Think Like a Freak by Steven Levitt and Stephen Dubner. Courtesy Harper Collins
Think Like a Freak by Steven Levitt and Stephen Dubner. Courtesy Harper Collins

Business

Book review: Think Like a Freak

Self-help books are one of the best-selling genres in the world.

Mahmoud Kassem

05 August, 2014

In a world that is getting more complicated, stressful and anxious for answers, it is no surprise that self-help books are one of the best-selling genres in the world. In the United States alone, $549 million is spent on these kinds of books annually, according to the research firm Marketdata Enterprises.
It is understandable, then, that many intellectually respectable authors, such as the economist Steven Levitt and his partner in crime, the journalist Stephen Dubner, are tempted to tap this gold mine.
Best remembered for their fun work, Freakonomics, which advised its readers to the value of ignoring conventional wisdom and mining data dispassionately to arrive at unorthodox solutions to vexing issues (such as homicides in the US), the duo went on to produce the sequel Superfreakonomics and now Think Like a Freak. In this tome, the authors' "offer to retrain your brain" is reminiscent of the recently published The Art of Thinking Clearly and other more sophisticated self-help books.
However, like the many experts who they criticise in their own work for being blind to other points of view, Mr Levitt and Mr Dubner are convinced that the study of economics is the only way to understand the world and fix its problems. They are dismayed after a meeting with the British prime minister, David Cameron, that he was not impressed by their conclusion that the National Health Service is not economically viable.
In this they betray the emptiness of the conceit that their method is free of the kind of ideological posturing that they find distasteful. For there are other considerations, such as compassion and fairness, that cannot be done complete justice by the free market.
Nevertheless, Think Like a Freak is a well-written and entertaining book, full of interesting advice such as on how to approach eating competitions the right way, why shooting a penalty at the centre of a goal is the best chance of scoring (and not the corners as is statistically more common), as well as other axioms that are the product of turning received ideas on their head.
One piece of conventional wisdom that they might do well to heed to, and I am sure they would find difficult to deny, is "quit while you are ahead". No Think Like a Freak workbooks, please.
 
mkassem@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed

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