Wolf Money(book recommendation)

 

Headwinds and Hazards, Economic Snapshots in An Age of Populism by Vikram Khanna,Associate Editor of Straits Times are years of articles which he had written in the paper condensed in a book for easy reading. It is not only helpful for people like myself who don’t read the national paper, It is also helpful to those who seek a macro world view on economy, trade and politics. His write up provide a broad range of social economic to political issues facing the world now. 

(Contents)

One of the topic which associate to how companies and government policy could be made better. In the piece, “nudging companies to do the right thing” he draw reference from Nobel prize winner in economics, Professor  Richard Thaler’s advice to economists to study real people and not idealised so-called “rational being” which mainstream economics revolves. Through promoting of positive reenforcement, human are likely to produce a better result than to force into a corner when faced with a difficult issue. One eg is through a campaign of increase saving for retirement by asking people to commit to higher saving when one had a pay rise. Nobody like to save for retirement on the pretext of cutting into their take home pay. Many government had adopt the same principle including ours. I can think of workfare as one of those good scheme to encourage people to put in extra hours of work with government chipping in through additional cash and cpf grant which help improved retirement adequacy. Another eg given by the writer is in the area of pricing strategy in the watch industry where most consumers are more receptive to watch retailer crawling back discount than an outright increase in price for in demand watches. Professor Thaler called it “endowment effect”.  Consumers are less likely to feel short changed with the price increase. The professor also mention how companies can better prepare themselves during a major corporate action. Companies should adopt pre mortem which anticipated problems rather than doing post mortem. Staffs of the company are asked hypnotically of a failure after a major corporate action. What went wrong? Write down what happened. In this way, pre-mortem force people to suspend their enthusiasm which can lead to anticipation of problems that hasn’t been considered prior to the corporate action. 

There are topics like trade wars, the rise of China and India which the writer share extensively. It is a good book to read on rainy weekend. Headwinds and Hazards, Economic Snapshots in An Age of Populism goes onto Lone Wolf Investor recommendation for its broad view on the future of economy and politics. Happy reading. 

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