Weekend Reads For Investors: Accounting Standards, China, And The Mind

by: CFA Institute Contributors

By Jason Voss, CFA

Since it has been awhile since my last Weekend Reads for Investors — holidays, don’t ya know? — I have accumulated many worthwhile reads. So let me dive straight into it.

Investing

The principle focus in my reading is always information that can help investors do their jobs better. Perennial among this type of content is, of course, new accounting standards. These are frequently difficult to keep track of, but the Financial Times writes up a summary of them. A particularly meaningful addition: better disclosure about leases and leasing — alias “How we amp up returns on capital via accounting.” (Financial Times)

Speaking of useful guides, China Daily created a list of “The Top 10 Policy Changes in China in 2015. I found this to be super helpful. Most important in the long run — and I am a long runner — is the ending of the one-child policy . . . more people coming to a decade near to you. It seems China finally sees the demographic writing on the wall. (China Daily)

While we are on our virtual tour of Asia, let’s stop by Japan, where business chiefs say that they are committed to aiding politicians in the effort to beat deflation. It is hard to imagine another place on the planet where business chiefs would agree to work with politicians to increase their own costs, but as we know, Japan’s business ethos is a reflection of its culture. (Japan Times)

Next to the accounting changes, probably the most important new thing coming the way of investing in the near term is Eaton Vance’s new revolutionary portfolio structure, known as NextShares. I think you will agree that this new product is a game changer. (Reuters)

Another big game changer is the re-emergence on the world stage of a highly educated, second-world economy: Iran. Setting the politics aside, Iran will certainly affect its regional economy. “Are You Ready to Buy Iranian Bonds?” (Wall Street Journal)

Living with a resurgent Iran may be difficult, but what about the challenge of dealing with less than zero interest rates for long periods of your career? This piece makes the case that such absurdities are likely with us for the long haul. (Wall Street Journal)

Just when you thought that artificially intelligent trading bots were going to suck all of the alpha from the markets, there comes news of a simple way to predict the market. Now do your part and turn that alpha into beta! (Wall Street Journal)

Environmental, Social, and Governance (NASDAQ:ESG)

Even if you are not an ESG advocate because of your values, there is still value to examining the risks confronting businesses and the securities they issue in a more holistic way. Namely, how does a company interact with its business, political, and environmental ecosystems? Such considerations are now the focus of a new ESG business school called Presidio. (Bloomberg)

While on the subject of ESG, did you know that the United States’ Christmas light fetish uses up more power than many developing countries? Count me among the guilty . . . or at least my wife and kid. (R&D)

ESG, especially in the United States, can really fire up the passions. Whether humanity is a major cause of climate change is an especially rich topic of debate. Perhaps that is what motivated Greenpeace to conduct a sting operation that caught scientists willing to dispute climate science for money. (R&D)

The Mind

If you read my stuff regularly then you know that the mind — and its exaltation — is my favorite subject. In particular, I am interested in increasing productivity, both yours and my own. Turns out this psychological phenomenon explains why you can spend all day at work without getting much done. (Business Insider)

Subsumed within my interest in the mind are behavioral quirks. The following story illustrates a good one: Here, a Chinese company wanted to ensure it was not counterfeiting products. Its investigator found no wrongdoing, but was afraid the client would be disappointed, so he faked a counterfeiting operation! Wow! (Japan Times)

Last on this subject is a story about popular quotes in circulation that were never actually said. Yet they are so in keeping with the spirit of the source that they seem like they should be true. Fascinating stuff! Put another way: “An Apt Misquotation Can Reveal the Greater Truth” (Financial Times)

Technology

Normally I have many stories to share with you on the technology front. But this month, I just have this one about Google and NASA and what they hope to accomplish with super-fast computers. (Bloomberg)

Fun Stuff

Last, take a look at these beautiful images of the first-ever forecasted supernova! In other words, scientists captured one of these amazing phenomena just as it happened, because they knew it was going to happen. Double wow! (R&D)

Disclaimer: Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.