Better qualitative investing with Anthropology

 

Before I talk about investing, let's talk about racism in Singapore. 

My personal opinion is that we have been too hasty trying to cancel racist polytechnic lecturer Tan Boon Lee. There are thousands of Tan Boon Lee's in Singapore, some who can conceal their tracks better than others. Authorities should go with a lighter hand but work with cultural anthropologists to understand the institutions that enable this to happen in the first place. I was tactically ignored on social media when I inquired about Tan's secondary school even though I know that I may have struck a nerve as I did some googling of the schools that celebrity racists like Sharon Au and Dennis Chew have come from. To me, it was not accidental that Tan Boon Lee eventually made a living teaching object-oriented programming in a Polytechnic. A lot of Chinese-speaking Singaporeans turned to study engineering in the 80s to earn a middle-class lifestyle because it was the only professional path that can tolerate poor English proficiency.  Tan Boon Lee's labelling of a minority dating a Chinese girl as racists seems to come up from some subconscious "object-oriented code" that inherited itself from some racist firmware that was installed in him but subtly overloaded with his own ideas when he was much younger. 

But I will not digress further, Anthropology is the qualitative study of human beings. 

A Singaporean tribe that does not mix with minorities even after 50 years of independence should be an interesting sub-culture to understand. Anthropologists can interview them, live among them to understand their media influences, favourite institutions and personal narratives. Then using data analytics developed by Cambridge Analytica, we can figure out their OCEAN personality profiles and develop a means to target racists even before a single external expression of racism can manifest. I like to christen this a Majority Report. There are plenty of community centres where we can set up "re-education camps" where we can ply them with Thosai and Mee Rebus to blunt the racism.

I think my solution can deal with racism much better than coming up with a rap video to threaten fellow Singaporeans. 

Anthro-Vision by Gillian Tett felt more like a reaction towards the rejection of humanities ( thanks to big data and data science ) than promoting what anthropology can do for businesses, but it is a wonderful addition to an investor's arsenal. As someone who employs a lot of quantitative models, I see them fail fairly often but wonder what needs to be captured if we are interested in qualitative considerations. Anthropology shows us why this is a very broad problem that cannot be cracked easily.

I have only one example to share on this blog.

Office REIT investors are worried about work from home and they are sure whether Office REITs have come down in price to justify an investment. Accounting numbers don't really help because we don't have an idea whether folks will be forced back to the office.

Amazingly anthropology provides some hints. Offices promote two things to workers that no amount of accounting knowledge would provide.

The first is sense-making. What does it mean to be a worker for a company? You can only derive meaning from your work by observing your managers, speaking some lingo, and dressing up like them. Doing so puts you in a physical or social environment called a habitus. As such, landlords are not simply giving you some square foot of space for rent. Enabled by MNC tenants, landlords provide habitus for a fee. If everyone works from home, you have to confront the fact that it is harder to transmit corporate culture to workers. 

The second is informal information exchange. If you manage a tribe of programmers who do better when left alone, then WFH may become a better default. But if you have a proprietary trading team, a lot of informal information exchanges occur that can positively improve trading returns. So in such a case, programming teams can decamp to their homes but traders should rush back to the office as soon as possible. 

For these two points raised, I can begin to be more bullish on office REITs as investors are more likely to overestimate the impact of WFH on office REITs. 

The higher dividends may not last.   

One thing I really like about work is that the author was very eager to shine the anthropological lens on themselves. Folks who study anthropology are the hippies of the academic world and would not want to work with corporations or even the government. I observe similar levels of antiestablishment in Singapore. 

So good luck getting anthropologists to work with financial analysts to cherry-pick Office REITs.

I can imagine these woke Gen Z anthropologists throwing up when I propose building a racist detection algorithm that can take a FB profile and calculate the probability of their racism. So far, they'd rather eat an avocado sandwich and watch a Preetipls video than actually solving the racism problem with Big Data.