It’s that time of year again: summer reading season.
While for many that means books for the beach, some emerging-market fund managers are yearning for titles that shed light on buying opportunities in Asia as well as the human psychology behind investing decisions.
Asha Mehta, who oversees emerging markets at Acadian Asset Management in Boston, said she’s eager to crack Evan Osnos’s "Age of Ambition: Chasing Fortune, Truth, and Faith in the New China" after the historic inclusion of China’s A-shares market in major equity indexes. Stocks there look "very compelling," and she’s hopeful the 2014 National Book Award winner, written by The New Yorker’s former Beijing correspondent, will give her better insight on whether China will be stable for years to come.
"While the opportunities for active managers are vast, I am keen to further understand China’s long-term opportunity," Mehta said.
Other books that excite her are "Easternization: Asia’s Rise and America’s Decline From Obama to Trump and Beyond," which looks at how the rising wealth of Asian nations is shifting the balance of power globally, and "Factfulness: Ten Reasons We’re Wrong About the World and Why Things Are Better Than You Think," which details how instincts distort human perspective.
At the top of list for Belita Ong, chief executive officer of Dalton Investments in Santa Monica, is “Saving the Sun: A Wall Street Gamble to Rescue Japan from Its Trillion-Dollar Meltdown” by Gillian Tett of the Financial Times. It tells the story of Long Term Credit Bank, a venerable Japanese banking firm that collapsed in 1998, got bailed out and was then sold in 2000 to an American firm, Ripplewood. In the process, it was renamed “Shinsei," or rebirth. Ong said that her firm has made a "significant investment" in Shinsei Bank and that Tett’s book offers nuanced insights into Japanese culture and attitudes towards business.
Lisa Chua, a money manager at Man GLG in New York, said she’s eyeing "The Hour Between Dog and Wolf: How Risk Taking Transforms Us, Body and Mind" by former Goldman Sachs trader John Coates. After majoring in economics and psychology at the University of Pennsylvania, Chua said it wasn’t until years later that she realized the latter would affect her investing.
"Having a framework for human psychology has played a surprisingly important role in my understanding of price action as it relates to trading patterns fed by the thoughts and impulses of investors," she said.
Coates’s book looks at how market reactions are influenced by the biochemistry of risk- takers during times of stress. It also underscores the value of diversity on a trading floor, because people of different genders and backgrounds respond differently to stress and can complement each other.
Not everyone wants to bring their work home with them. Tina Vandersteel, the head of GMO’s emerging-market country debt team in Boston, said she favors humorous novels as a way to rejuvenate while on the go.
"There’s nothing like laughing from the belly while holding a book in your hands to pull peoples’ eyes from their e-reader investment dross," she said. Noting the recent death of Tom Wolfe, with whom shares an alma mater in Washington & Lee University, Vandersteel said she might dust off her copy of "Radical Chic & Mau-Mauing the Flak Catchers."