Book Bits: 8 New Releases For Investors
Antti Ilmanen
Summary via publisher (Wiley)
Investing Amid Low Expected Returns: Making the Most When Markets Offer the Least provides an evidence-based blueprint for successful investing when decades of market tailwinds are turning into headwinds. For a generation, falling yields and soaring asset prices have boosted realized returns. However, this past windfall leaves retirement savers and investors now facing the prospect of record-low future expected returns. Emphasizing this pressing challenge, the book highlights the role that timeless investment practices – discipline, humility, and patience – will play in enabling investment success. It then assesses current investor practices and the body of empirical evidence to illuminate the building blocks for improving long-run returns in today’s environment and beyond. It concludes by reviewing how to put them together through effective portfolio construction, risk management, and cost control practices.
Erez Yoeli and Moshe Hoffman
Summary via publisher (Basic Books)
We like to think of ourselves as rational. This idea is the foundation for classical economic analysis of human behavior, including the awesome achievements of game theory. But as behavioral economics shows, most behavior doesn’t seem rational at all—which, unfortunately, to cast doubt on game theory’s real-world credibility. In Hidden Games, Moshe Hoffman and Erez Yoeli find a surprising middle ground between the hyperrationality of classical economics and the hyper-irrationality of behavioral economics. They call it hidden games. Reviving game theory, Hoffman and Yoeli use it to explain our most puzzling behavior, from the mechanics of Stockholm syndrome and internalized misogyny to why we help strangers and have a sense of fairness.
Elizabeth Popp Berman
Summary via publisher (Princeton U. Press)
For decades, Democratic politicians have frustrated progressives by tinkering around the margins of policy while shying away from truly ambitious change. What happened to bold political vision on the left, and what shrunk the very horizons of possibility? In Thinking like an Economist, Elizabeth Popp Berman tells the story of how a distinctive way of thinking—an “economic style of reasoning”—became dominant in Washington between the 1960s and the 1980s and how it continues to dramatically narrow debates over public policy today.
Scott Nations
Review via Publishers Weekly
Investors can make bad decisions “because of the behavioral biases we’re all subject to,” advises Nations (A History of the United States in Five Crashes), president of the financial engineering firm NationsShares, in this useful guide to avoiding common financial mistakes. The key theme is that “the social aspect of investing… hinders success.” To tackle the fear and irrationality that often accompany investing, he warns against a wealth of biases: there’s the status quo bias, or “the irrational tendency to prefer choices that maintain the status quo even when other choices would leave us better off,” which readers can counter by ensuring their portfolio is diversified; hindsight bias, which entails “fooling ourselves into thinking that we [saw] it coming because it is all so obvious now,” though investors should remember they can never truly know what’s coming; and overconfidence, which “may be the most dangerous.”
Richard Holden and Rosalind Dixon
Summary via publisher (Oxford U. Press)
Liberalism–and its promise of market-led prosperity–was in crisis well before COVID-19. Recent decades have seen a rise in concentrated unemployment and long-term stagnation in real wages in many of the world’s leading economies. At the same time, the world has witnessed a dramatic rise of corporate power, concentration of wealth. and the failure of liberal societies to address some of the most pressing challenges of our time. To survive, liberalism will need a radical reboot-to find new ways of tackling the current challenges posed by corporate power, inequality, and climate change.
Gideon Rachman
Review via The Economist
What do Xi Jinping, Boris Johnson and Prince Muhammad bin Salman have in common? More than you might think, and more than is good for the rest of humanity, writes Gideon Rachman, a columnist for the Financial Times who previously worked for The Economist. He sees all three men as proof of the advent of “The Age of the Strongman”, as his wide-ranging and astute new book is titled. They present a threat not only to the well-being of their own countries, but also to a world order in which liberal, cosmopolitan ideas are increasingly embattled.
Marion Laboure and Nicolas Deffrennes
Summary via publisher (Harvard U. Press)
Over the past few decades, digital technology has transformed finance. Financial technology (fintech) has enabled more people with fewer resources, in more places around the world, to take advantage of banking, insurance, credit, investment, and other financial services. Marion Laboure and Nicolas Deffrennes argue that these changes are only the tip of the iceberg. A much broader revolution is under way that, if steered correctly, will lead to huge and beneficial social change.
Jonathan Haskel and Stian Westlake
Summary via publisher (Princeton U. Press)
The past two decades have witnessed sluggish economic growth, mounting inequality, dysfunctional competition, and a host of other ills that have left people wondering what has happened to the future they were promised. Restarting the Future reveals how these problems arise from a failure to develop the institutions demanded by an economy now reliant on intangible capital such as ideas, relationships, brands, and knowledge. In this groundbreaking and provocative book, Jonathan Haskel and Stian Westlake argue that the great economic disappointment of the century is the result of an incomplete transition from an economy based on physical capital, and show how the vital institutions that underpin our economy remain geared to an outmoded way of doing business.
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Disclosures: None.
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