The Wisdom of Finance- Mihir Desai in Conversation with Paul Smith, CFA

Speaker: Mihir Desai, Mizuho Financial Group Professor of Finance, Harvard Business School; Professor of Law, Harvard Law School

Paul Smith, CFA, President and CEO, CFA Institute

Written by: Vivek Rathi, CFA

Prof. Desai tried to explain how finance is related to Humanity. His book “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return” tries to connect two worlds which one thinks are not connected. He started by a quote from Wallace Stern “Money is kind of Poetry”  and followed it with a number of Pictures from history, each trying to communicate something important in contemporary world.

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Few key takeaways from his session:

  • Stories should be used to understand Finance
  • The world is random and not structured, there is randomness everywhere. Good part is, this randomness can be managed
  • Investors/managers generally face Principal-Agent problem
  • It is really hard to become principle
  • We do not punish people who fail
  • The gap between Finance and Humans is a real loss
  • Optimistic about India but expectations have to be rational
  • Indian companies should focus on Corporate Governance
  • Indian companies spend too much time on analyzing Policy makers/actions, instead corporates should focus on Innovation
  • VR

 

About IAIP

India Association of Investment Professionals (IAIP), which is established April 2005 and located in Mumbai, is an association of local investment professionals. As one of the 136 CFA Institute member societies, IAIP connects members to a global network of investment professionals. Consisting of portfolio managers, security analysts, investment advisors, and other financial professionals, IAIP promotes ethical and professional standards within the investment industry, facilitates the exchange of information and opinions among people within the local investment community and beyond, and works to further the public’s understanding of the CFA designation and investment industry.
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