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  1. Thursday, May 23rd, 2019
    mind the gaps

    According to Wikipedia, “mind the gap” is “an audible or visual warning phrase issued to rail passengers to take caution while crossing the horizontal, and in some cases vertical, spatial gap between the train door and the station platform.”  If you’ve visited London, you’ve undoubtedly had the phrase imprinted on your brain for some time, given its ubiquity there.

    Fittingly, attending and speaking at the CFA Institute Annual Conference in London last week got me thinking about all kinds of gaps.

    Sessions throughout the event — the theme of which was “disruption” — dealt with some of the biggest gaps that we face today.  Climate change, sustainability, and ESG were a heavy focus throughout (including being addressed by Prince Charles in his video message to the attendeesYouTube | Here is that message.).  Geopolitical issues and demographic trends got attention too.

    A decade after the financial crisis, there remains a large ... continues

  2. Wednesday, May 8th, 2019
    watching you

    I was going to call this piece “time and motion,” but then I realized that I had already used that title before.  In a 2009 posting,the research puzzle | More than a decade ago! I led off with a quote from The Principles of Scientific Management by Frederick Winslow Taylor.  I didn’t spend too much time on him or his work; I was in a hurry to bewail the dangers of multitasking and the diversion of attention to smart phones, a trend that was supercharged by the opening of Apple’s App Store nine months earlier.AppleInsider | The date that happened was July 10, 2008.

    That, of course, was only the beginning; those issues have intensified in the decade since then.  And with each new wave of technological progress, there are new challenges and dilemmas as to the implications of their use.

    Before considering some of them, let’s return to Taylor.  Peter Drucker credited him with being “the first man in recorded history who deemed work deserving of ... continues

  3. Thursday, March 28th, 2019
    a chemistry is performed

    In a 2014 profile of Elizabeth Holmes, she began what Ken Auletta termed a “comically vague” description of what happened inside of a Theranos blood-testing machine with the words, “A chemistry is performed.”New Yorker | The quote from Holmes: “A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.”  You know the rest of the tale by now, thanks to the outstanding journalistic efforts of John CarreyrouWall Street Journal | His reporting at the WSJ broke the story wide open, and he later recounted the story in his book, Bad Blood. and an ever-expanding number of media projects about Holmes and Theranos.

    Indeed, a chemistry was performed, a powerful reaction among elements that included dreams of venture-capital riches, hopes for a scientific breakthrough, a heroine narrative, the cultivation ... continues

  4. Monday, January 21st, 2019
    dear prudence

    A variety of laws and regulations are in place to guide those who provide investment advice, direct management, or stewardship of assets on behalf of others.  At the core of them is “the prudent man rule,” which first arose as a concept almost two centuries ago.

    But what constitutes prudence?

    Arthur Brooks, in a 2017 New York Times opinion piece,New York Times | The printed version was entitled, “Nobody Here But Us Chickens.” questioned today’s most common interpretation of the word.  He wrote, “The connotation of prudence as caution, or aversion to risk, is a modern invention.  ‘Prudence’ comes from the Latin ‘prudentia,’ meaning sagacity or expertise.  The earliest English uses from the 14th century had little to do with fearfulness or habitual reluctance.  Rather, it signified righteous decision making that is rooted in acuity and practical wisdom.”

    I quite like “acuity and practical wisdom” as a ... continues

  5. Sunday, November 18th, 2018
    the dangers of maximization

    In a recent posting,Epsilon Theory | The title is “Getting Out: A Godfather Story.” Ben Hunt wrote, “My goal as an investor is NOT to maximize my investment returns or to maximize my personal wealth.”  Instead, his goal is to “minimize my maximum regret.”

    As Hunt explains, that’s not the way of the investment world, with its benchmarks and optimizers and breathless searches for the best stock, the best strategy, the best manager, etc.  He says that the business is based upon the assumptions that we are maximizers and “that we SHOULD BE maximizers” — and sees that at the root of many problems.

    I discussed the differences between maximizers and satisficers in three postingsthe research puzzle | This is the first one of the three; click the “next post” link at the bottom to get to the other two. written 2013, based upon ideas in The Paradox of Choice by Barry Schwartz.  Basically, a maximizer is that person who ... continues