Food For Thought
There is a certain beauty and corresponding reverence to the scientific method. The “problem” is that humans are using it: we are subject to biases and, most importantly, incentive systems. I highlight a Wired article about a young billionaire who has declared “a war on bad science”. His foundation’s work seeks to shed light on the instances of bad use of the scientific method, when data was perhaps ignored and corners perhaps cut. Analysts know what I am talking about: brushing away data points that seem “incoherent” with a theme, weighting independent factors disproportionately… We have all been there, no matter how hard we fight to be 100% rational and intellectually honest.
Booz & Co.’s Strategy + Business publication has a story with their top-3 management books of 2016 – part of a larger story on the best Business books overall. Long-time readers of this blog should be at least a little bit enticed by two of those books: one is by Robert “Persuasion” Cialdini and the other has a title to die for (“The Process Matters: Engaging and Equipping People for Success”).
From the comic strip in the beginning and the poem in the end, and right through the writing and the amazing Cognitive Bias Codex, the post I link to is a can’t-miss story on biases. Congrats to Better Humans’ Buster Benson for the writing and thanks to fellow PLDer Boris Tsimerinov for the heads-up on LinkedIn.
It was my birthday yesterday and I want to share a great information source with my readers: the Valor Intrínseco blog (translation: Intrinsic Value), which joins our blogroll. The blog posts are only in Portuguese, but its subject matter is Value Investing and the material they source is, 99% of the time, in English. I am more than glad to help this “competitor” out because great work always deserves praise – and because there is so much noise in the investment world, we need all the help we can get to hone in on the good stuff.
It is impossible not to be criticized when you are in the spotlight. Case in point: Warren Buffett. In the space of two weeks he has been criticized for supporting Hillary Clinton in the US presidential race, for a Corporate Governance “manifesto” co-signed by several CEOs (I’ll adress that in a separate post), and now for being increasingly “relentless” in his search for efficiency.
An update to last week’s post with two reading lists can only mean one thing… more books! These lists are wide-ranging in nature, coming from TED speakers and Farnam Street Blog members, a multidisciplinarian crowd if there ever was any. Enjoy!
An (unnecessary) debate has begun about the right of Board members to access data in excess of what management provides, if necessary. We can and should discuss the form of potential abuses and its punishments, as well as reasonable boundaries of access to management and data. But we should not seek to remove a basic right of the Board members, who are personally liable for their decisions.
Shamelessly I return to reading lists, one from McKinsey & Co. and the other from Harvard Business School. If you don’t know whether to thank me or hate me (“I haven’t finished the last books I bought and here comes an interesting list…”), I completely understand you.
Two noteworthy articles and one notable initiative in Brazilian CG practices nowadays. One regards an already-missed opportunity, the others still have potential (but should be treated with priority by investors interested in improving Brazilian capital markets).
Bill Gates wrote a very touching note on the 25th anniversary of his friendship with Warren Buffett. As he points out, he had no idea they would become such friends given their different backgrounds. The lesson here, if there is any, is to be truly humble – intellectually and personally.