousy returns. The sins called out? A lack of research and a short-term focus. These are two issues I discussed several years back in my Alpha Wounds series.

Economics

There’s much noise about the importance of increasing diversity in the investment business. No doubt this is true. However, according to new research, women lose out to men even before they graduate college. Said another way, global society also has a responsibility to correct this imbalance.

This next selection, depending on how much of a harbinger it is, may be a candidate for story of the year. In fact, my jaw dropped when I read the headline, which triggered a reflexive, “Fake news!” in my head. Turns out it is true: China just logged its first current account deficit in 17 years!

Fintech

Artificial intelligence (AI) and machine learning efforts tend to focus on creating ware — both soft and hard — that can compete with and best humans in individual contexts. Think strategy games. But people can do much more than just play games, walk, open automobile doors, and build algorithms. We also use collective intelligence. And now a US start-up is developing AI technology that is based on collective human intelligence.

Behavioral Finance

It is a belief widely held in the investment world that men are hardwired for risk taking. But is that really true? I think you will agree that this is a fascinating article about a subject that deserves our attention as finance pros.

Environmental, Social, and Governance (ESG)

Next up is the latest in a long line of stories about green bonds. ProLogis, that massive global real estate logistics company, has issued one. Why? Because of the so-called green multiplier effect.

I was uncertain how to categorize the following article. Fun Stuff? ESG? I am filing it here only because it is about the Earth. Specifically, about how little we know about what is going on inside of our own planet once we go just several miles down into its outer crust. But singular diamond impurities suggest there’s water stored deep in the Earth’s mantle.

Fun Stuff

Again, this piece defies categorization. Since I don’t normally write about careers, I have placed it in my catchall, miscellaneous category. That said, the piece isn’t very fun. It explores the question “How Much Should Your Boss Know about You?”

See you in Hong Kong!

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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: ©Getty Images/seng chye teo

About the Author(s)
Jason Voss, CFA

Jason Voss, CFA, 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. Previously, Jason was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. 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@jasonapollovoss.com

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