4 min read

17/ Friday Reads

17/ Friday Reads
🤯 Credit: Sean Keating, who uses slices of brain tissue to replace swirls of paint. (Entry from the Art of Neuroscience Competition - linked below).

Not much to say this week, so I won't force it. Instead I'll leave you with six finance reads and six sources of interest that I have found particularly absorbing:

💰 Finance

Once Unthinkable, Parity for Sterling Is on the Horizon. "The UK is facing the same challenges as other countries, but compounded by its own unique set of problems." And the UK's woes could get worse if the economically illiterate Lizz Truss becomes Prime Minister (which she almost certainly will) with her desire to curb the independence of the Bank of England. [Bloomberg]

The Crypto World Can’t Wait for ‘the Merge’. "A long-awaited upgrade to Ethereum, the most popular crypto platform, may make the technology more environmentally sustainable. But it comes with risks." [New York Times]. See also Will This Be the First Country Bankrupted by Crypto? "It’s been a year since El Salvador adopted bitcoin as currency — things are not going well." [Rolling Stone]

Global inflation tracker: see how your country compares on rising prices. "Russia’s invasion of Ukraine has increased prices for everything from energy to wheat, adding to the inflationary pressures affecting major economies of the world including the US, UK, Germany and France." [FT]

Forecasting is Far From Enough. "Someone comes up with an impeccable forecast based on mathematics, and an influential economist appears on national television the next day and takes the opposite view. Whom are the mom-and-pop investors going to listen to? The person with 10 followers on social media, or the celebrated economist on television? The media cares about the value of narratives in creating advertising revenue. They do not care about the "truth"." [Price Action Lab]

Thematic Investing in Mutual Funds. A long, and I imagine for most people, a boring BORING research paper (you probably don't want to read about Fama-MacBeth regression approaches 💤). But a key takeaway: skilled fund managers with an information edge on certain themes will likely deliver superior fund performance due to higher TCI (thematic concentration index). The source of this advantage comes in part from the managers' educational background, particularly the field of study. It finds that fund managers’ field of undergraduate study is conducive to acquiring expertise in related investment themes and results in a concentrated portfolio tilting towards stocks that they have an information edge on, generating higher risk-adjusted returns. [SSRN]

💡 Etc.

Is Selling Shares in Yourself the Way of the Future? The two brothers, all but attached at the hip, have some fascinatingly bold ideas (as well as interesting stories of failures and successes). "When we measure the wealth of people, we tote up their cash, assets, and debts on a given day and take that as their worth—even if we know they’ll earn more going forward. When, on the other hand, investors value corporations, such as Costco, they take into account the company’s likely growth, and figure out a price for a share with that future in mind. (Costco is priced at forty times its current earnings.) Corporations are allowed to worm their wealth forward and backward in time by selling shares. In theory, people can do this through debt, but debt is psychologically onerous and rarely encourages personal risk-taking. The Libermans convinced themselves that, if you let people move their future wealth value around the way corporations do, people and businesses would be more evenly matched." [New Yorker]

🤯 See the Top Entries in the Art of Neuroscience Competition. "Van Gogh and Ramón y Cajal, like you’ve never seen them before, in the annual Art of Neuroscience Competition." I mean who doesn't want to check out artwork created with brain tissue? [Scientific American]

Book Review: Danger Zone - The Coming Conflict with China. "The authors don’t spend a lot of time convincing you that China’s leaders are bent on conflict — that task was already carried out by earlier authors, such as Rush Doshi’s The Long Game. It’s no longer really a question of whether China intends to displace the U.S. as the world’s leading power — it does — but rather a question of how the U.S. and its allies can resist this attempt. That’s what Brands and Beckley try to answer." [Noahpinion]

The Office’s Last Stand. "It’s either the end of the era of flexibility around where work takes place — or the beginning of outright rebellion." People should have the choice to work remotely, if the work allows for it. Those who want to go in, will go in. Or do managers not trust their employees? If they don't trust their employees to get done what needs to be done, then surely there's a bigger issue than deciding if remote work is viable or not? Perhaps companies should introduce productivity and performance measures related to in-office and remote work and base policy around the results? [New York Times]

What Drives Galaxies? The Milky Way’s Black Hole May Be the Key. "Supermassive black holes have come to the fore as engines of galactic evolution, but new observations of the Milky Way and its central hole don’t yet hang together." [Quanta Magazine]

The Best and Worst Countries for Expats. "Expats living in different countries around the world find some countries make it easy to settle in and make friends, but in other places, affordability and personal safety are big concerns." [The Street]

Happy Weekend.

Casper