Ten interesting things we read this week

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At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are: Mental illness (Is there really a global epidemic?), Investment (Poker-playing hedge fund managers have an edge), Lifestyle (Making a rich man angry is easy), Sports (Mo Salah helped Liverpool residents more tolerant of Islam), Digital Payment (Indians are switching to digital payments), Environment (Going vegan will help you but not the whole country), Athletics (She’s 45, an amputee, and she runs ultramarathons!)

Here are the ten most interesting pieces that we read this week, ended June 14, 2019.

1) Mental illness: Is there really a global epidemic? [Source: Guardian]
Our mind is the best part of our body as that’s where all the magic happens. But, if we don’t feed our brains with the right thoughts, it will surely have a negative impact on whole body. And mental illness is not sadness, insanity or rage, but it’s much more complex and universal. A study by the Institute for Health Metrics Evaluation (IHME) showed that in 2017, just under 300 million people worldwide suffered from anxiety, about 160 million from major depressive disorder, another 100 million from the milder form of depression known as dysthymia.

But what causes the mental illness? Psychiatrists speak of a combination of risk factors that might add up to trouble. Start with the genes. “What you inherit is a certain vulnerability or predisposition, and if things happen on top of that then people would then be more likely to suffer from a mental problem,” says Ricardo Araya, director of the Centre for Global Mental Health at King’s College. For example, last year scientists pinpointed 44 gene variants that raise the risk of depression. Then there are life experiences that compound the risk factor, such as abuse, trauma, stress, domestic violence, adverse childhood experience, bullying, conflict, social isolation or substance abuse.

Some of the most common illnesses are clinical depression, anxiety, bipolar disorder, schizophrenia, substance abuse, post-traumatic stress disorder, eating disorders (yes, anorexia), and dementia. In the span of 30 years, the subject has moved from being invisible to being taboo to being openly discussed. But mental illnesses are still not universally accepted. People with mental illnesses still complain of discrimination; 300,000 people with long-term mental health problems lose their jobs every year – and that’s just in the UK.   

2) Poker-playing hedge fund managers have an edge [Source: Bloomberg]
What’s common between hedge fund managers and poker players? Both activities demand aggressiveness, accurate calculations under pressure, keen behavioral insight and shrewd risk-taking. So, do poker-playing hedge fund managers fare better than the other managers? Academics Yan Lu, Sandra Mortal and Sugata Ray try to answer the question in a new paper titled “Hedge Fund Hold’em.” This is part of an emerging academic interest in correlating recreational activity to business and investing success.

The headline result of the latest paper is that hedge fund managers who have won poker tournaments have more alpha, representing an additional 4.2 percentage points in returns per year versus 2.8 percentage points for other managers, through a combination of higher average returns and lower average risk. If personal characteristics of top decision makers such as their personalities, attitudes toward risk or game skills have measurable effects, however small, on their performance, then this is an important field of study.

Poker skill only seems to help in fundamental strategies in which the manager is making partly subjective judgments about unique situations, as George Soros does in real life or Bobby Axelrod does on the fictional Showtime television series “Billions.” The important takeaway is we need more systematic research on behavioral characteristics and skills of top decision makers. Maybe then we can train and select a better class of leaders, not just in fields like poker and trading where performance can be measured objectively, but in business and politics as well.   

3) How to make a rich man really mad [Source: Financial Times]
In this intriguing piece, journalist Holly Peterson reveals some weird and bizarre characteristics of some rich people that would surprise a normal guy. She says that rich guys can lose a few millions on a trade in a single afternoon and keep their cool, but if a chief executive can’t find his car after a black-tie gala, his fury boils over with the force of a pent-up volcano.

Just like the above example, she has many more to talk about. What they want is ‘control’. “In their universe, these men are masters, and when minor things happen, they lose the frustration tolerance their parents taught them as babies waiting for a warm bottle,” says Dr. Harold Koplewicz, president of the Child Mind Institute. “They understand the markets, they engineered the hedge and, even if they lose, the money is still somehow in their control.”

So what gets them really mad? She says, getting their net worth wrong will surely make them angrier than anything else. At a tedious gala last year, her dinner partner told her that he had his PR department keep him off the Forbes 400 wealthiest list for the sake of “discretion”. Months later, this same man’s wife told the author of this piece that he actually went berserk when he rushed to the magazine stands to find he was off the list.

4) New conflict data reveals more conflicts but fewer killed [Source: prio.org]
New data from peace researchers at Uppsala University (UCDP) and the Peace Research Institute Oslo (PRIO) revealed that the number of people killed in wars is the lowest in seven years. The researchers are concerned, however, about the increase in the number of conflicts where external states are involved. This is because such conflicts tend to last longer and be bloodier. But, battle-related deaths have fallen.

“The main cause of this reduction is that the conflicts in Syria and Iraq have been less violent,” explains Siri Aas Rustad, who is leading PRIO’s major Conflict Trends project. “In these two conflicts, there were 18,000 fewer fatalities in 2018 than in the previous year. In the case of Syria, this was in fact the lowest level of violence since the Arab Spring in 2011.” Accordingly, the general trend worldwide is positive, but numbers of fatalities are rising in several places nevertheless.

New, updated data on peace agreements from the UCDP, show that recent years have been bad years for the signing of peace agreements, even though there have been many ongoing conflicts. In 2018, five peace agreements were signed, while 1991 saw the signing of 23 peace agreements. The internationalization of many conflicts is a significant factor for explaining the low number of peace agreements.

5) Has Salah helped make Liverpool residents more tolerant of Islam? [Source: Indian Express]
On June 1st, Mohamed Salah, an Egyptian striker, helped Liverpool win the Champions League, Europe’s most prestigious competition. Fans were also heard saying, “If he scores another few then I’ll be Muslim too.” The incredible popularity of Salah has led to researchers from Stanford University’s Immigration Policy Lab to raise the question: Can exposure to successful celebrities from an often stigmatised group reduce prejudice towards that group? They suggest that it can.

They draw this conclusion after observing that Salah’s presence has inspired Liverpool fans to become less Islamophobic in general. The researchers describe three ways in which they have reached their conclusion.

i) Using a counterfactual hate crime rate, they found that Merseyside county (where Liverpool is housed) had a 18.9% lower hate crime rate after Salah was signed, relative to the expected rate had he not been signed.

ii) Researchers analysed 15 million tweets by followers of prominent clubs in the English Premier League. Generating a counterfactual anti-Muslim tweet rate by fans of other teams, they found that the proportion of anti-Muslim tweets by Liverpool fans after Salah joined was 53.2% lower than the expected rate had he not joined Liverpool. 3) They conducted a survey experiment among 8,060 Liverpool fans. The results suggest that exposure to Salah may reduce prejudice by familiarising fans with Islam.

6) #KuToo: Japanese women submit anti-high heels petition [Source: Guardian]
Imagine you are forced to wear heels to office. How would you feel about it? A group of Japanese women have submitted a petition to the government to protest against what they say is a de facto requirement for female staff to wear high heels at work. KuToo campaign, a play on words from the Japanese kutsu, meaning shoes, and kutsuu, meaning pain, was launched by the actor and freelance writer Yumi Ishikawa and quickly won support online.

Ishikawa told reporters after meeting labour ministry officials: “Today we submitted a petition calling for the introduction of laws banning employers from forcing women to wear heels as sexual discrimination or harassment.” The case underlines what some experts say is a deep-seated problem with misogyny in Japan. Campaigners said the shoes were akin to modern foot-binding. Others also urged that dress codes such as the near-ubiquitous business suits for men be loosened in the Japanese workplace.

There have been similar incidences over the world where women had to face heat for not wearing heels to work. In 2017, Canada’s British Columbia province banned companies from forcing female employees to wear high heels, saying the practice was dangerous and discriminatory. Whether Japan will follow suit or not, only time will tell.

7) Overcrowding opportunities [Source: The Reformed Broker]
Climbing Mount Everest was once regarded as a big task. But now, with the rising use and advancement of technology it’s easy. The rewards are there for being early and breaking through before the rest of the crowd. The rewards for coming later, when the risk is less severe and the tools are more widespread and easily adopted, are significantly diminished. We see this phenomenon play out in the investment markets all the time, just as it does in the somewhat related world of private business investment.

Once something is discovered, valuations are pushed up, secrets are shared, shoddiness and sloppiness appear everywhere as the worst, most amateurish entrants are attracted, gold rush-like, onto the field. Scam artists aren’t far behind, followed by new regulations to rein everyone in once enough money has been lost, stolen or set on fire. And before you know it, what was once a lush and bountiful opportunity for the few, becomes an endless chain of mouth-breathing nobodies pushing each other off the side of a mountain for their own fleeting moment of opportunity in the sun. And then everyone loses.

There are many podcasts available today. There are many music festivals. There are many YouTubers, who want to make it big. But, in order to make it big, you need to be extraordinary or else you’ll be lost in the crowd. Even if you have an extraordinary idea, soon others will start copying you. This is what crowds do to opportunities. No matter how good you are, if what you’re doing is very profitable, others will copy you and will be “good enough” to impinge on your game.

8) Indians are switching to digital payments in droves [Source: Economist]
Indians always prefer physical assets and cash over digital and liquid assets. But, this seems to be changing after demonetization and unified payments interface (UPI) coming into play. September 2010 saw the arrival of Aadhaar, a system of biometric ids that could be used to open a bank account. After becoming prime minister in 2014, Narendra Modi chivvied bankers to open accounts for everyone. Around 360m basic “Jan Dhan” (people’s wealth) accounts were opened, adding to the 243m accounts already in existence.

Now you can do digital payments even in a grocery store that’s just under your building. Demonetization gave digital payments a galvanic boost. Paytm, India’s largest digital-wallet firm, took out ads thanking Mr. Modi for the move. Paytm now claims 371m users. PhonePe, a subsidiary of Walmart-owned Flipkart, claims more than 150m, and bhim, run by a government-led bank co-operative, 46m. The value of digital transactions has risen more than 50-fold in the past two years.

Even the regulators are happy with the system, says Saurabh Tripathi of BCG, a consultancy, since it protects deposits, increases financial inclusion and cuts tax evasion from unreported cash deals. It also suits banks, since they get fine-grained information on transactions that can be used for credit analysis and product customisation. There are many digital payment options today. Many tech giants have their own systems in place or are planning to set up one in India soon. Gone are the days of using cash everywhere.

9) Why a hipster, vegan, green tech economy is not sustainable [Source: Aljazeera.com] Nowadays, going vegan and green is kind of cool. In this piece, the author debates how going green might reduce carbon footprint, but will add on to the miseries of the poor. The author feels that these are quick fixes to bigger problems. He says that such "quick fixes" derive from the economic and political structures of capital expansion. Growth-based economies are at the heart of environmental disasters we face today; making our goods, economic activity or infrastructure "greener" and more efficient without a major overhaul of the global economic system is not a long-term solution.

According to Oxford researcher Marco Springmann, if the world were to turn vegan by 2050, it would save $1.5 trillion in health-care costs and climate change damages, as it would cut greenhouse emissions by two thirds. But in a capitalist economy, such a surplus would never simply be left idle. It would be re-invested into further growth, which would still consume more resources, exploit workers and produce waste and damage the environment in one way or the other.

Growth-oriented capitalism will "sell" you veganism as a noble practice that reflects your values and benefits your health, but it would not tell you the full story about the ongoing and long-term social and ecological consequences of industrial veganism. Lastly, the author says that such lifestyles may appear marginally efficient, but they are, by and large, a convenient by-product of shifting social and ecological costs to those less privileged both locally and globally.

10) First female amputee to run grueling desert ultra explains why she’ll never stop [Source: Runner’s World]
Running a marathon or an ultra is what most of us dream of. But, we all have some or the other excuse to not run. And here’s Amy Palmiero-Winters, who runs from her home on Long Island, New York, to an hour-long CrossFit class, then runs back afterwards. She also heads to the track to do 400- and 800-meter intervals once a week, and logs 19 to 20 miles on Saturday or Sunday. She also participates in ultramarathons, and she does this all with a prosthetic on her left leg, which was amputated after a motorcycle accident in her 20s.

Recently, she finished Marathon des Sables, a six-day, 156-mile trek through Southern Morocco. “I’m only human. In the middle of a race, there are so many times I want to stop,” she told. “But you don’t have the opportunity to stop. When it gets dark, you have to keep moving forward. The worst thing you can do is give something less than your best, because you have to live with that forever.” Palmiero-Winters’s performance at Marathon Des Sables was especially impressive, because she was the first below-knee female amputee to finish in the race’s history.

By the time Palmiero-Winters officially finished Marathon des Sables in 52 hours, 23 minutes, and 21 seconds, she could barely walk, due to the prosthetic-inflicted wound on the back of her leg. As soon as she landed in New York, she had to have it mended by a plastic surgeon. “Ultimately, the race wasn’t what I wanted it to be,” she said. “But I’ve learned that the outcome is more than just your time and place. I did my best. I’ll keep doing my best.”