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The disconnect between higher education and investing

Higher education if effectively delivered can be of great public benefit. However, most establishments unfortunately deliver a standard of education that is so disconnected to the worldly reality that the value of the education itself should be questioned.  My own experiences at a top 10 UK university were sketchy and inconsistent. In fact the real takeaways of higher education were primarily related to a better appreciation and application of cognitive variables – recognising, conceptualising, mental processing and better personal knowledge management.

The content of the course itself was overly generic, lacked sophistication and insight; I frequently felt untested and was accustomed to the almost ritual nature of semesters. It was only after interning at a research house servicing clients such as McKinsey, Bain and Co, Boston Consulting Group, 3M, PwC, KMPG and Siemens that I truly was able to join the dots and identify value-adding insights.

The problem with academia is despite the free hand in which one can scribe, the agenda and methodology are dictated, any deviance from the norm is considered to be weak. Expectations to cite existing authors, conduct literature reviews restricts the ability for free-thought and personal contribution. Everything has to be validated by an academic source; reinforced or commonly held ideas are expected to be the focal point of your discourse. This leaves very little of the white page to put forward new insight or contrarian  indicators. It leverages existing practices and as a direct consequence hinders new developments and improvements.

Lecturers are not looking at what you think or how you see the world and how it is shaped; they test your ability to memorise and recall existing information, your ability to understand the current debate and to cite the key opinions and contributors and then to add a partial nugget of your own wisdom that may be more obscure or untested. This methodology encourages groupthink, where participants display herd type behaviour and seek to reinforce the existing consensus opinion, or, at least not to diverge from it.

Investing is about understanding real stories, entrepreneurship, labour, human behaviour and other key drivers; understanding real issues such as the supply-demand dynamic and important financial and economic indicators; good and bad practices.  Higher education is disconnected in many ways from investing in that it seeks to propel academics as the key arbitrator of business practice; it reinforces the idea that everything needs to be validated by another individual or many individuals and that fringe views or minority held opinions are somewhat less respected. Academic articles are usually measured on the citation frequency by other academics. This encourages herd-like behaviour and consensus thinking as the methodology towards problem-solving.

Academics focus on theory, logic and efficiency as the key driver of behaviour. In markets often sentiment, emotion, hope, fear, momentum, greed and irrational exuberance are better indicators of human behaviour. Markets are mainly inefficient. This is where the main disconnect lies.